Lees Foods Share Discussion Threads

[davydoo] 12/4/2012 18:27

Skyracer 'they deserve a good exit' are you serious?

As directors aren't they appointed by shareholders and paid a contracted salary to execute their roles?

If they also choose to hold shares, why do they deserve anything different to any other shareholder?

I no longer hold here, but am following with interest as i predominantly invest in small caps, and don't want to see a continuation of this kind of behaviour.

[cwa1] 12/4/2012 18:17

Couldn't agree more David ;-)

[skyracer] 12/4/2012 18:15

I like Lees and commend them for their efforts to keep the company operating through the terrible winter of 2010/2011. So they deserve a good exit. However, 230p just seems too low, and may be an error of judgement by the BoD. If Unicorn got on board I suspect you would be successful David.

[davidosh] 12/4/2012 18:09

Masurenguy....It is even better than that. Here is what they said in the interims..

''Our cash reserves have doubled since this time last year as we remain strongly cash generative, whilst at the same time maintaining an investment programme in plant and equipment in order to improve efficiencies.''

"Looking ahead to the full year performance, despite the raw material cost increases experienced in the first six months and the potential for further cost increases, we expect pre-tax profits to be well ahead of current market forecasts."

Since then a further half million in cash from HMRC so that is probably near £2m in cash sitting there and exactly the reason why they only need such short six months bridging finance to pay off shareholders ! But that is our cash from previous profits that they are using and could give us very satisfactory special dividends or increased yields for the forseeable.

[masurenguy] 12/4/2012 15:58

Looks like another BoD with an eye on the main chance !

RNS Number:1744O
Lees Foods Plc
29 June 2005
Admission to AIM

Group Nominated Adviser is Shore Capital & Corporate Limited and Broker is Shore Capital Stockbrokers Limited. The issued share capital on Admission is 2,011,751 Ordinary Shares capitalising the Group at £4.02m based on an indicative share price of £2 per share. Raymond Miquel CBE, Executive Chairman and Managing Director of Lees, said: "The admission to AIM marks a new phase in the growth and development of the Group and will enable us to access capital for growth as and when opportunities arise. It will raise the Company's profile, with customers, suppliers and potential candidates for acquisition and will create an objective market value for the business, potentially broadening the shareholder base and providing liquidity for the shares."

So what has changed Raymond ?

Incidentally, on listing the market cap reflected a PER of 12 and annual sales were circa £13m. They haven't published any full year accounts for 2011 yet (Hmmm..I wonder why !) but one might extrapolate sales of circa £20m and PAT of circa £550,000 from the interims. With net assets of £4.9m at the interims supplemented by the £500,000 tax rebate, the shareholders equity should now be circa £5.4m.

So what is the MBO offer currently worth ? With circa 2,475,000 shares in issue the MBO offer of 230p per share is worth £5.7m, a premium of around £300,000 to existing shareholders equity.

So what makes the BoD think that shareholders would be interested in that price ? Looks like a hostile bid might result in a much better deal for the external shareholders but would there still be jobs for the boys
if any such bid was successful ?

[davidosh] 12/4/2012 15:14

You have to laugh...the buyout lawyers and so called city professionals say it is a good idea to delist and save money (so long as you pay our fees for assisting you !!)



They claim the £20m turnover is too low for a listed company ! Well why the $^%&*£ did it list in 2005 then when turnover was barely half of the current level and eps just 11.9p ?? It was brought to market at £2 per share when looking to grab our investment money but now they want to take the ball home we are offered £2.30 when the eps is heading for 33p this year according to forecasts. Not to mention all that cash on the balance sheet. Incidentally what about our dividend due next month ???

[cwa1] 12/4/2012 10:19

Fabulous piece in The Herald this morning, well done David :-))



SMALL investor group ShareSoc is poised to launch a campaign against the attempted management buy-out of macaroon house Lees Foods for £5.6 million.

Shareholder David Stredder, who is also a ShareSoc director, argues that Lees, famed for confectionary such as snowballs, is worth upwards of £3 a share and that the £2.30 bid on the table is tantamount to "stealing away" the company.

The Herald revealed yesterday that institutional investor Unicorn also believes the cash offer from Lanarkshire-based Lees directors undervalues the company.

Mr Stredder told The Herald: "I would have valued this company if someone external was taking a look at it, at something north of £3.

"That suggests they are stealing it away.

"It listed seven years ago at £2 a share. So an exit at 230p doesn't seem a very good return. It seems opportunistic."

Won't post any more to avoid potential copyright issues but well worth a look. Great to see The Herald running with it, hopefully a few local holders will sit up and take notice now.

[joe say] 12/4/2012 07:13

davidosh - just read your offer but would prefer to leave my limit order intact. Sorry

I do though wish you well with your action group and shall watch from interest in the sidelines.

