Plus Markets Group Share Discussion Threads

[harry f] 25/10/2012 17:41

i'll add a little more commentary related to #4021 but won't incorporate it into the post because unlike #4021 it's speculative and i dont want to cloud a factual post which is already lengthy.

the view of ts i had in #4021 may have been unexplained with regards how it constitutes group assets and how the sale of sx affected it.

first of all i think its clear to say that the main beneficiary in the group of the sx sale was ts as it acquired the icap-sx contract. the £1 payable to sx, later increased to £500k due to shareholder pressure i dont believe comes close.

now i assumed in #4021 that dx was unaffected by the sale of sx, but im now unsure if this is the case. remember the bid of £1.25m (was it for 80% of the company or the whole? i cant remember) back in late 2011 which was rejected. then from the accounts another £400k was put into dx. at the agm in june our cfo at the time told us one person was employed in dx. so how did this end up being sold for £10k?

i'm wondering about the following, bear with me because it's quite complex. in the accounts it mentioned the em masse asset transfers from sx to ts to enable ts to operate as a standalone entity, but we dont know after these transfers if sx and dx individually could operate as standalone entities.

now perhaps dx was valued as high as it was back in 2011 because there were critical support functions in sx (and maybe these were included in the £1.25m?), and when these left sx and moved to ts it could no longer acess these and its value greatly diminished?

for ts and the interlinkage it had with sx i think things appear more profound. from what appeared to be 18-20 employees in sx (excl directors) back in 2011, 8 moved over to ts in early 2012 just after the balance sheet date. as such it must be questioned with this loss of staff and various other assets if sx could operate as a standalone entity. supporting this thought is the fact that icap along with the sx purchase agreed to the additional ts contract for technology services, which may well have rendered sx useless in isolation if it was excluded.

so in summary, during the fsp each of dx and ts were something at that moment in time. ts definitely changed profoundly after the sx sale and i believe for best open market value to be realised the fsp for this had to be reopened, yet it was not. i'm just wondering now if the same too should have occurred for dx as this may have also changed fundamentally...... after all what else could explain the loss of value?

[squirrel888] 25/10/2012 15:51

Harry - noted, copied and kept in a safe place (off the internet). Let me know when you might need these posts with contained information & I can get them to you any which way - repost, email. Just say the word.

"Anything CAN happen with willing hearts" - it's written and also the universe helps those that believe. Usually only needs THREE hearts with the same direction, intention too. Very powerful.

Let's see......

[old thumper] 25/10/2012 15:37

Harry,

I think the comments and particularly your summaries of what's has happened in Plus on this BB needs to be brought to the attention of the FSA.

However in the first place this should be brought to the new board's attention (I'd be amazed they didn't know already) and will show the feelings held by the shareholders.

So has anyone contacted any of the board or Bruce?

If not has anyone got an Email address of any of them?

Does anyone has a good reason why not of pursuing this?

As for the PM angle, I've already done this one on the basis that this could get back to the PM as I'd be amazed this deal wasn't discussed in the meeting in number 10 in Feb 2012, Icap saved SX for the nation. So any bad press could get back to the PM and as we know "Anything CAN happen" (Squirrel 4020)

[harry f] 25/10/2012 14:51

squirrel - i remember you once said #3314 was all anyone needed to know.

imo correct at the time but just add #4021 to the list now.

[harry f] 25/10/2012 14:46

thanks for your comments thumper. i'll summarise/ add in a bit more first and then incorporate your post starting off loosely and then building up. rambles on a bit and maybe duplicates but just wanted to get it all down.

at the commencement of the fsp from the publically available information plus had a particular market value. we found out that we had a £1.25m offer for dx in late 2011 which was rejected (so natural to assume it was worth more!), and assumed the bulk of the value lay in the rie licence (as it apparently costs £4m to apply for one without guaranteed success), while ts appeared to be a fair amount of development with nothing to show for it.

then there are other things such as the £30m+ of accumulated tax losses, potentially worth up to £8.5m-£9.0m? at the corporation tax rate.

we know all this. we also know the stated aim of the board was effectively to "open things up" to external parties to maximise shareholder value.

