Logistics Development Share Discussion Threads

[lpavlou] 20/9/2024 19:18

Probably safe to assume that LDG will increase their stake in SQLI as we are sitting on cash. Will mean that we will now have 2 illiquid stakes and I wouldn't rule out an approach for APHWon't go down well with the dissenting shareholders

[spob] 20/9/2024 19:05

.
Swiss paul

There is another thread with the wrong name. Lol


I just use this to store some info

[spob] 20/9/2024 19:04

Wind-down request could narrow this stock's discount

The cash-rich investment company trades on a 38 per cent discount to NAV and has received a request for an orderly wind-down to return cash to shareholders

- Shareholder calls for wind-down of company
- NAV of £99mn (18.9p)
- 38 per cent discount to NAV

Logistics Development Group (LDG:11.75p) has received a requisition notice to convene a meeting to vote on an orderly wind-down of the Aim-traded investment company.

Huntress (CI) Nominees, a Jersey-registered investment vehicle which holds 6.86 per cent of the shares, wants the investment manager, DBay, to cease making new investments and prioritise the timely return of capital to shareholders. In results for the six-month period to 31 May 2024, the debt-free company held cash of £32mn (6.1p) and an investment portfolio worth £66.7mn (12.7p).

Since the accounting date, LDG has invested £2.4mn to raise its stake from 11.9 to 13.2 per cent in Alliance Pharma (APH: 35.4p), a distributor of consumer healthcare and pharmaceutical products. The holding is worth £25.2mn (4.8p). In addition, LDG has realised £1.65mn and banked a £0.6mn profit from the sale of its stake in Mission Group (TMG :24p), a UK advertising and marketing specialist. It means that LDG’s current cash pile, which is placed on deposit with Investec at an interest rate of 3.75 per cent, is around £31.5mn (6p), or half its market capitalisation of £61.6mn.

Other notable listed investments include a 9.1 per cent stake in SQLI (FR:SQI), a leading pan-European digital transformation business, which has a current value of €17.1mn (£14.4mn, or 2.7p).

LDG also holds two non-listed investments: a 27.5 per cent stake worth £17.8mn (3.4p) in Finsbury Foods, a bakery manufacturer that was acquired last year for £143mn by funds managed by DBay; and a £10mn (1.9p) high interest payment in kind (PIK) fixed-rate unsecured loan note issued to The Power of Talent Midco, a special purpose vehicle that owns the operating companies of unlisted Nash Squared Group, a recruitment and consultancy group.

Deep share price discount to book value

As has been the case since I included LDG in my 2023 Bargain Shares Portfolio, the shares are in deep value territory as highlighted by NAV being 60 per cent higher than the company’s market capitalisation.

This has not gone completely unnoticed as Richard Griffiths, the founder of investment bank Evolution and boutique finance house ORA Capital, has been stake-building. Known in the City of London as the 'Welsh Wizard' due to his stockpicking ability, the Jersey-based investor raised his holding in LDG from 10.9 to 15.3 per cent at the end of May (‘Welsh wizard' sees value in this stock – and so do we’, 28 May 2024).

The board is cognisant of the fact that LDG’s share price fails to reflect the value of the company’s assets, so requested and were granted authority to repurchase up to 15 per cent of the 524mn shares in a buyback programme that should enhance net asset value (NAV) per share. However, a concert party owns a 34 per cent stake, and the resolution for a Takeover Panel waiver failed to receive enough backing, so the buyback cannot proceed. In its absence, an orderly wind-down of the company would undoubtedly narrow the 38 per cent share price discount to NAV in double-quick time.

The board is now considering Huntress’ request and is advising shareholders to take no action at this stage. However, I can now see the activist’s resolutions garnering support from other shareholders. Buy.

[spob] 20/9/2024 18:54

Things getting interesting here.

