Ocean Wilsons (holdings)... Share Discussion Threads

[varies] 16/6/2023 10:20

Last of the Mohicans
Thank you for devising an ingenious solution.
If an attractive offer has been made for OCN's shares in Wilson Sons, then I am sure that S & T are busy consulting their accountants. They will naturally put their own interests first and, as minority shareholders, we can only hope for the best.
We have enjoyed good dividends these last years to console us for a disappointing share price.

[last of the mohicans] 16/6/2023 09:23

It would appear that the figures being mentioned this time round are probably more attractive than those indicated the last time round.

If you think about it this way each OCN share owns 7 shares in Wilson & Sons.

They may want to structure any deal so that any tax implications are passed on to the shareholder rather than OCN being liable for them.

They may also want to spread the receipts out over several years rather than in just one.

As an example, they could issue everyone with 1 free B share for every OCN share that they own. With each B share owning 7 Wilson & Sons shares. The owner then has the right to sell the B share annual at there discretion until 2026 when they will be automatically redeemed by the purchaser. All the voting rights would go in advance to the purchaser so they control Wilson & Sons. The sale price received when redeeming your B share is the agreed purchase price.

Thus if the agreed price is 20 Real per share, then when you redeem your B share you'll get 140 Real for it, be that in 2023, 2024, 2025 or 2026. The only variable will be the exchange rate between the Real & the £ or $ depending on the currency you select to receive the payment in.

Or they do a hybrid version, where OCN themselves retain say 50% of the B shares, so that they will retain half of the proceeds within the company & the other half of the proceeds goes directly to the existing OCN shareholders.

LOTM

[baronetbill] 16/6/2023 08:57

Varies
Indeed been following OCN since I was a young man...LOL
Flying a kite really, but times are changing and just maybe OCN is finally going to join the mega league of global port operators; IF the price is right which IMO is considerably more than what pertains today.

[extrader] 16/6/2023 08:43

Has anything changed on the tax front in the 4-5 years since S and T last explored this topic?
If they didn't pursue it then because of unfavourable tax issues, that problem persists.
The macro environment is less certain, Brazil's politics more challenging, they're both 5 years older and possible changes in personal/family circs may prompt a re-visit.
If MSC comes in with a sufficiently attractive offer, who knows?
In any event, it's highlighted the deep value available here.

[varies] 16/6/2023 08:19

baronetbill
It sounds as if you and I may be among the oldest shareholders on this thread. I have owned my shares in OCN since the 1970s !
Your suggestion of a reverse takeover has attractions but I do not think that Business Relief from Inheritance Tax would be available for shares listed in Brazil as well as on AIM.
Messrs Salomon and Townsend would lose control. I believe that their shares in OCN and Hansa may qualify as Business Assets for IHT as long as they maintain control but I am not at all sure about this and, as I said in my recent post, their decisions are likely to be strongly influenced by the implications for tax.

[baronetbill] 15/6/2023 15:23

Piedro
Thanks for the thought; alas the last baronet was created for Margaret Thatcher's husband, Denys, and its most unlikely another will ever be created.

[piedro] 15/6/2023 14:57

I'd give you a baronet Bill if I had one.

[baronetbill] 15/6/2023 13:53

I have followed OCN when its brokers were the superb L.Messel...around the early 1980s

Call me a fool
Wilson [PORTS] 57% owned and listed in Brazil should do a reverse takeover of OCN offering shares to the value of 20 pounds with a cash alternative.
Wilson Ports should then apply for a secondary AIM listing in London thereby after 2 years long-term holders will be exempt from inheritance tax.

[extrader] 14/6/2023 21:36

The 'cosiest' of arrangements can be revisited if the arguments for upending them are compelling!

[flyfisher] 14/6/2023 20:55

Current sotp valuation with PORT3 at 12.6 real and an unchanged investment portfolio comes to £21.14 p/s.
Current discount 56%.

Should a transaction for OCN's holding in PORT3 arise at the suggested 5bn real level, then a sotp valuation would come to £29.74 p/s, less any taxes.

However, will it happen?

[extrader] 14/6/2023 11:31

Hi jane deer,

Thanks for the family info. The other bits were easier to find!

