Pilat Media Global Share Discussion Threads

[smithie6] 16/1/2014 13:11

"GBP31,270,995 is to be funded by the Riverwood Funds., The Riverwood Funds comprise a number of private equity funds "

"which may take the form of ordinary equity, other equity, debt securities or shareholder loans at the Riverwood Funds' discretion"

"already has an equity stake in SintecMedia"


I wonder....

if selling shareholders of PGB....are investing the cash produced into Riverwood !
they would in fact remain shareholders of the combined entity !

by investing in new shares in a co. (Sinntec) they would get tax relief on ALL of the cash invested !!!!....

(if make 1M CGT on selling 2M pnds of shares....but re-invest 2M into Riverwood....then get say 40% tax relief on 2M = 0.8M...so resulting nett CGT is 1-0.8 = 0.2M . 40% of 0.2M = 0.08M

0.08M tax on a CGT of 1M is nothing...8%
compared with 400K tax bill if pay 40% on CGT of 1M, saving 320k CGT bill

and CG of 0.2M can be avoided by investing more money into other 'new' shares in qualifying companies or funds)

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a previous Shore capital co. made use of USA entities for funding....Invu
see news around 2006-9

[yump] 16/1/2014 12:55

I'm getting annoyed now, so lunch beckons.

[smithie6] 16/1/2014 12:52

"but as both companies face growing demand for their products and services and, given their backlogs of work"

"growing demand"

"backlogs of work"

----

"By utilising both parties' products and human capital, the Enlarged Group will be able to strengthen its offering to the market, satisfy existing clients, win new business and ....."
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if such a company listed on NASDAQ there would be a fight to buy shares imo !

[yump] 16/1/2014 12:47

Smithie6

Cynicism isn't, when its reality.

[yump] 16/1/2014 12:46

A bit of a giveaway:

"The Scheme provides certainty of value to Pilat Shareholders through a cash exit at a significant premium to the recent share price."

As in:

"We know there's a substantial number of shareholders who will be pleased to get out at 95p after waiting a long time for the price to recover, so we'll put a modest carrot in front of them and see if they bite."

[smithie6] 16/1/2014 12:45

ah
I wonder if some of the large holders in Pilat are subscribing, or have, for shares in Sintec....

so that they effectively remain shareholders in the new merged entity....

and/or then list Sintec....in the USA....to get a much higher listing price...and if offer shares, to get some cash to pay back the cash used to buy shares in PGB

(cynic, me ?,
Shore Cap. .....slippery customer....)

[yump] 16/1/2014 12:40

I agree. There's nothing in the offer for future growth. Even the Dragon's value businesses a year or so ahead. I'm a bit suspicious that they are taking advantage of quite a few stale shareholders, who will be pleased to exit at 95p and who have lost interest in where the company might be in a couple of years, because of previous hiccups.

I'd love to have been a fly on the wall in discussions between Sintec and Pilat, especially when all that cash would have been the topic.

I suppose a takeover is one way of making sure that the cash stays 'in the family' rather than being given to shareholders.

[smithie6] 16/1/2014 12:39

"Being part of a larger and privately held group is the right next step for the Company and joining forces with the SintecMedia group of companies is a natural choice that will enable the Enlarged Group to continue growing for the benefit of all its stakeholders"

??!!!

but not for stakeholders that sell their shares in the offer !

"is a natural choice that will enable the Enlarged Group to continue growing"

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I can understand if some Israeli shareholders might, or might not !, sell in order to get cash......an exit route for their venture capital investment.....getting on a bit in years....use the cash for enjoying life, take a profit, buy a classic car or two !,
venture capital involves an exit one day...

but I have some concerns about whether all shareholders will sell .....or if the target is to ditch UK shareholders...and leave the co. as private co. with Israeli shareholders

Need 75% to de-list and need 90% to do compulsory purchase.
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offer made before the results are issued.....smells very fishy to me
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I note that posters here talked of 85p value ....6-9 months ago !
worth much more than 95p imo

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imo in 5 years time the years will be worth more.

[smithie6] 16/1/2014 12:30

"The Boards of SintecMedia and Pilat believe that the merger of the SintecMedia and Pilat groups of companies will realise a number of benefits for clients and staff, resulting from the considerable additional scale of the Enlarged Group."

Well, merge the 2 companies then, via an all share merger......

----

..this part is strange imo
"All of the irrevocable commitments,

except

those from Michael Rosenberg, Avi Engel, Martin Blair, Samuel Sattath, Michael Zuckerman, Benjamin Moneta and Ronnie Erlichman contain an undertaking to vote in favour of the resolution at the General Meeting to approve the Payments."

so....all those people (which is large % of the co) might actually vote NO to the resolution !!

