Pci-pal Share Discussion Threads

[adamb1978] 03/8/2024 19:21

One of the problems here with an offer is that James doesnt own enough equity. At 1.2m shares incl. options, then potentially he's looking at say £1.5m - £2m in the event of an offer.

If you then consider that figure in the context of a buyout from a PE fund, the returns for him personally could be far better going private. Some back of the envelope numbers suggests he could make say 3x that over 4-5 years through a LTIP from a fund and successful execution. So bank the £1.5m-£2m now and then say £5m in a few years. Obviously with a larger options package today, then the PE offer becomes less meaningful.

My conversations with them previously suggested that they would feel that 5x ARR would be difficult to turn away, so probably 120p-150p depending on whether they were able to get that valuation based off historic (Jun24) or current (Jun25) (and recognising that it'll take 3 months for a deal to complete).

My personal preference would be for this to run as I feel they're very well positioned for multi-year growth, so am hoping this speculation about an offer is wide of the mark

[sahara5] 03/8/2024 17:15

It is also entirely possible that timings have just slipped a bit and there's nothing to it at all.

[loglorry1] 03/8/2024 14:24

I guess it's a rounding error for Zoom to buy them with their stock. I realise that sounds very rampy but Zoom need a way to monitise their brand and reach while adding services. It's obviously only a very tiny part of Zoom's business now but so were maps when Google bought a maps business to bolt on.

[simon gordon] 03/8/2024 14:18

Yousif,

Cheers, and good luck with trading Cable. Don't do currencies myself, only small caps.

Whatever happens next week, here's hoping it is positive.

[yousif] 03/8/2024 13:12

Simon

Thank you.

Most of the money, in my opinion, can be made in Forex Market.
I usually do one pair only and that is GBP/USD. Of course, everything depending on leverage and the more the leverage the more is the gain/loss.

I hope have answered your question.

[simon gordon] 03/8/2024 12:54

Yousif,

You've got a sixth sense because the chart in July has played out that something was brewing. Then the delayed TU.

What's your favourite share currently? :-)

[yousif] 03/8/2024 12:38

Adam:
Can I refer you back to my post 1103 of 27th June?
I have no inside information but just a feeling of something was/is going on.

I usually attend most of the companies' AGM that I invest in. It is important for me to read into the personality of the directors as this would help me in predicting more accurately the future of the business.

During the last PCIP' AGM, I had conversation with the CEO regarding the valuation of the company especially following the approach by sycurio.

The company's directors thought at the time of approach that the company worth around £1.20 per share. This of course without including the premium that should be added first for the approach and second for the future prospect of the business.

I am sure will have an update from the company sometimes next week and then put all the above speculations to rest.

[hastings] 03/8/2024 12:12

Cheers, appreciate the thoughts.

[sahara5] 03/8/2024 12:02

I think something around 6x ARR would be a fair takeout price given where we are and the state of UK markets. So, something around 120p would be my guess.

[simon gordon] 03/8/2024 11:36

Seemingly, Livingbridge paid £110m for Sycurio (Semafone) an inferior company to PCIP. That was in 2021 when the markets were riding high.

Fully diluted there are c.80m shares.

£80m = 100p

£90m = 113p

£100m = 125p

£110m = 137p

£120m = 150p

I'd guess 120p at the maximum. Then again, Livingbridge could be desperate to get hold of PCIP and pay 137p.

[hastings] 03/8/2024 11:10

Hi Simon, interesting.So, hypothetically if we are looking at a serious approach, would you care to speculate on an indicative price that may be considered!

[simon gordon] 03/8/2024 11:02

Afternoon Hastings,

If PCIP has received an offer, it must be serious because the 22 & 23 offers which eventually went to 90p, didn't even become public knowledge or cause any uncertainty.

[hastings] 03/8/2024 07:54

All a bit bizarre I think.Would assume that anything on the financials would have to be flagged immediately, so I'm also discounting that.Particularly as we know that last Wednesday was lined up for the update, so I'd assume everything was ready to go. We haven't seen a delay of a day or two, but clearly longer as there is, as far as I am aware, no clear time yet in place.So, I'm also leaning towards something emerging late in the day, which for me points to a party expressing an interest, resulting in talks now in play.Possibly reading it wrong, but it would certainly make sense and no doubt we will know one way or another soon enough now.

