Honeycomb Investment Share Discussion Threads

[spangle93] 18/8/2020 10:35

Thanks CC2014. I hold (in hope) PSSL so I was trying to understand, based on the HONY merger proposition, why the latter should have such a discount and yield relative to PSSL. As Rambutan says, the proposed merger makes a lot more sense for HONY investors than PSSL holders on the face of it.

[spangle93] 18/8/2020 09:39

July presentation, from website hTTps://www.honeycombplc.com/media/10347/hony-analyst-presentation-july-2020.pdf It clearly didn't send the analysts into a buying frenzy What is the primary reason this stock remains unloved - it can't just be CoVid because it was falling from Aug 2019 before that.

[rambutan2] 06/8/2020 21:09

Makes sense, for HONY and co, not so sure re PSSL holders: 6 August 2020 For immediate release Possible Combination of Honeycomb Investment Trust plc ("HIT") and Pollen Street Secured Lending plc ("PSSL") HIT today announces that it has made a proposal to PSSL regarding a possible merger of HIT and PSSL (together the "Enlarged Group"). As described further below, under the terms of the merger PSSL shareholders would receive new ordinary shares in HIT on a NAV for NAV basis (the "Possible Merger"). The board of HIT believes that there is an opportunity for shareholder value creation from the combination of HIT and PSSL to create the leading listed investment trust dedicated to providing finance to the specialty finance market. The HIT board considers that the combination of PSSL and HIT would be in the best long term interests of both companies and their respective shareholders. HIT has consulted with certain of its largest shareholders who have indicated they are, in principle, supportive of the Possible Merger. These investors also hold shares representing, in aggregate, 30.7 per cent of the PSSL total number of outstanding shares(1) . Key terms of the Possible Merger The possible offer for the entire issued and to be issued share capital of PSSL has been made on the basis of an unaudited "NAV for NAV" combination. Based on HIT's and PSSL's unaudited NAV per share (post recent share buybacks) of 1,016.4p and 948.8p at 30 June 2020 respectively, PSSL shareholders would be entitled to receive: 0.9335 new HIT ordinary shares in exchange for each PSSL ordinary share. Further information on the assumptions underlying our proposal is outlined in the Appendix to this announcement. Under the terms of the Possible Merger, PSSL shareholders would also be entitled to receive the dividends, if any, declared by PSSL in respect of the three month period to 30 June 2020 and the three month period to 30 September 2020, provided that the aggregate of the dividends for each such period does not exceed 12.0 pence per PSSL ordinary share and is covered by income for the period. The terms of the Possible Merger would not be adjusted for the dividends, if any, declared by HIT in respect of both the three month periods to 30 June 2020 and 30 September 2020 (and PSSL shareholders would not be entitled to receive such dividends), provided that the aggregate of the dividends for each such period does not exceed 20.0 pence per HIT ordinary share. The Possible Merger would result in PSSL shareholders owning approximately 65.3 per cent of the Enlarged Group on a fully diluted basis. In addition, subject to consultation with shareholders, HIT is considering alternative structures including either a partial cash alternative, subject to certain limits, or a share buyback programme post completion of a transaction. (1) Supportive shareholders comprise: Quilter Investors Limited (14,603,993 shares), Standard Life Aberdeen plc (4,740,501 shares), Thesis Asset Management Limited (1,669,314 shares) and AXA Investment Managers (1,640,000 shares) https://uk.advfn.com/stock-market/london/honeycomb-investment-HONY/share-news/Honeycomb-Investment-Trust-PLC-Possible-offer-for/83019659

[praipus] 25/6/2020 12:26

ActOfWill hmm think you are right, my error. Looking at it now. Could I have read it too fast seeing the 0 in the first column and 5% in resulting situation? Apologies. Curious, first trade back in January shows the same resulting number of shares. The only thing not showing on the second RNS is the CFD for 3,000,000. hTtps://www.honeycombplc.com/media/10022/tr1-hony-ln-equity_01272020-issuer.pdf hTtps://www.honeycombplc.com/media/10281/tr1-hony-ln-equity_06-03-2020-issuer.pdf

[actofwill] 24/6/2020 11:05

Praipus - I see that as Weiss going below 5%?

[billytkid2] 19/6/2020 10:08

The monthly update factsheet seems to be well overdue on their website. Last one available is for April.

[praipus] 18/6/2020 20:50

Weiss Asset Management taking 5% https://uk.advfn.com/p.php?pid=nmona&;article=82599609 I try to track Weiss Asset Management and other value investors and their holdings on the WAM thread https://uk.advfn.com/cmn/fbb/thread.php3?id=24182742

[rooky4] 25/2/2020 10:49

Meanwhile, over at PSSL: Good news - potential offer, and share price has jumped Bad news, just read the following RNS extract, and wonder if the same issues are here at HONY, (might partly explain the 850p transactions). ============== "In the face of a possible offeror's interest in exploring a recommended offer for the Company, the Manager has not, in the Board's unanimous view, given the assistance which is reasonably to be expected in such circumstances. The Board believes that, while portfolio performance has been satisfactory, it is not acceptable to withhold Company information from the Board, publish very material information about the Company without Board approval and fail to confirm compliance with clear and important instructions from the Company, its client. Accordingly, the Board considers that it is appropriate to give the Manager 12 months' notice of termination (whilst reserving the Company's rights) and to explore alternative arrangements for the Company.""

[cc2014] 30/1/2020 15:36

My biggest concern with this Trust is how Pollen divide the business flow between HONY, PSSL and their in-house bank Shawbrook. HONY was set up before Pollen bought SHAW and things would have been different then. Mark Barnett says "The funds are mature funds and have for many years been in net outflow." Mark Barnett seeks to reassure investors

[essentialinvestor] 30/1/2020 15:02

Rudimentary take FWIW, this trust is the type of exposure for an early cycle play. Late cycle, would be far less sure. But who knows. Luck to holders.

