Mbl Share Discussion Threads

[marben100] 05/10/2010 20:01

jeffian,

The reason people are suspicious is that a) managements usually cast a positive slant on good results, not a negative one*; b) they have been so evasive. Repeated requests for meetings have been made & refused.

Why would they act this way?

Mark

*E.g. they could have pointed out that they have been working with Morrisons for many years and that the relationship has been excellent but that, formally, the contract is due for renewal. Instead, they simply highlight that the contract is nearing the end of its duration - and re-emphasise that with a correcting RNS, to cause further uncertainty.

[jeffian] 05/10/2010 19:30

Aleman,

Ah, I see. You mean you won't get the divis if the company is taken over; I thought you were implying that they would actually cut or waive the divi, which seems unlikely in the context of increasing cashflow and profits and the Chairman's statement in the divi section of the Annual Report that "The Directors remain committed to delivering value back to shareholders and are proposing to pay a dividend of 7.5p/share in 2011, representing a 25% increase to the 2010 dividend".

I'm not sure why everyone is so convinced this is leading towards a 'cheap' MBO in any event. There must have been many better opportunities for TA to do that during the transformation from Air Music to MBL before the profits started to become apparent to the wider market. Having said that, the one thing that seems strange to me just having re-read the AR statement is that they actually had a 'Strategic Review' and devoted a whole paragraph to it saying "The Board HAS UNDERTAKEN a strategic review.....and FOLLOWING the strategic review, the Group's strategy...." (my capitals) which begs the question why they felt they need a new one a few weeks after the last one was completed!

[tanners] 05/10/2010 19:10

Interesting times ahead by the looks of it.......wonder if CR/burgerbarwomen has closed his short!

burgerbarwomen - 27 Jul'10 - 12:38 - 2257 of 2458

So around 9 months of negative sentiment and falling share price then? We all know that Mr Market hates uncertainty. Why buy the shares when profits could be decimated if Morrisons cancel the contract?

Morrisons will go overseas surely? Maybe Eastern Europe or China?

Massive over reliance on one key product/customer.

I remain short and proud!

[miamisteve] 05/10/2010 18:05

Shanklin - Wont make a blind bit of difference to JD. This episode is to irrelevant for anyone else to care about. All he will say is that the offer was 30%+ above the prevailing share price and given the long running low rating this seemed a fair offer.

when shareholders raised the issue about the disproportionality of TA's renumeration he defended it and announced a performance related scheme conveniently when they already knew that figures were going to be good, and of course for Cowgills loyalty he got a £300k bonus.

[microscope] 05/10/2010 17:44

I may be totally up the wrong tree but I would have thought this was a case of the bleedin' obvious?

My prsonal view of one very likely scenario - the price goes up, the Directors (or some of) fear that their hopes for a cheap MBO may have leaked out, and they rush out an RNS in the hope it might stop the price rising above whatever price they might have in mind?

In the end of the day whether it takes weeks or more likely months, and however much hot air gets expounded on other views, that is what my guess is, that we will find emerges.

[shanklin] 05/10/2010 17:32

If we were to see a really lowball offer for MUBL from TA, and it were recommended by the Board, my view is that this would turn into a reputational issue for Peter Cowgill, the Chairman, and Lisa Clarke, the FD.

I don't think it will be good for either of them to be seen to be party to a situation where:
- a massive amount of detail about the company is (IMHO) being kept from shareholders
- the company is taken out at a ridiculously low (Enterprise Value)/(Profit afer Tax) multiple.

Given Peter Cowgill is also Executive Chairman at JD., I really don't see how he can do anything other than actively support the rest of the shareholder base. Anything else and the resulting nasty smell would IMHO be transferred to JD.

[jeffian] 05/10/2010 17:24

"...the increasing dividend which now looks set to be lost again."

Eh?

[goonertone] 05/10/2010 17:11

Aleman

Shifted his shareholing into Sefton group, he's still here.

GT

[campbed] 05/10/2010 17:07

The wording of the RNS isued this afternoon looks odd and does not give a warm feeling to small shareholders.

My cynical take FWIW:

Share price rises - Nomad raises query and "As a result" RNS is issued about a "Strategic Review" which presumably means company pays for KPMG to do due diligence for backers of Trevor Alllen to take company private -- how else can a SR be quite so directly linked to a possible offer?- presumably at a knock down offer price.

The buyer who is active in the market is presumably not a connected person - if so that would set off a set of problems- but is a person who has got wind of above and is adding to their position to be better placed to argue for a better take out price.

With MBL having the board structure that it does, no doubt there will be calls for a small shareholder action group.