[lpavlou] 20/9/2024 18:41

It's Dbay doing the acquiringSQLI, a European group dedicated to digital services, announces that DBAY Advisors, its reference shareholder since 2019, has announced its intention to acquire all the SQLI shares not held by the Offeror at a price of €54.00 per share in the context of a public offer followed by a possible squeeze-out.In order to achieve this, Synsion BidCo (the "Offeror"), a company indirectly controlled by DBAY Advisors, which holds 83.5% of SQLI's share capital and 80.9% of the theoretical voting rights, has today filed with the AMF a simplified public tender offer (the "Offer") for all the shares of SQLI not held by the Offeror.CAPITAL CONTROLLED AT OVER 83% AND A STOCK MARKET LISTING THAT IS NO LONGER JUSTIFIEDThis Offer is based on the observation that the operational functioning of the Company in the event of delisting would be simplified in view of the provisions to which companies whose shares are admitted to trading on a regulated market are subject. Furthermore, given the current shareholder structure and the low trading volume of SQLI shares, listing is of limited benefit to SQLI. In this regard, the average daily trading volume in SQLI shares declined by 39% between 2023 and 2024 [1].The Offeror therefore believes that the Offer presents a liquidity opportunity for SQLI's shareholders. The Offeror has also indicated that, if the results of the Offer so permit, it intends to implement a squeeze-out on the Company's shares.The terms of the Offer are more fully described in the draft offer document available on SQLI's website and on the AMF website (www.amf-france.org).A PREMIUM OF MORE THAN 30%The proposed price values 100% of SQLI's capital at around [2] at around €252m, representing a premium of [3]:37% on the share price on the last trading day prior to the announcement.33% on the volume-weighted average share price over sixty days.31% on the six-month volume-weighted average share price.COMMITMENTS RELATING TO 5% OF THE CAPITALAmiral Gestion and Moneta Asset Management, the Company's main institutional investors, have undertaken (i) to sell their shares to Synsion Bidco prior to the opening of the Offer, in the case of the former, and (ii) to tender their shares to the Offer, in the case of the latter. In addition, individual shareholders, including certain employees, have also undertaken to tender their shares to the Offer. These transfers and contributions will be made at the Offer price.Taken together, these commitments represent 5.1% of SQLI's capital and 4.9% of the theoretical voting rights.AN OFFER WELCOMED BY THE BOARD OF DIRECTORSOn the basis of the preliminary work of the ad hoc committee set up on 28 August 2024 and comprising 2 independent directors, Brand & Retail represented by Nathalie Mesny (Chairman of the ad hoc committee) and Ariel Steinmann, and Philippe Donche-Gay, the Board of Directors of SQLI, meeting on 18 September 2024, approved the principle of the Offer.A reasoned opinion will be issued by the Board of Directors in the light of the report of the independent expert, Crowe HAF, represented by Olivier Grivillers and Maxime Hazim, who will be responsible for assessing the financial terms of the Offer and the squeeze-out.According to the envisaged timetable, the Offer could be completed before the end of 2024.The Company has applied to Euronext to resume listing of its shares at the opening of trading on Monday 23 September 2024.

[lpavlou] 19/9/2024 22:33

You would have expected the news to have come out by now. Why suspend the shares so early, you normally do it just before an announcement is made.It must be for an offer for SQLI and not just Dbays stake.

[swiss paul] 19/9/2024 19:21

a very queit board - what gives?

[kirmich] 19/9/2024 19:14

i think the chances are increasing that it is an outside offer, given the fact there is still no news yet.

if they are planning on taking out the remaining shareholders, why wait?

not a sure thing, we will probably know tomorrow, when the half year numbers are on the agenda.

[lpavlou] 19/9/2024 09:56

Odds are that Dbay will take this private unless someone has agreed to take them out, which would be a better short term outcome for LDG shareholders.

[aliverpoolgent] 18/9/2024 13:12

Sincere apologies. I retract my earlier post. I believe I have misunderstood the mattter. ALgent.

[aliverpoolgent] 18/9/2024 12:55

Good afternoon. The bidder is DBAY. What are the ramifications of that I wonder? I thought I'd be seeing an early exit here, but now I'm not so sure, though not too unhappy. Surely, some of LDG's mini-cash mountain will be used in the bid? Enjoy the afternoon all. ALgent (pondering).

[gb904150] 18/9/2024 09:11

Thanks for that kirmich



yes, suspension this morning awaiting a news release.

