Orchard Funding Share Discussion Threads

[konradpuss] 18/4/2024 20:31

I think it will be at 50p

Shall we have a bet?

[valueman94] 18/4/2024 19:26

I appreciate your reply. Basing a low offer on the ‘feelings̵7; of two multimillion asset companies isn’t a strong argument for a valuation of a business.
Using financial metrics is what drives rational financial decisions (which I’m sure the asset management follow otherwise they would be out of business) . Selling for less than a liquid NAV and such a low p/e (a point that has gone missed so far). The company looks like it’s going to earn close to 2m for the year. This company is worth more than 3 times earnings. If you want to Ignore NAV. A profitable company should be selling around a 5-10 P/E ratio.

[topvest] 18/4/2024 19:12

Fair point, but their hand is not strong. I suspect Gresham House and Chelverton are fed up with this and will want to get out at something reasonable before it delists. What that price is will drive the tender.

[valueman94] 18/4/2024 18:59

You seems to keep dodging the question. Why would someone sell 80p worth of assets for 30p? You Call it optimistic. I call it the reality of the situation.

[topvest] 18/4/2024 18:53

LOL - super otimistic!
It's not an offer. It's a tender. No chance of that price unless we get a bid from a third party.
Would Close Brothers make a bid when the FCA is hovering?
Very unlikely in my view.
Its not really worth book value - look at the banks. Virtually none of them trade at book value because their ROEs are lower than their cost of capital.
Half of book value would be a good outcome.

[valueman94] 18/4/2024 18:34

Offer price can’t be less than the share price from the past 12 months. Which is 44p. So that’s the absolute least. Plus a share appreciation for the fact it’s being taken over. I don’t think 80p is unrealistic.

[topvest] 18/4/2024 18:20

I suspect Gresham House and Chelverton will drive the tender price. Maybe a 30p (pessimistic) or 50p (optimistic) outcome. Lets see what happens.

[valueman94] 18/4/2024 18:17

Why are you assuming people are willing to such a low tender offer?

[konradpuss] 18/4/2024 17:27

top you are correct 75%. I was wrong. I think on that basis your take on it makes more sense than mine.

I still would not want to be in the 25% camp if it goes private with Peter/Ravi with 75%.

[topvest] 18/4/2024 16:59

I don't believe an offer will be forthcoming. He needs 75% to delist the company. I think the Board will undertake a partial tender offer, as they have alluded to. They will then likely delist with over 75% owned by Ravi and some minority holders that don't take the tender. He can then make an offer to the others, if he feels like it in 2 or 3 years time. Just my take on it.

[valueman94] 18/4/2024 14:34

Ravi wants the whole company so he will want a 90% approval vote.

[konradpuss] 18/4/2024 13:57

To take a public company private I believe you only need over 50% of the vote.

So Ravi could put that to a vote along with a low offer.

I would be very cautious of going in deeper here. I do not trust Ravi to play fair.

[valueman94] 18/4/2024 13:04

Peter,

Any offer will have to go through to a vote. From the feedback I currently has so far. A takeover offer lower than NAV is seriously unlikely.

[orchardholder] 18/4/2024 11:06

@valueman94: I also own 1.5% of the shares - let's get in touch (I have also reached out to you via a direct message)

I still consider increasing my position, but the liquidity continues to be quite low

[konradpuss] 18/4/2024 08:42

Speculation?

Good old Peter, I will miss him when he errrh! Ravi takes this 'ship' private.

[97peter] 18/4/2024 08:33

Supposition.

[muffster] 17/4/2024 22:40

Thanks Ravi

[cwa1] 17/4/2024 22:23

Superstition??

[97peter] 17/4/2024 22:16

All - This is all superstition! The review outcome maybe status quo? If Ravi who owns over 49% could say tight I want to buy out all and take company private could offer 35p and do that! Or stay as is and take the company forward to bigger and better pastures with his LendXP SaaS and collaborate with Aviva and DirectLine as LendXP SaaS is brilliant!!

[konradpuss] 17/4/2024 19:08

top, as I have already set out here Ravi can take the company private with very little cash of his own. O.K. my figures need a little update as I was using a historic cash balance figure. He can, as you say, manage the business into any offer to increase the cash at the company.

I think he will have to pitch any offer so that he does not get a minority bunch of 'ruckers' that constantly give him grief.

My guess is that the funds you mention might not be able to hold stock in unquoted companies.

[topvest] 17/4/2024 18:50

Yes, can't remember what the timeline is?

[davidosh] 17/4/2024 15:18

Ravi cannot buy shares without notifying the market though

[topvest] 17/4/2024 15:10

It's certainly edging up nicely. I suppose Gresham House and Chelverton will have the biggest say here. It looks like Ravi maybe taking on the small sales in the market, what do others think? Really Ravi should do the right thing and make an offer for the company, but I suspect that he doesn't have sufficient liquidity.

In which case he will nibble at the small holders and then the board will do a buy-back at whatever price is agreed with Gresham House and Chelverton. That way Ravi still gets most or all of the company back.

Given that growth in the loan book has probably turned negative in H2 then cash will start accumulating in the company. The lack of dividend also helps. They also have c£7m of unused facilities which is more than enough to take out all minority shareholders.

It won't be book value, but I could see 30-50p as possible. I will await developments for now. It may take several months I suspect.

[konradpuss] 16/4/2024 21:19

Logic would say if you bought much higher you should have averaged down. I could not do it as I just do not trust the management.

I am hopeful of still getting my money back.

[eeza] 16/4/2024 21:02

Poor BB sold before the rise, I think