K3 Capital Share Discussion Threads

[texas_caddy] 15/12/2022 22:30

Would normal dividends be paid up to the date you receive the 350p?

[aishah] 15/12/2022 22:21

Happy to accept 350p. Price has been in the doldrums for a very long time here. Doubt I'll hold for the eventual cash. Will sell in the market for a bit less and move on.

[johndoe23] 15/12/2022 20:25

Well, when the share price was languishing around the 220p mark, I would have bitten your hand off for 350p. 13 times EBITDA is very stingy though! 400p would have been a nice price.

[davidosh] 15/12/2022 20:19

Well management cannot vote in the scheme of arrangement and I think they need 75% of those eligible to vote so there is a possibility that some of the holders that prefer to play the long game could prevent it and seek a higher price or no deal...

Management may not be happy at that scenario though

[my retirement fund] 15/12/2022 19:40

Unless the auditors at Bidco found something unexplained before it goes unconditional!

[doobz] 15/12/2022 19:10

Yep game over it seems now

[2vdm] 15/12/2022 17:45

RNS - Cash offer at 350p it is, subject, amongst other technical details) to vote by independent shareholders.

Commenting on the Acquisition, Ian Mattioli, Non-Executive Chairman of K3, said:

"Since IPO in 2017, management has continued to execute its strategy of building a multi-disciplinary and complementary group, providing specialist advisory services to SMEs across three core divisions, business sales, tax and restructuring. K3 is now a diversified group with a resilient, high margin and cash generative business model and a data-driven marketing platform at its core, driving strong levels of organic growth.

Sun is an experienced investor with a proven track record in supporting strong management teams in achieving their growth ambitions. K3 will be able to benefit from their operational expertise whilst having a supportive partner with the capital required to fund K3's M&A strategy.

Whilst being confident on the outlook for K3, we are mindful of the weakening macroeconomic environment in the UK and the pressures that this is likely to put on UK SMEs over the medium term and, therefore, it is the Independent Directors view that this offer represents an opportunity for shareholders to realise their entire investment, in cash, at an attractive valuation ."

[johndoe23] 13/12/2022 07:12

Compare FRP half year to K3C. No comparison!

[adipsia1] 12/12/2022 21:36

I think that there is another reason why FRP are rated more highly than K3C and I've only just come across it after reading FRP's listing documents on their IPO. It is to do with shareholding.

In the case of K3C - based upon Sharepad data - the K3C BOARD own approx. 25% of the share capital and the top 3 institutional investors only approx. 23%.

In the case of FRP - based upon Sharepad data combined with a quick look through their listing document from a couple of years back - the joint major shareholder of the business alongside an institutional investor - is the company's Employee Benefit Trust, which appears to consist of nil-cost share options GIVEN to staff at the time of flotation, amounting to 7.5%. The board own approx. 6%... a significant stake, but clearly their skew is towards placing trust and rewarding their staff before themselves.

I could be totally wrong and stand to be corrected, but from an institutional perspective I think I'd be far more inclined to trust a business that has endeavoured to keep all of its employees committed and onside (FRP), rather than one whose majority shareholding is totally in the control of its board. That in itself could warrant the forward PE discrepancy and explain recent K3C actions.

[adipsia1] 12/12/2022 20:51

You'd think that given a very positive trading statement, great analyst reporting combined with strong buy recommendations and a chart that would indicate that a relatively short-term target of 400-410 will naturally be hit would be enough for the board to continue building. I really cannot understand why the board needs to sell right now other than for personal reasons... and as for the statement about getting news out based upon speculation, that's total nonsense.

The way I see it is that the best case scenario is now 350, as the board have already bombed any further upside by stating that rival bidders backed away at this level which is already at a massive PE discount to FRP. Who else is going to bid the price up under these circumstances ?