183m € Mcap. £154m or so. 9.1% equates to £14m.

Could be a nice uplift if it's a t/o situation. Let's wait and see.

18/09/2024 9H00
Motif: A la demande de la société, dans l'attente de la
publication d'un communiqué de presse et
jusqu'à nouvel avis

[kirmich] 18/9/2024 06:17

Suspension of SQLI shares on the Paris stock market this morning. End game? LDG owns 9,1% of SQLI

[lpavlou] 14/9/2024 21:15

Recent rise in APH has added another 1.3p to the NAV. If the shares get back to their cost of 57p, that will add another 1.7p to the NAV. We would then be back at 21p NAV and trading at a 50percent discount to NAV

[lpavlou] 11/9/2024 21:30

I couldn't make sense of the FF valuation either. Suppose we'll have to wait until end December when they publish their latest accounts

[kirmich] 11/9/2024 01:15

On another note, in the article of Simon Thompson i read on finsbury :

LDG also holds two non-listed investments: a 27.5 per cent stake worth £17.8mn (3.4p) in Finsbury Foods, a bakery manufacturer that was acquired last year for £143mn by funds managed by DBay

I find this odd. At july 1st 2023 the last numbers Finsbury published they announced equity of 126 million. Based on those number, the 27,5% in Finsbury should be valued higher than the 17,8 million pounds Simon Thompson is refering at. Presumably Dbay has loaded a lot of debt into Finsbury to pay for the acquisition (as the ownership % of LDG in Finsbury has gone up, without putting extra cash in, or maybe they have but i haven't seen it) and the equity of Finsbury has come down (maybe by form of a dividend or a capital reduction)

But it's all guessing by my part or have i missed something? They ought to be more open about this.

Finsbury was a cashflowmachine with free cashflow of over 20 million for 2023 and 2022. The focus is on Alliance, but they bought Finsbury on the cheap so i find the current value of 27,5% at 17,8 million strange and low.

Any insights out there?

[kirmich] 11/9/2024 00:56

Alliance pharma going up slightly, LDG in it for 71 million shares at a cost of around 57p. Alliance has gone up from 36p to 42p now, a long way off of the average purchase price, but at least for now it is heading in the right direction.

With the general meeting requisition notice, things might get interesting. Clearly they are trying to stop Dbay increasing their ownership percentage.

Sad to see no update on Finsbury in the interim results, we can only presume (and hope) they are continuing their path.

[zoolook] 06/9/2024 10:09

My apologies I wasn’t aware the buybacks stopped. Was a reason provided?

[lpavlou] 05/9/2024 20:22

They blew the previous buyback, by ending it early unnecessarily It's difficult to see an exit given the PIK and the FF stake, which are both illiquid. Their APH stake is too large to sell, so maybe they could distribute it to shareholders. I thought they may take it out, but will struggle now as they may not get shareholder support, assuming they need it. Let's see if these investors are prepared to increase their stakes and exert some real pressure on Dbay.

[horndean eagle] 05/9/2024 18:31

I didn't proffer an opinion on whether buybacks made sense or not. My point was they had authority to buy a lot of stock and brought diddly squat. They were insincere about it. Nothing to say it would have been any different this time around. The share price collapsed when they stopped the buyback. Investors thinking DBAY were running it just for their own interests.

[zoolook] 05/9/2024 18:19

In reply to Horndean Eagle:

I disagree. Buybacks below TNAV per share makes total sense as a way of increasing the TNAV. I see the governance as the problem ie DBays dominance as a shareholder and in the opaque nature of their investment decisions (offset by the skin they have in this game). I can’t see any other rational reason for the ongoing discount other than the market not always being rational.

[value hound] 05/9/2024 16:03

Re-tipped by Simon Thompson:

Wind-down request could narrow this stock's discount

The cash-rich investment company trades on a 38 per cent discount to NAV and has received a request for an orderly wind-down to return cash to shareholders

- Shareholder calls for wind-down of company
- NAV of £99mn (18.9p)
- 38 per cent discount to NAV

Logistics Development Group (LDG:11.75p) has received a requisition notice to convene a meeting to vote on an orderly wind-down of the Aim-traded investment company.