Name of holder Number of shares % Held
Hansa Investment Company Limited 9,352,770 26.45
Victualia Limited Partnership 4,435,064 12.54
Mr Christopher Townsend 4,040,000 11.42
City of London Inv. Mgt Company 1,745,361 4.94
ICM Limited 1,167,762 3.30

The Company has been advised that Mr Salomon has an interest in 4,435,064 shares registered in the name of Victualia Limited Partnership.

The Company has also been advised that Mr Salomon has an interest in 27.9% and Mr
Townsend an interest in 25.9% of the voting shares of Hansa Investment Company Limited.

I was interested to see well-regarded CLIG as the major outsider here.

....and, from the Investors section of the website some provisions against hostile takeover

COMPULSORY TRANSFER OF SHARES
In 2008 the Financial Services Authority acting in its capacity as United Kingdom Listing Authority agreed to permit a new power for the Board to intervene if any new holding of 5% or more of the shares of the Company emerge. This was to reduce the holding, if necessary, through a compulsory sale and transfer, to below 5% of the Shares.

Cosy! As you say, minority shareholders are completely in their hands.

ATB

[cousinit] 14/6/2023 11:30

OCN is offshore and Hansa moved offshore a few years ago (citing less stable UK regime). I'm not sure if there was a tax planning angle in there somewhere for the major holders

[jane deer] 14/6/2023 11:04

Varies
Interesting post. I think WS is 65 and CT is 49. I believe CT is WS’s nephew - but I may be mistaken. Tax optimisation for a 49 year old is important but inheritance tax considerations probably seem a long way off.

As you say CT and WS own over half the voting shares in Hansa, together with Hansa they have over half the shares in OCN and OCN has over half the shares in Wilson Sons. So as a minority shareholder, we are completely in WS and CT’s hands.

[varies] 14/6/2023 10:28

Refreshing my memory from the latest annual report I see that Mr William Salomon and Mr Christopher Townsend still control OCN. I believe that WS is the son of the late Walter Salomon and CT is either William's brother-in-law or his nephew; I may be a generation out.
WS and CT own between them more than half the voting shares in Hansa Investment Co which owns 26.75% of OCN's shares. WS "has an interest" in Victualia which owns 12.54% and CT owns 11.42%. These 3 holdings add up to 50.71%.
WS and CT each received $91,000 in director's fees in 2022 and they will also have benefited from the fees paid to Hanseatic Asset Management.

These are factors which they will consider in deciding on the future of OCN and whether OCN should dispose of its interest in Wilson Sons but I believe it is the tax implications that will carry most weight with them.
Would OCN be liable for a large liability to tax on a sale of its stake in Wilson Sons and would this be mitigated by the investment of the proceeds in funds similar to those already held ?
If OCN proceeded on these lines, it would in effect become an investment trust and the directors could continue to derive substantial benefits. Furthermore WS and CT's interests in OCN would presumably count as business assets for Inheritance Tax whereas cash received on a liquidation would not.
So I do not think we shall see a liquidation of OCN.

[flyfisher] 14/6/2023 09:20

Extrader, thanks for the links.

[extrader] 14/6/2023 07:38

Suggestion that MSC may be looking only at OCN's stake :

hxxps://www.infomoney.com.br/mercados/wilson-sons-port3-controlador-confirma-que-avalia-venda-de-investimentos-na-companhia-desempenho-acoes/

Googletranslate :

"According to a report by Bradesco BBI*, MSC is reportedly negotiating the purchase of 57% of Wilson Sons in a transaction of approximately R$ 5 billion or R$ 8.8 billion for 100%.

Bradesco BBI commented that assuming the amount of R$ 8.8 billion-R$ 11.3 billion as equity and company shares to establish the price range, this change of control may result in a tag-along price of R$ 19.90 to R$ 25.60 per share of Wilson Sons, resulting in a possible increase of 90% to 144% over the closing price of last Friday.."

*Bradesco BBI is the investment banking arm of Bradesco Group , 3rd largest bank in Lat Am, for context, in market cap. a little below Barclays.