[cc2014] 30/1/2020 15:00

RNS out. Invesco selling down 20% in one go. Not good for their shareholders. I can't believe Mark Barnett hasn't been moved completely sideways by now.

[scallywagkid] 29/1/2020 17:58

Why would you hope the share price drifts lower?The Amigo bond is only 1.84% of NAV?Management buying, albeit cheaply, plus M&G addition is at least reassuring? Certainly a pre-emptive offer would have been good for existing investors and the seller but it takes too long to organise when seller clearly under regulatory and liquidity pressure.Honey share price has been under the Woodford cloud for sometime and will remain so until stake placed out. The business however has continued at a similar pace. Recent trading update supports that. As an investor I'll look past 'market' issues while ever business unaffected. Agree, would be helpful if retail market could buy again.

[cc2014] 29/1/2020 16:17

ah well. Just have to hope the share price drifts down. Discount to NAV looked justified to me given what is in the portfolio. One of the top ten holdings in Amigo bonds and we know what happenned to Amigo share price yesterday. L2 looks ridiculous. One MM at 935p then all other MM's sitting between 790p and 850p Oh, guess what the MM sitting at 935p is Liberium who are handling the buyback Sorry to all holders

[fangpima] 29/1/2020 09:33

Under what rule are managers allowed to buy at this discount. I understand a sale could crash the price, but it’s well under NAV with covered dividend. Why not make an offering and see what interest there was with HONY underwriting any not taken up?

[rambutan2] 29/1/2020 03:04

So HONY has bought in 2.2m, the managers couldn't resist dipping their hands in the pot at 850p for a few, and with the quoted price showing no slippage, I suppose some other insts have taken the balance at 850p. All right for some... https://uk.advfn.com/p.php?pid=trades&dt_select=1580198400&trade_set=1&symbol=LSE%3AHONY

[yieldsearch] 28/1/2020 22:25

managers were able to buy cheap at 850p. not great

[chinahere] 28/1/2020 13:00

Yes the original holders are the real losers. I wonder if the purchases will propel the managers into 10% performance fee territory....?

[yieldsearch] 28/1/2020 12:00

My thoughts: "substantial investor demand": completely wrong statement from the company. "Why not give an NAV based buyback?". Why on earth giving a NAV based buyback when the company can buy back cheaper? I guess there is a forced seller with 2.2m shares bought by hony and left with 6.04m post such sale. based on historically ownership, it is likely to be woodford (please correct me). This seller couldnt sell the block to another buyer, so i guess they approached the company, and settle for a price of 850. Make sense for the company to buy shares at a discount to Nav, and if those are cancelled (tbd), it will be accretive to existing shareholders. Hony seems to have the right to buy out the remaining 6.04m which would be further accretive to NAV if cancelled. in term of dvd, it is a wash. so while this is showing that there is 0 liquidity for block trades in this company, it is overall positive for existing HONY shareholders (no dvd to pay on those, potentially accretive to NAV). Does this mean that Hony should trade at 850p? not sure, this is the price agreed between the company and a forced seller. Does it change the nature of the underlying credit? no, and agree there is limited visibility The biggest losers are the shareholders of the forced seller (15%discount to the NAV)

[essentialinvestor] 28/1/2020 10:49

A taste of honey, eh. Will the taste be so sweet in a couple of years time?.

[chinahere] 28/1/2020 10:29

Yes,the PI loses once more....

[fangpima] 28/1/2020 09:49

Are you serious? Buying shares at 850 when the market is 950. I understand it’s illiquid, but monthly factsheet suggests NAV neutral or rising and the dividend is likely to be covered. Why not give an NAV based buyback? And was a secondary offering considered?

[purplepelmets] 27/1/2020 22:47

Why do they not show the portfolio on their website? I am assuming they just hold a basket of stocks like Amigo, Friends Provident, Non-standard finance, etc? Would account for the 10% divi but seems a bit risky

[chinahere] 27/1/2020 19:54

Is it Neil Woodford's old funds I wonder?

[rambutan2] 27/1/2020 17:46

!!! Hmmm, I wonder who the said shareholders are?! It's very generous of them to sell their shares on the cheap due to "substantial investor demand"... Proposed Share Trade and Share Buy-Back Honeycomb announces that it has been informed that in response to substantial investor demand, certain major shareholders of the Company have indicated an intention to sell a significant percentage of the Company's issued ordinary shares of 1 penny each ("Ordinary Shares") at a price of 850 pence per Ordinary Share. The Company also announces that a major shareholder has irrevocably undertaken to the Company and Pollen Street Capital Limited (the "Investment Manager"), the Company's investment manager, that, for a period of four weeks following this announcement, it will not sell any of its Ordinary Shares in the Company except at a price no lower than 850p per Ordinary Share when instructed to do so by the Company or the Investment Manager. In addition, the Company announces that the board has authorised an on-market buyback by the Company of up to 2.2 million Ordinary Shares pursuant to the authority granted at Honeycomb's annual general meeting on 6 June 2019 (the "Buyback"). Liberum Capital Limited ("Liberum") has been appointed to effect the Buyback on the Company's behalf. The Company has 39,449,919 Ordinary Shares in issue and admitted to trading on the Specialist Fund Segment of the London Stock Exchange with no Ordinary Shares held in treasury. Ordinary Shares purchased by the Company pursuant to the Buyback will be held in treasury. Shareholders should be aware that a purchase of Ordinary Shares by the Company on any trading day may represent a significant proportion of the daily trading volume in the Ordinary Shares and could exceed 25 per cent. of the average daily trading volume of the preceding 20 business days.