[davidosh] 11/4/2012 22:54

In advance of any shareholder action group being set up I will keep a running total for the private shareholder holdings communicated here...

nitnia....5000
davidosh..16500
CWA1......
mustbefunny..2000
Joe Say...
Biscuitbarrel(iii)...3000
jbarker555...4800
Panosear (TMF) 6000

Unicorn Aim Vct hold 5.32% and did not give an irrevocable undertaking to accept the offer.

the total issued share capital of the Company is 2,464,751 Ordinary Shares

Alongside communication received via email from three shareholders we are already at 3% of the company. To gain 25% of those eligible to vote we probably need just 12% of the total shareholding.

[cwa1] 11/4/2012 20:29

Every little helps I'm sure ;-)

[jbarker5555] 11/4/2012 20:09

davidosh - 4800 if it helps :)

[interceptor2] 11/4/2012 12:52

Like cfro I had these on my watchlist with a view of buying on future positive RNS releases. When I saw the RNS with 230p offer, it seemed obvious that it was far too cheap and an opportunist offer that deserves not to succeed.

Good luck to holders here, davidosh deserves your support. I will follow with interest.

Regards ic2...

[cwa1] 11/4/2012 12:29

If they are indeed controlled by one of the board members then that does sound a bit "strange". Would be good to hear from anyone with a working knowledge of the requisite code and what they think of that.

I really hope that Unicorn vote against this. Think I'll drop them an email with my thoughts and a link to this board so as they realise there is a serious groundswell against this offer price.

[davidosh] 11/4/2012 11:28

But the directors remained tight-lipped over why they were choosing to take the company private. Pre-tax profits at the company have risen from £379,000 in 2008 to just under £1m in 2010, despite rising sugar prices and other higher raw material costs. In October, Miquel predicted 2011's profits would be "well ahead" of City forecasts for £900,000.

All of the members of the board at Lees, which has been listed on the Alternative Investment Market (Aim) since 2005, are involved in the proposed management buy-out and so the offer has been recommended to shareholders by the firm's nominated advisers at Shore Capital. Normally, such an offer would be considered by a firm's non-executive directors, but Lees chairman, Chris Grieg, died in February.

The directors already have the backing of investors representing 40.9 per cent of the shares not held by management. Coven and Exchange Shareholders have indicated they intend to vote in favour of the deal, taking the total to 70.9 per cent. The directors need the backing of 75 per cent of the votes for the deal to go through.

Why are Coven allowed to vote if their shares are held by one of the board members ? Must be part of the concert party surely ?

[davidosh] 11/4/2012 10:52

In advance of any shareholder action group being set up I will keep a running total for the private shareholder holdings communicated here...

nitnia....5000
davidosh..16500
CWA1......
mustbefunny..2000
Joe Say...
Biscuitbarrel (iii)...3000

Alongside communication received via email from three shareholders we are already at 3% of the company

[cfro] 11/4/2012 10:42

Disgusting the way shareholders have been treated here. I dont own any shares but have been watching LEE for some time. Always been undervalued imo.

Good luck to the shareholder action group being set up.

[cwa1] 11/4/2012 10:27

Morning

Article in The Herald this morning.

Gist of it is that Lloyds back it but leading investor unicorn, with 5.3% think it is worth "considerably more"

Balanced article but hints that some holders want more!

[davidosh] 11/4/2012 08:06

Joe Say...i will happily buy your remaining shares if you email me with your details. The way to protect our position and challenge the directors is not to show weakness by selling out. My personal intention is to seek an exit multiple in line with the multiple that was achieved when the company listed. On top of that the company is now significantly stronger with five times more cash on the balance sheet !

They have not left the market yet and should be doing their best to achieve the best return for ALL shareholders.

These guys hold the key to our defence as they hold 5.3%...

[joe say] 11/4/2012 07:55

and as an aside the 1st thing I did y'day was cancel a limit buy order I have had in place for the last week - the irony !

[mustbefunny] 11/4/2012 07:47

still hold 2000

[joe say] 11/4/2012 07:08

davidosh - fully support your campaign and wish you luck but must point out that sold some yesterday and have an order in for my remaining holding.

Down right disgraceful behaviour imo

[davidosh] 10/4/2012 17:27

Coven-Sa Ltd 544,085 22.26

This is listed as a company controlled by....
Klaus Perch-Nielsen 238,471 9.75

That surely means KPN has over 30% !?

[davidosh] 10/4/2012 17:18

In advance of any shareholder action group being set up I will keep a running total for the private shareholder holdings communicated here...

nitnia....5000
davidosh..16500
CWA1......
mustbefunny..
Joe Say...