Matrix European Real Estate Share Discussion Threads

[sand dollar] 05/5/2010 08:39

tim
Do you think that the 5000 block buys are the start of the share buyback?

[karldinnel] 05/5/2010 08:33

OK. Managed to pick up a few more just now. Had to pay 124p for them, but to be fair I would have thought that topping up after the IZD Tower sale news had been confirmed would have meant paying a lot more.

Here's to two pounds a share during the next few weeks!

[tim00] 05/5/2010 08:14

Buyback in progress today?

[karldinnel] 05/5/2010 08:07

My bloody selftrade account won't let me buy any...

I notice that the spread this morning is still wide. Presumably, market makers trying to pick up shares on the cheap...

[tim00] 05/5/2010 07:08

If anyone agrees that a buyback is in our best interests, they might try contacting Ian Blake (though of course he is not a Director of the company). Some feedback from shareholders might help.

[tim00] 05/5/2010 06:26

This may be obvious, but a buyback programme incentivises investors to buy shares ahead of the programme. The problem is, we don't know how the Board feel about buying back shares. It looks a no-brainer to me: the returns to NAV from buying £3 for £1.20 ish far exceed an equivalent amount of property investment. Of course the market for MERE shares is illiquid, but that just means a small number of buys by the company can rapidly increase the share price Who would sell MERE shares when they knew the company was buying, pushing up the sp?

[tim00] 05/5/2010 06:16

IZD was valued at EUR 220 mn in the accounts at end-December. It realised EUR 212 million so there will be a loss of about 18p per share on the NAV. However, since end-December sterling has risen against the euro, reducing the exchange rate hedge liability substantially (by about £8 million). Assuming no change in property values, the NAV at end-June should be around £3. If we buy back any shares, including the LBG shares, the NAV will rise obviously. With only 37.7 mn shares outstanding, a buyback can raise the NAV substantially at the current share price. Last, I estimate about £49 million cash currently, net of additional debt repayments etc.

[johnv] 05/5/2010 00:14

Not too worried about UK shares but this one & iere are making me a bit nervous due to euro/Greece problems.

[karldinnel] 04/5/2010 23:11

I'm concerned that the problem with this share is that not enough investors are aware of the opportunity here.

It's only a concern, and not a real problem, because I am in this for the long term. If people don't want to recognise the value here then fine, because as more cash becomes available to me from realising other investments I'll top up safe in the knowledge that I'll be collecting handsome dividends down the line...

However, what would really upset me is if a takeover bid came along, say at 150p per share. I either want 300p per share for these short term or dividends of 20p/25p per year starting, say, a year from now...

[karldinnel] 04/5/2010 17:53

LOL. I have a friend, a graduate of INSEAD no less, who believes in the efficient market hypothesis (mainly because he believes everything he learnt on his MBA course)

I certainly don't believe in efficient markets. If I did, I wouldn't be investing.

Still think it is poor PR to release the news on a day when the markets are scared about the election, Europe, etc. One answer to this might be that the guys running MERE want to top up their holdings at cheap levels themselves, but couldn't deal until the IZD transaction was announced... Me being cynical or could there be something to this?

[tim00] 04/5/2010 17:45

Karl, the discount to NAV is currently around 60%. Don't assume the market is efficient, the share price doesn't currently reflect the fundamentals. The buyers at 130p didn't know the share price would subsequently fall, no one knows such things. The share price will rise strongly if they start buying back shares.

[karldinnel] 04/5/2010 17:37

Hmmm... very strange. I have a number of questions:

(i) Why release this RNS at 4pm on a day when shares are generally taking a hammering? Surely it is the job of those running MERE to maximise shareholder value, so it seems strange to release the news near the end of the session when 7am tomorrow morning would make better sense.

(ii) Is there something going on in the background that is affecting NAV adversely, which we don't know about?

(iii) Maybe we investors were expecting too much from this piece of news, and when the Austrian press reported the sale a few months back the subsequent jump priced in the full value of the IZD sale to MERE. Could this be the case?

(iv) If so, why were there some pretty hefty buys at 130p-plus not so long ago?

[tim00] 04/5/2010 17:02

not just from LBG, the AGM also gave them authority to buy back more shares if I remember correctly.

[affc21] 04/5/2010 17:00

Great news, but poor day to release it.

Completion of the sale of the company's asset in Vienna - the IZD Tower - at a price of EUR212.25 million.

Tim - I'm all for a share buy back from LBG.
* EUR3.00 million is reserved for the potential buyback of the Company's shares held by LBG.


Have bought a few more towards the end, but struggled to get more than a 1000 shares online. So I'm guessing there are not a lot of shares in the hands of the MM's.

Let's see what tomorrow brings.

[tim00] 04/5/2010 16:51

Discount to NAV is around 60%. MERE now has plenty of cash, a buyback programme would yield far higher returns to shareholders than property acquisitions.

[tim00] 04/5/2010 16:33

The company achieved a good price for the sale. It should now start buying back some shares with surplus cash - partly to support the share price, also to raise the NAV per share. Surprised there was no reaction in the share price, but then it's not a good day to be announcing news.

[a75] 04/5/2010 16:17

price ought to be moving up by 50p dont get it

we are 40% short of NAV i seem to remember

[lamf] 04/5/2010 16:14

RNS Tower sold! Share price reacting wildly - NOT. Debt facility sorted. Share price reaction - down. Any thoughts? Does someone know the last official Nav?

[kramch] 27/4/2010 11:35

My guess is the deal is effectively done, the buyer has locked into a good price and is unlikely to back out, the bank is happy, and MERE are just trying to hand onto the rental stream as long as possible. But could be entirely wrong. K

[karldinnel] 27/4/2010 09:51

Although I was banking on the IZD Tower sale for boosting the share price up toward £2, I am now thinking that it is worth hanging on to it for long-term returns. But can MERE pull the plug on the deal now, or have they gone so far down the road that it can't be stopped?

[kramch] 27/4/2010 08:40

By my reckoning their net profit (excluding property sales etc) falls by half once IZD is sold, and they go from a pe of c 3 to c 5 (if the LBG shares are bought in) - still looks very cash positive, but real shame they were forced to sell IZD. K.

[tim00] 27/4/2010 06:49

It is interesting that on this and other websites, there is a lot of speculation that the "delay" in signing off IZD implies something else must be going on, eg hagglng over the price, considering other means of deleveraging, etc. However, if I were a Director of MERE and the IZD covenant test was not until end-June, I would see no point in selling IZD much before then. I can't think of any advantage to MERE in selling earlier. Can anyone else? I really don't think that the long time in signing off the deal means anything at all.