I've only recently become a convert to the potential of this stock, having spent 20+ years working in the insolvency sector. I haven't owned it since day 1 and watched the roller-coaster ride play out. I hate drawdowns, so I haven't bought into the illusory argument around profits over the average price I bought into the stock which makes no sense to me.

For me all of the ducks need to be lined up and quacking at the same time: the fundamentals, the technicals, common-sense regarding the economy and statements from the board and analysts. To me there's incongruity between the way this duck is waddling and the way the board is quacking... which is a real pain for me because I had this one labelled as a stock that I could tuck away for a couple of years with no concerns at all.

I've shed 85% of my holdings and am holding on to the remainder just in case there really is a Santa Claus.

[jpuff] 12/12/2022 11:13

I will actually be surprised if there isn't a counter bid so am holding firmly tight here.

[rivaldo] 12/12/2022 11:10

Agreed. A good H1 and confidence in meeting expectations for the year even despite the continued underperformance in administration work, which should improve relatively quickly given current economic conditions. Encouragingly K3C state today there's "encouraging activity levels and pipelines across its brands for the second half of the year", hopefully implying that that recovery in administrations is beginning.

[johndoe23] 12/12/2022 07:37

Yes, pretty good update. Worth 400p, at least!

[shanklin] 12/12/2022 07:19

Must admit that, given the lowball offer, I am impressed K3C have issued a pretty upbeat TS

[tole] 11/12/2022 08:56

https://masterinvestor.co.uk/equities/small-cap-catch-up-pawnbroking-sales-and-inside-deals/K3 Capital Group (LON:K3C) – Bid Approach Could Spark CountersThis business sales and advisory group is in advanced discussions with Sun Capital Partners concerning a possible 350p a share cash offer from the US group.The news yesterday afternoon saw K3C's shares rising 12% to close around 338p.Although still in the throes of hammering out the details, I wonder whether the market's dealers are indicating a certain caution by marking the shares up by just 15p on the overnight price?K3C is currently valued at £248m, while its shares in the summer peaked out at 370p which then put a capitalisation of £272m on the business sales, recovery, corporate finance and restructuring experts.There have been other parties expressing an interest in talking takeover with K3C – perhaps that is why the market is being reticent in spooking the value just yet.Holders should sit very tight and await the outcome, which could take weeks well into 2023 to come to fruition.

[my retirement fund] 10/12/2022 09:02

The BOD will do what's best for their own futures, not the futures of the shareholders.

[robsy2] 10/12/2022 08:30

It is the BOD (22%) and a few main shareholders like Premier Miton (10% + of the shares) that will decide if 350p is a high enough bid.
350p gives the directors their growth share award, so 350p may be enough.
It certainly gets them what they want and it would probably be easier for them to be owned by private equity rather than suffer the ravages of being quoted on AIM.
If they get taken over, they can re-set more incentives as they continue their growth so if I was them I'd probably prefer that route.
For my part, I'd much prefer it if the bidders went away and we stayed independent because it seems to me that the business can go on and on growing, after all their aspiration is to be a 1 billion GBP company. I think they could do that.
I shall sit tight and await outcomes.

[johndoe23] 10/12/2022 07:20

Ignore that, back to normal now. Weird!

[johndoe23] 10/12/2022 07:19

Why has the bid/offer changed this morning from last nights close?! And trades showing thus morning?

[johndoe23] 09/12/2022 20:23

Yeah, 500p probably!!

[2bluelynn] 09/12/2022 17:05

Maybe a bid coming over week end on ibpo too John

[doobz] 09/12/2022 16:40

Not really tanking but certainly found a ceiling I'd say. Be fine, just ignore it :)

[johndoe23] 09/12/2022 16:21

Well IBPO now tanking for some bizarre reason

[doobz] 09/12/2022 15:52

I've seen bids fall through on gbg which hurt the share price Bids failed on ibpo similarly and it just carried on strong. I personally just see it as a win win from now, if they decide to pullout then k3c can carry on doing well in an extremely strong sector. If its taken out at 350 then its low but still an OK result.