Nexus Infrastructure Share Discussion Threads

[pr100] 03/3/2023 10:33

boadicea, it may not be entirely voluntary for shareholders based in some overseas territories…

"No steps have been taken to qualify the Tender Offer or to authorise the extending
of the Tender Offer or the distribution of the Tender Form in any territory outside the
United Kingdom."

[pr100] 03/3/2023 09:03

On reflection, today's share price values Tamdown shares at 157p each.

EXAMPLE
Buy 1000 NEXS shares today @ 162p = £1620 outlay
Sell 830 back to Numis @ 163p = £1353 income
Leaving 170 Tamdown shares bought for £267 or 157p each.

That's still less than Tamdown's assumed cash assets but not quite such a screaming buy. But it's a clue that the MMs will price up the restructured business at around 157p per share when they start trading - if there are 7.5m shares in issue. And by my calculations that price should move quickly to above 200p if the company still has around £16.5m cash. But we have been warned that Tamdown's cash has been temporarily stressed over the past few months so shareholders can't make a judgement unless Nexus update Tamdown's current cash position.

[p1nkfish] 02/3/2023 14:58

Very clearly stated pr100.

[pr100] 02/3/2023 14:36

Sorry for the confusion. The debate is only about whether current shareholders should take up their Tender Offer entitlement. It makes little or no difference whether the cash is returned to shareholders or not as, for me, the decision hinges solely on the valuation the market attributes to Tamdown.

Assuming there are no skeletons in the cupboard, and notionally that no-one subscribes to the Tender Offer, then Tamdown would have c. £80m in cash and 46m shares in issue - or c. 180p per share.

And if everyone subscribes to their full entitlement then Tamdown will have around £16.5m in cash (at Sept 2021) and 7.5m shareholders - or c. 220p per share.

That doesn't mean that Mr Market will price up the new Tamdown shares at 220p of course but with no debt the business should be saleable for more than that.

The mystery is why the current share price values the Tamdown shares at zero.

[boadicea] 02/3/2023 14:32

That's a lot of money voluntarily surrendered (approx. £64.5k) in yesterday afternoon's big dump at 150p compared to taking the offer. Clearly they either didn't expect it to go through or were desperate for cash.
It also explains the price action - but not much more.

[p1nkfish] 02/3/2023 12:09

How much if any to tender?
What value will be left over at what price?

[fastbuck] 02/3/2023 12:03

PR,I do not understand your logic. The 2 businesses have been sold already, shareholders approved that on 16 January. The sales were completed as previously RNS.The only vote now is to return cash to the shareholders via the tender or leave the cash in the company, the company who does not need to cash, voting against the company is asking the company to keep the money in the bank or buy something with it.

[pr100] 02/3/2023 11:27

Tamdown cash at Sept 2022 was £4.6m according to the Nexus FY results but has clearly fallen since then judging by the 30 Dec RNS admission that "Cash within Tamdown has come under pressure since year end due to higher trading activity coupled with higher levels of debtors." What we need to know is its cash position today but that information is withheld. We do know that Tamdown will receive £12m from the proceeds of the asset sale but that doesn't tell us the net cash position.

Clearly, if Tamdown NewCo had net cash of £16.6m, no debt and only 7.5m shares in issue (assuming full take-up of the Tender Offer) then Tamdown on its own should be worth at least its cash value of 221p per share. So either the NEXS share price today is very wrong/manipulated or there's a lot less cash in Tamdown, and maybe other skeletons, which only the insiders know about.

The major shareholder seems very keen to take most of his cash out of Tamdown to fund a controlling interest in the divested operations without having to share the rewards with us pesky retail shareholders. To all intents and purposes this looks like an MBO - but only of the best bits of the group.

While it may be true that Triconnex and eSmart need investment, I can't figure out why Tamdown had to be dumped in order to raise that cash since the current Nexus Group has demonstrated its creditworthiness over time.

In short, this looks like shareholders are being kicked out of Triconnex and eSmart on the cheap so that the suits can pocket all the gains.

The BOD own 23% of the equity and need 75% support to get this proposal through the GM on 17 March. I don't think it's a done deal and I will be voting against unless more information is provided pronto.

[boadicea] 02/3/2023 11:11

A weak market this morning, leaving apparent room for arbitrage.
This could indicate ...
.scepticism about the tender going through, or
.fear by modest holders of being left with a miniscule rump (so dump the lot now) or
.deliberate suppression of the market to make the offer look generous or
.none of the above!
Take your pick.