[aleman] 05/10/2010 17:00

Forgive me for being lazy but what happened to Peter Long? (It must be a tiresome read back through the thread.) I was at the AGM a couple of years ago when he had a rather loud row with the board. There was only me and them there. (Peter and business colleague.) How did they shake him off? I got the impression the board themselves were split about where to take the business and Long wanted dividends. They didn't want dividends while refusing to give a clear idea of what possible alternative plans for cash were. It put me off so much I sold out. Since then the finance director, who seemed the sensible one of the bunch - but he wasn't doing the rowing, left to replaced with the promoted finance manager who I would imagine is more likely to tow the line, whatever line that might be. I bought a few back a couple of weeks ago, persuaded back by the increasing dividend which now looks set to be lost again.

[yump] 05/10/2010 16:53

Funny business really, a strategic review on its own usually sees a company's share price plummet, (they never seem to come in good times) but one with a possible bid attached is a different animal.

Hard to see a bid coming from anywhere other than the major shareholders and doens't that reinforce the suspicions that others have had about the share price being talked down ?

Wouldn't doing the RNS to put the price up be a double-edged sword though ? Makes the buyer pay more, but also makes a management bid more expensive. Plus there'll be quite a few people selling out if it jumps up more, before a bid goes in at all.

Its all a bit 'Dallas' and just emphasises the increasing opacity of the board's intentions imo.

Does mention of a possible offer have to be backed up by evidence that there was one, or if it was a management bid, could they just say "well we thought about it, but changed our minds" ie. it could be made up without any consequences ?

[philjeans] 05/10/2010 16:37

I'll be happy with three quid.

But it'll be a battle.

[miamisteve] 05/10/2010 16:35

philjeans - Figures are even more compelling if you replace away Cowgills and Allens bonuses, for market rates.

Sorry forgot they are indispensable and without them the company is worthless.

[goonertone] 05/10/2010 16:30

MS

Is it necessarily an open market sale though? The last biggie was Sefton shifting shares between funds.

GT

[miamisteve] 05/10/2010 16:30

or could the transfer to Sefton by Peter Long been a strategy for him to continue acquiring without having to announce?

[philjeans] 05/10/2010 16:28

Market Cap now £25M; last year's earnings £10M.

That's what it says above.

Discuss.

[miamisteve] 05/10/2010 16:28

Sorry was plucking a figure out the air. Think they've got £2 in mind as a first offer and might do some shifting like holding back the dividend and offering £2.2 to get it over the finishing line.

If a 750k trade went through it has to be Sefton selling?

[goonertone] 05/10/2010 16:27

I blame DD :)

I think this is just another cynical move in the recent sorry history of the management announcements on MUBL. I struggle to think that Peter Cowgill is merrily going along with this but the evidence and timeline seems to imply that he is.

Today seems to me a deliberate move to halt the stakebuilding that was rumoured to be happening or make it as difficult and expensive as possible for the new shareholder. Thus allowing the company to continue merrily on its way of telling the shareholders nothing under the veil of "close period". The last thing they want is a new militant shareholder stirring the pot.


GT

[edmundshaw] 05/10/2010 16:18

Should also be at a premium to the average price over the last 6 months (or some such period). 20% premium to that would still only give around 180p, where we were 7 months ago;

...but I don't see any reason it should only be 20%, especially with the rating and prospects. Other than that they could force it through if institutions are lazy...

[deucetoace] 05/10/2010 16:16

Just browsing the LSE site - looking at the trades details shows a trade of 750,000 shares at £1.33 timed at just before 8.15 this morning.

[deucetoace] 05/10/2010 16:07

20% implies £1.70 - I'd imagine most will be livid if it were that low.

[miamisteve] 05/10/2010 16:04

My take is that ecommerce is going well as with the rest of the business and they want to take it private before the company rerates.

This leaked and due more to the suspicion of a buyer rather than the share price move they made the announcement. Have seen much larger swings with no forced comment on other stocks.

The rns is as downbeat as possible, and is made now so that they can announce a takeout price at a 20% premium to when the strategic review was announced.

[jeffian] 05/10/2010 16:00

Whatever is going on behind the scenes, I'm none too happy seeing this sort of announcement just before the AGM when I was hoping for a Trading Update and some further explanation of the rationale of the U-explore deal. In my experience of Public Company life, this puts them into a 'close period' which they can use to stonewall any questions at the AGM other than those about the historic accounts. I hope this isn't going to be the case and those noble shareholders making the trek North the the 9.30am Monday 18th AGM do not find it is a wasted journey.

[microscope] 05/10/2010 15:56

I seem to keep hearing a whistle being blown whenever I open this thread.

I thought it must be my computerscreen, or the tv, but maybe I have tinnitus?

And what's that dripping sound? Oh dear, I must go for a hearing test, or I may never hear MUBL's dulcet tunes again.