at the conclusion of the fsp apparently no disclosed bids were made either for the business as a whole or any constituent part, as we know the agreement with icap came 4 days later. if i may say so, considering the time the fsp had taken (over 3 months), a very short period for completing due diligence etc to complete the deal.

now with the icap agreement to purchase sx everybody needs to consider the following, which is:

if the bid for sx was made in isolation, for that, and for that only, and the purchase did not impact either ts or dx monetarily in either a favourable or adverse way there would probably be no issue with the events further down the line. why? because the directors and indeed wyvern would appreciate there was no discernable change to the status of either dx or ts. in this situation there would be no point in reopening the fsp, purely because theyve tried to sell dx and ts for 3 months, couldnt apparently find a buyer, and the sale of sx doesnt impact their status. in summary if they couldnt sell them before and nothing has changed there is no reason to believe someone is interested now.

i'm sure we all get that.

as we are well aware however that did not occur, so what did?

as we know icap came along after the closure of the fsp and agreed consideration for sx, however this consideration "to the group" was not limited solely the £1 they offered which was disclosed to us at the time, or indeed the extra £500k which was disclosed at a later date. why not?

simply because the total consideration payable to the group was both of the above AND the extra contract between icap and ts to provide services. that was the total group consideration.

now one may argue that the sx - icap deal may have been completed along with the agreement on 18th may or may perhaps been completed at anytime up until our directors sold ts on the 15th june when they announced the contract along with the ts sale. either way i cant see how it makes much difference as directly or indirectly it constitutes an asset to the group.

a simple example would be assuming ts was not separate and was still part of sx, under that scenario the contract would be within sx and this would go to the shareholders. personally i see it as nothing more than a form of cross subsidization, sx is sold for a pittance £1, with the major benefit arising from this being realised by ts (the contract).

for what it's worth i would expect the icap - ts contract would have been agreed at the time of sale.

now dx doesnt appear to change at all, it remains post icap deal as it was pre icap deal, therefore there's no point in reopening the fsp for this. i totally appreciate this.

however for ts things are completely different. something existed which was apparently as good as worthless and attracted no external bidders and all of a sudden it has this million? multi million? pound contract arranged with icap.

with this profound change of status it's common sense that for shareholder value to be maximised the fsp for ts needs to be reopened, otherwise how else can this be achieved?

it appears very strange that the board overlooked this, and more to the point what were wyvern doing? if they were instructed in general accordance to the rns at the start of the fsp, i.e "to maximise shareholder value" then is not reopening the fsp for ts contradicting this? or was it a case that the directors at the time overuled them?

widening the argument in this respect, i'll incorporate your comments thumper. the directors/ wyvern attempted to sell sx and dx on the open market including external companies and the initial price realised (and recommended) was £1, at a later date dx (without wyvern's involvement) was sold for £10k. but for the ts which in actaul fact realised the greatest potential consideration for shareholders of them all at £281k was never offered to the market (external companies) in the form in which it was sold (incl icap contract) as the fsp had closed.

as such how can anybody (directors or wyvern alike) even attempt to claim/ defend that the maximum shareholder value was realised?


in summary for ts i see things like this, and as it is derived from historical evidence i believe it must be correct?

1) contrary to the disclosed remit of maximising shareholder value, this appears not to have been the case for ts. i can't see how anybody could disagree as ts in the form it was sold "internally" appears to be far removed from that offered to external bidders.

2) the ts contract value with icap was never disclosed prior to the forum sale. the question must be asked "why not?" when the directors knew this was a major asset of the group at the time.

3) the sale was made to a related party, and consultant to the business without a shareholder vote.

4) dependent upon future events at the time (yes/ no to sx sale) it's possible that ts could constitute a lot, if not all remaining shareholders funds, and could have breached "class rules".

5) on the next working day after the ts sale was announced the major shareholders were asked by the directors to vote on either a bad decision "sell sx to icap" or a very bad decision "dont sell sx to icap". to preserve what was left remaining of shareholder value they had little or no choice but to sell sx to icap, with a direct benificiary of this being the related parties mentioned above. the major shareholders wanted to fund the business but were told it was too late, and sx was likely to close 3/4 days later if the sale was not agreed.

6) it has been publically disclosed that a materially higher offer for the whole business was submitted at an earlier date by markab and was refused, as were earlier offers of funding from amari which were apparently frustrated.