[p1nkfish] 01/3/2023 22:47

New banking facility interest rate - most likely higher than the old AIB revolving line of credit. Perhaps a lower amount at higher rate now they will have an extra £2M on the balance sheet.
Any thoughts?

[boadicea] 01/3/2023 18:27

If the shareholders aren't happy they should vote it down. Perhaps they will.

[pr100] 01/3/2023 15:57

A bid at what price though? A realistic low-ball offer would still have to be over 200p imho.

Not that the BOD seem too keen to allow one since everything is being processed at breakneck speed. Shareholders have to decide before they can even ask questions at the GM.

It's a bit of a concern that they didn't get the Tamdown 2022 results out in a timely manner. Valuing Tamdown is key to any shareholder decision.

[boadicea] 01/3/2023 15:18

Logically, accepting a tender offer is a sale carrying cgt implications outside an ISA. Only those lucky enough to have bought around the lows will find this a significant worry.
If the tender were not passed at the gm and the company instead opted for a gigantic special dividend (improbable) that would be taxable as dividend income. (Kills the cat by choking it with cream.)

Isn't the company now wide open to an opportunistic low-ball bid?

[pr100] 01/3/2023 14:06

Steve Moore on Shareprophets advises taking the money for 83% of your shares and holding on to the remaining shares to see how Tamdown pans out.
hxxps://shareprophets.com/views/67119/nexus-infrastructure-details-tender-offer-and-whats-the-outlook-from-here
Either way, NEXS is surely a raging buy at today's share price which values Tamdown at approx 0p.

[pr100] 01/3/2023 13:39

OTOH, if shareholders don't subscribe to the Tender Offer then the number of shares in NewCo/Tamdown will be considerably higher than 7.5m, as will the cash pile presumably.

For some, the decision to sell or not would be influenced by their tax liability on the proceeds of sale - which will be at CGT rates at best and possibly at dividend rates since HMRC hasn't given any guidance. For those who may lose a third of their 163p sale price to tax, that's a bummer.

[pr100] 01/3/2023 10:25

I can't see anything sinister in Tamdown's accounts (nor its profitable plant hire and unprofitable manpower subsidiaries). Finance charges for y/e 30/9/21 were modest at £29,000 so the mortgages and associated debentures aren't onerous.

I'm thinking that with around 400p per share in cash with around 7.5m shares in issue, there could be a strong case for not selling shares at the Tender price - and for buying more at the current price and waiting for the NewCo's market valuation.

[boadicea] 01/3/2023 09:57

I can see a number of interesting possibilities here. The price action, which is currently 'tending' upwards might give a clue to the outcome. With only the directors committed to accept we could see an external party build a substantial stake at a little over 163p by offering a better exit to otherwise intending acceptors.

Is Numis acquiring shares now?... and are they permitted to offer a premium?

Plenty of 'What ifs', but appears relatively low risk to holders so no early decision from me.

PS:Currently quoted at 162.9p to buy on line. The yellow strip is showing a very wide 160/167p - an attempt to discourage trading?

[jonwig] 01/3/2023 09:18

The accounts, etc. of Tamdown are here:



The latest results issued are to 30/09/21, and they could delay the 2022 results until June, which doesn't help.

A lot of information about Tamdown can obviously be found in Nexus's consolidated figures, but there are currently 4 outstanding registered charges againsty the company.

[pr100] 01/3/2023 09:01

So a shareholder with say 1000 shares today would still own 1,000 shares in the new Tamdown-only Plc if they decided not to subscribe to the Tender Offer?

So what is anyone's guess at the likely market valuation of Tamdown and the share price - given that there will only be around 7.5m shares in issue?

[pr100] 28/2/2023 19:21

What are the options?

[p1nkfish] 28/2/2023 17:43

What to do (?) is the question.

[boadicea] 28/2/2023 17:36

jon - That is probably/possibly what they are hoping - either because it leaves them with the maximum value in the remaining co, or it becomes an attractive t/o target so they can complete their cash-in.

Logically they wouldn't offer more than they needed to. The market has put the price where it is and was presumably not expecting much more. Anyone eager to unload a large position such as would seriously hobble a normal open market may find it attractive. Others may find it distinctly marginal ... or mean.

The interesting speculation is what happens if there is a low take-up and management end up with an overcapitalised company in which they will then hold a rather smaller %age stake than they were expecting.

This story could have legs.

[eezymunny] 28/2/2023 14:59

Such an illogical tender price imo. Wouldn't surprise me if it was voted down.

[jonwig] 28/2/2023 14:42

Wait and see what's to go for after the tender. The earth-mover might start undervalued.