[simon gordon] 03/8/2024 06:47

Morning Adam,

Like you, I can't see it being about M&A, especially with the CFO transition.

Does an audit begin a couple of weeks after the year's end? Could the Interim CFO be clarifying the headline figures so they don't come up differently against the audit?

In 2020, they had a trading update out on 7th July. I'm pretty sure that William Good would have teed everything up for the Interim CFO. So the odds of it being something to do with the figures seem fairly low.

[adamb1978] 03/8/2024 01:51

Hi Simon

I also considered whether your point A would be the explanation however two problems: (1) the TU wouldnt be audited so their auditor wouldnt be involved and (2) the new CFO doesnt start til October. So anything fraudulent or wrong with their figures can be ruled out.

There's then a bunch of things which would just be announced as and when rather than delaying a trading update - appointment of NED, new contract, change of broker etc. So those arent the reason.

There also things which are price sensitive so get announced asap irrespective of results. So litigation, fraud, CEO ill health etc...so we can rule out those delaying the results.

Therefore the delay would be due to something which PCIP can see being imminent and which they would like to announce at the same time as the figures. There's not many things in that category - perhaps a material acquisition (particularly if an equity raising was going to fund it) or they've received an approach.

I dont think they're on the M&A trail at the moment and to move from the litigation being settled to announcing an acquisition now would be rapid.

Therefore my money is, unfortunately, that someone has come knocking with an offer and they're trying to agree terms which the board could recommend.

I really, really hope that there is another (positive or neutral) explanation, but I'm struggling to think of what those are....

Adam

[simon gordon] 02/8/2024 17:01

Feels a bit binary now:

A. Interim CFO and auditor have found something and are ironing out the headline figures.

B. Takeover offer being discussed amongst large shareholders.

You'd expect that William Good would have handed over all the TU figures when he left July 15. They've only missed a July TU once and that was waiting for the trial result in 23.

Has Sycurio returned with a knockout offer - 110p/120p, with lots of inducements for PCIP's top management team?

[sebass] 01/8/2024 17:43

CGT Potential increase is making a lot of business owners think twice about selling

[simon gordon] 01/8/2024 17:17

sahara,

Fair point.

There's been some chunky buys this week.

40,000
25,000
25,000
55,000
100,000
25,000
20,997

There's been little chunky selling.

[sahara5] 01/8/2024 16:50

I'm also not sure about the CFO appointment meaning no takeover offer.

They said mid July for a TU just a few weeks ago, so if there is interest then it's very recent.

[adamb1978] 01/8/2024 16:49

Hi SimonI find it hard to see that it would be a bolt on acquisition as they've had minimal time since the litigation was settled so wouldn't have any certainty on funding etc til that was resolved. I also can't see an offer succeeding whilst the price is lingering here as lots would want way in excess of the market price to sell. Struggling for many explanations though....Adam

[sahara5] 01/8/2024 16:44

Re a possible takeover: at least we know the big holders are firm that this won't be sold without a significant premium. They already rejected 90p from Sycurio/Livingbridge.

[simon gordon] 01/8/2024 15:20

Hi Adam,

Share price action has been interesting in July. There was some two-way with plenty available on the offer. The price is in a stasis waiting for news. I thought it was waiting for the TU but maybe more is brewing behind the scenes.

I'm sort of discounting the idea of a takeover offer because they've just hired a new CFO who starts in October.

Making a bolt-on acquisition whilst in between CFOs would be odd.

[adamb1978] 01/8/2024 14:41

The delay is confusing. I had been told mid - late July. Agree that it appears as though they're trying to synch it with something else but there's only a very very smallNumber of things which that could be. Really hope that someone hasn't made an offer for the companyOne comfort that everyone can take is that at least the performance is in line with expectations, otherwise they wouldn't be able to delay

[hastings] 01/8/2024 07:31

Still waiting for a date to speak with management and I echo Simon's post on yesterday as it having being pencilled in for yesterday.

For whatever reason that wasn't firmed up and as far as I am aware there is still no confirmed date.
It could be, as Dr B has suggested, something and nothing, although as another day ticks on I also wonder if they are waiting to align something within the release.

I'll post again if I get confirmation on a date to speak with management, which should coincide with the forthcoming update.

[dr biotech] 31/7/2024 07:14

Did they say which Wednesday 😀

The optimist inside me is they are delaying to announce a significant update. Reality is they probably just aren’t all that bothered about meeting a fairly arbitrary date