7) although earlier resolutions were put forward by the board back in the agm of 2011 to enable additional funding, it must be questionable if when considering prescribed rules if special resolution 8 in particular was a genuine attempt, after all it diluted existing pre emption rights without any obvious benefit or explanation. special resolution 7 is also questionable as with no commensurate modification to the nominal value of the shares was it credible? who would they sell 5p shares to with the market value share price at 2p and on a downward path?

8) in addition to point 7 above, the directors appreciated that with special resultions 7 and 8 being "thrown out" back on 2011, the business was running out of cash. rather than remedying this quickly in the form of alternative proposals (perhaps through an egm?) which would be more aligned to shareholder interests, this appears to have been never proposed/ pursued. again it must be questionable if there was ever any real intent to raise additional capital?


i think the above is a very powerful argument, even in isolation, and one if unnoticed before (which i doubt), surely cannot be now. there is a lot more, some of which is relevant, some perhaps not, and not all disclosed on this board for senitivity reasons. but even as a standlone argument in isolation, what else do we need to establish? i think nothing. how can it possibly be defended?

i'm not sure if the PM is the answer thumper, but the first 2 options definitely are.

[squirrel888] 25/10/2012 14:45

I've had an enlightening phone call today which has put my mind at rest (nothing to do with pmk/stocks) BUT it just gave me faith in the addage "Anything CAN happen"

Talk about the removal of obstacles - amazing!

1p would just be the beginning imo OT - just the beginning.

[old thumper] 25/10/2012 13:25

I see Mr Harris and Strang had a nice little purchase yesterday in 3dd at 0.03p and now trading at 0.15p = 5 times.

So roll on the Plus EGM where hopefully if they purchase a few, perhaps some of the balence of the Close sale now sitting quietly in the MM's books, will prompt a rise in the share price

5 times will get us back to 1p, but perhaps thats just a dream.

[old thumper] 25/10/2012 11:33

Harry,

From your post there are three ways to deal with this, that as TS was sold for more than the other two parts, SX £1 and DX £10,000 and internal redistribution of assets to TS, the sale of TS should had put to the shareholders for approval, therefore this should be considered by the FSA or the LSE/AIM regualation team,



Or the current Board, but I'd be amazed if they weren't aware of this.

Or dealing with this whole matter the opposite way, contact the PM, and suggest that given time this will get back to him. No doubt one phone call to Icap will reconsider the whole matter and will pacify the deal.

[harry f] 25/10/2012 10:41

a lot to consider here and to get your head around but look at what happened, along with my thoughts and tell me what you think. you'll have seen a lot of the earlier stuff before but later you'll get my point.

on the 3rd feb they started the fsp to sell the company as a whole or in parts. after the changes (asset transfers etc) made in january later disclosed in the accounts as late as 6th june, shareholders had little visibility of what each individual company consisted of. it appears that a lot moved from sx to ts and even when it was disclosed there was no mention of any monetary value contrary to accounting standards.

now if shareholders had no idea what ts was at the time because the board didnt tell us, what makes you or anybody else think that they'd disclose this to prospective buyers? i cant see why they would. so did a buyer know what they were offering? i think not. so how could there be any offers for ts in isolation? i cant see how there could have been. why would somebody offer to buy something when the publically available information says there's little or nothing there?

then on 14th may the fsp is closed, not just for the whole but for each constituent part.

on the 18th may and also on the 31st may we are told to accept the £1 offer from icap. on these 2 occasions at the time (and if you had voted then) when they asked shareholders to make this decision they board knew beyond all doubt that they were asking us to make a decision to sell when we did not know what we were selling. we knew it was called sx but didnt know of the asset transfers from sx to ts which were only disclosed on 6th june.

so why regurgitate this? well, because it's very relevant to ts.

as i stated above, during the fsp prior to the icap tie up ts appeared to be little or nothing so why would anybody bid for it?

yet at some time after after the icap proposal on the 18th may and before the sale of ts on 15th june they agree to the ts - icap contract.

now the problem here is the following, simply that the value of ts has changed significantly from before.

before in the fsp we had ts which appeared to be little or nothing (going off the information we had) so why would anybody buy it?

and then this changes to ts finally being worth something (due to the icap - ts contract) but the fsp has closed and there are no external buyers.

so with this change in the value of ts, why didnt they reopen the fsp for ts and encourage external bidding?


with all whats gone on here its hard to get a clear view without running things over in your head a lot of times. on first acquaintance here it may appear to an outsider that ts (as it was sold) had previously been through an fsp where what forum bought was the same as the rest of the bidders had turned down, this is clearly not the case, not the case at all.

forum simply bought something that nobody external to the company had the opportunity to purchase.

understand?