[obiterdicta] 16/1/2014 12:14

I'm voting no. This business has got great potential to grow to be a market leader. The last time Sintec tried an offer they were re-buffed. An offer of £1.50 might be worth looking at but I think in 2014 the share price would have achieved 95p on its own steam with a few contract wins.

Given that Sintec have been buying at 27p onwards, then they are only purchasing 50 million shares for just under £50 million pounds, given twelve million is there is cash, they are buying circa £25 million of turnover for a cost to them of £38 million cash plus the written off value of their PGB shares.

Also not particularly happy that £400k of the Company money is being awarded to three Directors for work on the sale, presumably this will not be awarded if the sale does not go through.

[smithie6] 16/1/2014 12:14

btw one that PS got wrong !...he sold out ages ago....and missed a lot of the profit over last few months

[smithie6] 16/1/2014 12:02

My vote ?

is NO !....seriously
------

The offer price imo
- gives no real mark up in the price
- is too a low multiple of earnings after remove cash
- is opportunistic noting that the co. has stated that results are well up and results have not yet been published
- gives no mark up for the future of PGB including streaming, internet TV, advertising via TV, advertising via internet TV, streaming to mobiles/tablets
- is a bargain price.....otherwise the offerer would not be making it
- possibly uses insider information since I think they have board presence at PGB
- ignores contract expansions which have taken place but not revealed to the market since not considered material in their individual right
- ignores that the profitability is rocketing...due to the operational gearing of the co.
(small increase in long term fixed costs but with large increases in turnover and license income-.....so nett profit % increases a lot)

Internet TV, streaming.....now is not the time to get out of it !


imo competing bids may arrive.....such as from USA competitors
- in TV sector
- in internet TV sector, exploding sector
- perhaps from companies like Liberty Media ...with content to manage and stream and sell

and maybe the complete offer does not go thru....and only X people sell up.....the same as the same offerer did in 2009....at around 26p....bet the people that took up that offer dont feel to clever !

[yump] 16/1/2014 10:40

Mattisain2

I'd better just keep an eye on things then and make sure that Selftrade do send me one.

I have a long standing phone broker as well, he reckoned they might do the papers in some sort of company block signing, although he wasn't sure.

[adamb1978] 16/1/2014 10:11

Just had another look at the offer announcement and it makes it clear that this tax could apply. Thinking about it more, given the deal is being executed via a scheme then it wouldnt surprise me if it more likely as well.

Bigger question is whether to sell today at around 90p or wait for the offer to complete and get the 95p. Looking at the timetable, it could be early April by the time we see the cash and therefore I'm probably going to sell today rather than having money tied up/dead for 3 months

[mattisian2] 16/1/2014 10:02

To Yump,
My on line broker sent me the form at the time of the last takeover. It is not just a question of them knowing your nationality, it was a two pager which looked like an official Israeli form. You basically declare that you are not israli, not an isreali company etc. I assume it is sent as part of the offer documents to the broker as custodian of your shares.

[adamb1978] 16/1/2014 09:58

Interesting, thanks Mattisian. Sounds similar to the W8-BEN form which you need to complete for US stocks. As yump implies, they should know your nationality but you still have to complete a paper form for the US so wouldnt surprise me if you have to do the same for Israel

[yump] 16/1/2014 09:54

I've never had one of those. Presumably though some brokers would have records of your nationality already. Perhaps the online ones don't.

[mattisian2] 16/1/2014 09:43

On the withholding tax, the way it worked at the time of the last takeover was that you have to complete a form stating that you are not israeli. If you complete that form (which the broker sent), return to the broker then they can claim to get 100% of the proceeds.
Otherwise there appears to be an israel withholding tax deducted "at source" by the bidding company on payment for the shares, to non Israel domiciled shareholders.

[wjccghcc] 16/1/2014 09:00

25% Israeli withholding tax may be applicable. Anyone know the details?

[techno20] 16/1/2014 08:19

Not had a chance to read in detail, but looks like a done deal. Not overly generous, but similarly not too mean - particularly in comparison to the last offer from Sintec!

Congrats to all, especially those who have stayed the course over the last few years. Taken longer that I'd expected to come good, but well worth the wait.

Techno

[adamb1978] 16/1/2014 08:08

Nice start to the day! Share price was unlikely to get much above 95p in the next year or so and it didn't appear as though the board were willing to dividend out the cash. As good a result as we could have hoped for

[daneswooddynamo] 16/1/2014 07:40

Done and dusted; not a bad 12 month payback

[yump] 16/1/2014 07:29

95p takeover.

I guess that's as good and as quick as the likelihood of a special dividend. Wouldn't have minded seeing what effect the growth was going to have though. Can't be bothered to follow Sintec, but I bet the growth and the cash find a good home (cough!). The board obviously agree.