Huntress (CI) Nominees, a Jersey-registered investment vehicle which holds 6.86 per cent of the shares, wants the investment manager, DBay, to cease making new investments and prioritise the timely return of capital to shareholders. In results for the six-month period to 31 May 2024, the debt-free company held cash of £32mn (6.1p) and an investment portfolio worth £66.7mn (12.7p).

Since the accounting date, LDG has invested £2.4mn to raise its stake from 11.9 to 13.2 per cent in Alliance Pharma (APH: 35.4p), a distributor of consumer healthcare and pharmaceutical products. The holding is worth £25.2mn (4.8p). In addition, LDG has realised £1.65mn and banked a £0.6mn profit from the sale of its stake in Mission Group (TMG :24p), a UK advertising and marketing specialist. It means that LDG’s current cash pile, which is placed on deposit with Investec at an interest rate of 3.75 per cent, is around £31.5mn (6p), or half its market capitalisation of £61.6mn.

Other notable listed investments include a 9.1 per cent stake in SQLI (FR:SQI), a leading pan-European digital transformation business, which has a current value of €17.1mn (£14.4mn, or 2.7p).

LDG also holds two non-listed investments: a 27.5 per cent stake worth £17.8mn (3.4p) in Finsbury Foods, a bakery manufacturer that was acquired last year for £143mn by funds managed by DBay; and a £10mn (1.9p) high interest payment in kind (PIK) fixed-rate unsecured loan note issued to The Power of Talent Midco, a special purpose vehicle that owns the operating companies of unlisted Nash Squared Group, a recruitment and consultancy group.

Deep share price discount to book value

As has been the case since I included LDG in my 2023 Bargain Shares Portfolio, the shares are in deep value territory as highlighted by NAV being 60 per cent higher than the company’s market capitalisation.

This has not gone completely unnoticed as Richard Griffiths, the founder of investment bank Evolution and boutique finance house ORA Capital, has been stake-building. Known in the City of London as the 'Welsh Wizard' due to his stockpicking ability, the Jersey-based investor raised his holding in LDG from 10.9 to 15.3 per cent at the end of May (‘Welsh wizard' sees value in this stock – and so do we’, 28 May 2024).

The board is cognisant of the fact that LDG’s share price fails to reflect the value of the company’s assets, so requested and were granted authority to repurchase up to 15 per cent of the 524mn shares in a buyback programme that should enhance net asset value (NAV) per share. However, a concert party owns a 34 per cent stake, and the resolution for a Takeover Panel waiver failed to receive enough backing, so the buyback cannot proceed. In its absence, an orderly wind-down of the company would undoubtedly narrow the 38 per cent share price discount to NAV in double-quick time.

The board is now considering Huntress’ request and is advising shareholders to take no action at this stage. However, I can now see the activist’s resolutions garnering support from other shareholders. Buy.

[kinbasket] 05/9/2024 15:26

Makes sense to me. I re-read the original proposal and the details of the waiver. If the concert party is able to creep their shareholding to just over 40% via the buyback it is much harder for the independent shareholders to push for a wind up. It looks to me that Dbay and mates voted for the buyback 176m (181m total in concert party) and everyone else voted no to the buyback and/or no to the waiver.

I don't think anyone voted yes to the buyback and no to the waiver.

It looks like battle lines are being drawn.

[lpavlou] 05/9/2024 12:11

This smells very fishy. Can't recall a buyback ever being rejected by shareholders.Why would shareholders vote for the first resolution and then vote against the second, when it's obvious they are both linked. The only sensible conclusion is they want Dbay to take out LDG. But why would they when they in essence control the company. It would appear the Cyrus bought their stake off others as Esken are still the second largest shareholder with 64m shares. They with Krigg would have 99m shares, which might account for the rejection of the second vote. Dbay and LDG investments are too intwined to force them to cash out.

[horndean eagle] 05/9/2024 07:45

they were not sincere about buybacks. I think that is where a lot of the anger is stemming from. performance has been appalling since they cashed out on stobart.