[harry f] 25/10/2012 09:49

i hope you enjoy your time in the cayman islands, pjw, lol.

i reckon your starting to get into my way of thinking thumper.

what we have to remember with sx is that the recommendation of the board initially was to sell it for £1, it was only the shareholder pressure which lead to the £500k, it was nothing to do with the board.

i posted #4000 yesterday which i think is a credible argument. however there is a counter argument as i mentioned, and also a bit of preliminary commentary which i think is very relevant. i'll post again soon.

[old thumper] 25/10/2012 09:45

squirrel,

SX, umm! not to sure, probably a favour for he's mate Capt Pasty.

However RIE, YES, YES ,YES they want that as that takes them to the levels to challenge the big boy's.

[squirrel888] 25/10/2012 09:35

Or because they really wanted SX and they also knew that TS would service their needs.

[old thumper] 25/10/2012 09:32

Harry,

You spoke of the Entrepreneur Country sale pitch and that they didn't suggest anyone was interested in TS, it's then strange that Misra just seemed to give up at that point in defeat (I think not!), as there must be other Investment show's where companies try to pick up investors. So it would suggest they got some interested parties in the Entrepreneur Country event, however not announced.

Also I previously said the Icap raised the SX purchase price to £500k to cover the directors pay off's, but perhaps it was to make the SX sale more valuable than TS otherwise it would be embrassing to vote for the sale of a company worth £1 whilst a company worth £251k wasn't even discussed with the shareholders.

[nitaroo] 25/10/2012 09:31

Hm. Starting into the weekend on Thursday morning?!? Must be a real cushy job you have there.
You are not by any chance working at Plus Markets Group?
And just in case: Merry Christmas to all of you!

[squirrel888] 25/10/2012 07:48

PJW - have a good weekend yourself and thank you for all the fantastic links. I must say you are a credit to this thread. You obviously feel we have a future or you wouldn't spend so much time here. I for one, appreciate that.

[pjw1956] 25/10/2012 06:07

Arko Iris, Rachel Maguire is an EX-PLUS girl.

I have picked a couple of things off the Arko news page by Rachel that may be of general interest. I found the "PRICE-SENSITIVE INFORMATION" section of the masterclass most interesting.



Reference manual - Relations with investors

24 September 2012

Rachel Maguire provides a masterclass overview of all the essentials of relations with investors, as published by CCH/Wolters Kluwer.

PRICE-SENSITIVE
INFORMATION
[¶ 100-700 ] Striking a balance
To meet the requirements of the UK Listing Authority
(UKLA), listed companies have an ongoing obligation
to fulfil two aims:
(1) the timely disclosure of all relevant information to
shareholders; and
(2) the equal treatment of all shareholders.
During meetings and briefings, companies need to
strike a balance between being as transparent as
possible about their business, while not giving away
either valuable competitive information, or price
sensitive information that is not in the public domain.
This might include information on a significant change
in a company's financial position or outlook, resignation
or appointment of a senior board member, corporate
activity such as a bid for a third party, or any other
major new development that is likely to lead to a
substantial movement in the price of its shares (see
Disclosure of Price Sensitive Information in the Listing
Rules). The UKLA does not give a precise definition
of 'price sensitive' since a number of factors relating
to a particular case need to be taken into account.
Where uncertainty exists about whether information is
price sensitive or not, companies should seek advice
from their advisers (company broker, lawyers, etc.). In
the event of an inadvertent release of price-sensitive
information in the course of a meeting, listed companies
must notify a Regulatory Information Service (RIS) of
any such event without delay, to ensure the information
is then disseminated to all subscribers (such as major
information vendors) at the same time for onward
transmission to the market. An RIS is a Primary
Information Provider (PIP) service approved by the
Financial Services Authority to disseminate regulatory
information to the market.