A previous strategic review, 5 years ago, included this :
hxxps://exame.com/negocios/wilson-sons-vai-avaliar-venda-de-ativos-e-parceria-estrategica/

The board of directors of Wilson Sons approved Monday the beginning of the evaluation process of its investments in container terminal and logistics assets, the company said in a material fact.
"The process is part of the evaluation of strategic alternatives that is being carried out by the company's board of directors, which may include the disposal of the referred assets, as well as the attraction of strategic partners," Wilson Sons said."


Then, as now, we're reminded that ' no decision has been taken and there is no certainty that any transaction will occur'.

[extrader] 13/6/2023 11:09

"And much as Wine has play'd the Infidel,
And robb'd me of my Robe of Honor -- well,
I often wonder what the Vintners buy
One half so precious as the Goods they sell."

The Rubaiyat of Omar Khayyam, by Omar Khayyam / Translated by Edward FitzGerald

Apart from sentiment (do you want to be the one who turns your back on 200 years of family history?), there's also 'replacement risk' : are you confident that you can put the proceeds to 'better' use?

Must be a 'nice problem' to have, though!

;->

[dozey3] 13/6/2023 10:01

Extrader- “might be”? They should bite their hands off.

[extrader] 13/6/2023 08:36

The O Globo snippet re (in)formal proposals was short on detail, not making it clear whether the mooted Rs 5 billion was 'outright sale' or 'implied value'.

The earlier corporate activity by MSC in Brazil was to acquire a controlling interest, whilst maintaining a public listing. Possibly because of the target's 'strategic' nature?

.."MSC asked Brazil's competition regulator, the Administrative Council for Economic Defense (CADE), for permission to purchase up to 67 % of Log-In's shares.

The acquisition would happen through a public offer process, and MSC said at the time that it would tender an initial offering price of $4.73 per share - a 67% premium over Log-In's share price..."

An opportunity for the Salomons to monetise a serious %age of their Wilson Sons stake at a 'realistic' aka full valuation might be too good to pass up.

[flyfisher] 13/6/2023 06:14

''The Company has not received any formal proposals.''

Generally means they have received informal proposals.

[extrader] 12/6/2023 22:12

My 1493.

The MCS story may have some legs : they earlier made another, smaller (Rs 1 Bn) acquisition of another Brazilian logistics firm
hxxps://www.seatrade-maritime.com/containers/log-logistica-accept-msc-takeover-offer

also (coincidentally ?) at a 67% premium to the s/p....

and presumably on the same (growth prospects) rationale.

[dozey3] 12/6/2023 17:22

Let us hope the penny has dropped with today’s rise, and the directors realise the market dislikes and hence undervalues the present overly complicated structure. If the takeover of Wilson’s doesn’t come off then just SPLIT the company for a 30% plus upvalue. IMO.

[royaloak] 12/6/2023 15:02

Not sure what difference it will make but it looks to me that Brasilian Real will continue to strengthen against the £.

[extrader] 12/6/2023 14:25

The other acquisition :

In December 2021, MSC is offering at least 5.7 billion euros for Bolloré Africa Logistics, a subsidiary of the Bolloré group. In December 2022, it was announced MSC had completed the acquisition of Bolloré Africa Logistics.

Seems to be a company in a hurry.

[jimmywilson612] 12/6/2023 13:28

MSC, a Swiss company specializing in maritime transport, is negotiating the purchase of Brazil's Wilson Sons, one of the country's longest-running companies, founded almost 200 years ago.
This is a transaction of about R$ 5 billion. If it closes, it will be MSC's second acquisition of a national company in a year

Source; hxxps://oglobo.globo.com/blogs/lauro-jardim/post/2023/06/empresa-suica-de-navegacao-negocia-a-compra-de-companhia-brasileira-em-transacao-bilionaria.ghtml

£5BN Brazilian Real = £816M for the business. OCN Owns circa 57% = £465M. Market Cap = £320M

So the rumored offer is above OCN current market Cap without its investments of circa $290M/£233M thrown in.

If the offer goes through (big if like) then I put Net Asset Value of circa £700M vs £320M current market cap. Big upside if you ask me.