----------------------------------------------------------------


Press article - Navigating the shareholder spring

17 October 2012

Arko Iris explains how to navigate the shareholder spring and make the best of shareholder activism - as published in the New Statesman.



Last post of the week, so have a good weekend harry, squirrel, Old Thumper, Daytraders and all holders.

[nitaroo] 24/10/2012 20:47

"... it aligns their interests to ours ..."
Exactly. Gold diggers and free booters, most of us as well!
Cheers.

[harry f] 24/10/2012 18:32

thanks pjw.

our notice of agm is a bit different to theirs with the "options and incentive plans" subsection and this is a way goes back to the pre emption rights subject discussed recently.

when last year our old directors wanted to disapply pre emption rights for 10% of the shares without any reason it was refused, as it should have been.

this time around the rationale to disapply is clearly given i.e. "to incentivise", and i would expect for one of the 10%'s for there to be a future share price threshold 3-5 years down the line far above the current share price in which these can be exercised.

more than anything though it aligns their interests to ours.

[nitaroo] 24/10/2012 17:44

Gold diggers and free booters, all of 'em!
Check it!
Respect.
LOL
$

[pjw1956] 24/10/2012 16:57

3D Diagnostic Imaging plc : Result of EGM



3D Diagnostic Imaging (3DD)
Director name: Mr Hamish Harris
Amount purchased: 40,000,000 @ 0.030p
Value: £12,000

3D Diagnostic Imaging (3DD)
Director name: Mr Donald Strang
Amount purchased: 40,000,000 @ 0.030p
Value: £12,000

[harry f] 24/10/2012 14:43

very contradictory pjw.

the ceo says ts is greatly dimished, while harrop buys it 2 weeks later. hmm.

just changed #4000 a little at the end with the line...

"...or maybe its the lit book funding up to £10m they were asking for?"


its just a right mess. they had the strategic review back in early 2010, disclosed the completed outcome in august and devised 2 subsiduaries in TS and DX. This is from the RNS at the time.

"PLUS Markets' RIE status will be used to extend its product offering and
diversify its revenue streams."

yet at least until the end of 2011, over 16 months later and perhaps beyond there is not a penny of revenue disclosed from either ts or dx to show for it, absolutely nothing.

all they've done is eaten cash while developing something somebody else reaps the benefit for. we have no idea how much cash has gone because while revenue is itemised between operating segments, for admin expenses of almost -£5.5m it appears consolidated:

p38 of the 2011 accounts note 5: "Administrative expenses are not allocated between Capital Markets, Trading Services and Market Data Services. The new activities conducted through PLUS-DX and PLUS-TS did not generate any revenues during 2011. Administrative expenses were allocated: £0.44m to PLUS-DX and £Nil to PLUS-TS."

p48 gives more detail "Historically, PLUS-SX has been charged for contracts that are in the name of other group companies where the services are rendered to the entity. A number of contracts are in the process of being novated post year end as stated in note 22."

[old thumper] 24/10/2012 14:15

Harry + pjw,

I've got to shoot out for a while so i'll pickup the last few posts in the morning.

[pjw1956] 24/10/2012 13:36

Two weeks earlier.

"With the RIE licence leaving the Group, assuming the relevant
FSA approval, the prospects for both PLUS-TS and PLUS-DX are greatly diminished".

Cyril Théret
Chief Executive Officer
1 June 2012

[pjw1956] 24/10/2012 13:17

harry, read the last line. 15 June 2012

In a statement, Misra, non executive chairman of Forum Trading Solutions, said: "We are delighted to provide managed trading services to Plus-SX, enabling its smooth operation going forward, in addition to offering our unique services to other trading venues.

[harry f] 24/10/2012 12:47

just noticed something from the link above..... did we ever know this about ts?

"Customers include the Investment banks, broker dealers, market-makers, private equity funds and hedge funds and other proprietary trading desks."



(edit) - this is from the rns on 7th sept

"PLUS Markets Group plc (the "Group") today announces the establishment of PLUS Trading Solutions Ltd ("PLUS-TS"), an innovative trading platform technology services provider enabling investment banks, brokers and trading venues to establish outsourced matching systems that are designed to be fully compliant with regulatory initiatives."

so are they "customers"?