Quadrise Share Discussion Threads

[jaws6] 31/7/2015 14:12

QP
Agree on both post above. They selling QED on cheap at 131

[quepassa] 31/7/2015 14:06

Put another way, Quintain could create the same shareholder value/market value as the Lone Star offer just by declaring a 5% dividend policy immediately.

If they did so, the share price would undoubtedly in my view quickly rise to NAV, closing the large discount-to-NAV, and investors would start to receive a 5% dividend over the course of a year.

That is effectively the same value to shareholders as the Lone Star offer without the Company being sold.

The Lone Star offer is undervaluing the Company significantly in my view.

ALL IMO. DYOR.
QP

[quepassa] 31/7/2015 11:26

Lone Star have a strong track-record and good/aggressive reputation in hunting out distressed assets or assets which have suffered price dislocation.

When I read carefully the Investment Approach on the Lone Star public web-site which is to seek investments where they can capitalise on dislocation in asset pricing and value opportunities, it makes me wonder whether another type of "trade" buyer wouldn't be a more suitable counterparty for Quintain which is not in a distressed situation. Far from it.

This is a link to Lone Star's investment approach:-



Does Quintain as a fully rehabilitated propco with particularly low gearing naturally fall into these investment parameters? I don't think so.

So just what is the attraction to distressed buyer Lone Star? -I'll tell you. They know a bargain when they see one.

In my opinion, there is great value in Quintain but the share price has been held back by the on-going lack of dividend. That is why there is such a difference/disparity in my view between the share price premium of 22% and the NAV premium of 7%.

One could expect the bid premium to NAV and the bid premium to share price to be roughly the same in a property company takeover situation. Here it is far apart. That is a great value in the Company to a potential buyer.

For a normal propco paying a dividend, the market cap and share price will fluctuate around NAV in a positive market such as now. There would be no large discount to NAV.

From Lone Star's point of view, the historic lack of dividend is highly beneficial- and they are seeking to purchase the Company at a mere 7% premium to NAV because of the very fact that Quintain trades at a such large discount as it pays no dividend.

Lone Star are capitalising in my view not just on Quintain but on the big 15%discount to NAV of the recent share price.

Quintain, according to the words of their recently departed FD at the 2014 AGM when questioned on the topic of timing for resumption of dividend, said perhaps in three years or so.

It seems to me that Quintain would soon in my view be able to throw off a dividend of some 5%pa or so within the next couple of years.

Lone Star will in effect be able to earn back the 7% premium on any purchase of Quintain in dividends rapidly.

This is a highly unsatisfactory deal for shareholders in my opinion.

A 7% premium to NAV is selling the Company far too cheaply in my view.


The question which every shareholder must ask himself is what is a reasonable premium on any offer over NAV of The Company - and not premium over the recent share price which was held back by lack of dividend which was however expected to be resumed in the not too distant future.


ALL IMO> DYOR.
QP

[hisnameisolllie] 31/7/2015 10:17

There has been rumours of a potential takeover bid for Quintain for some time now, and rightly so considering the value there is to be unlocked from the assets held. I believe there will a number of firm who have been watching closely and already done there due diligence over the past year. It may not take too much extradition for another bid to follow.. Also Millennium Partners (further to - Maiken) and Sand Grove Capital Management (£8m I have been told, but I haven't looked into it) buying in, low risk trade for the potential 15-20% upside that may be realised from a further bid..

[r ball] 30/7/2015 21:34

I think there is a good chance of a counter offer. level of acceptances is low and QED now in play.

[maiken] 30/7/2015 16:35

Very interesting to see Millennium Partners declare a stake.If memory serves they are Arbs and have put in nearly £7million at 131.1p so it would appear they think there is something more to go for.

[shaf200] 30/7/2015 16:17

I hope there is higher offer... in my experience the only what the current bidders will increase the offer is if someone else shows any interest... and as pointed it takes time for a company to put together an offer.... they will try and push through the robbery asap...

[quepassa] 30/7/2015 15:39

Excellent response.

The wheels begin to turn slowly.

It would not surprise if certain important investors may already be expressing their displeasure and potential lack of support for the offer to The Board at the low price of the opening salvo.

The Board needs to serve its shareholders better and produce a higher, more convincing offer to win support.



ALL IMO. DYOR.
QP

[maddox] 30/7/2015 15:03

Hi shaf,

There may or not be a counter offer for QED but far too early to say. It is difficult to imagine many FIs being in a position to launch a fully funded counter offer in 24 hours from scratch. Assessing QEDs value, price to pitch, internal governance etc. Also, I doubt that we'd be first to know about it anyway, an informal approach to QED wouldn't require an RNS.

In view of the paltry price it is more likely that some of QEDs investors are suggesting to QED's Board that they look for alternative offers.

QED is effectively 'in-play' with a 131p offer on the table - hardly a knock-out bid IMHO. If there is no counter offer then the Lone Star Cowboys will have bush wacked us.

Regards Maddox

[shaf200] 30/7/2015 13:03

counter offer for QED from potentially where? lack of movement today suggests all done and completed.....

[quepassa] 30/7/2015 07:13

It is clear that the Quintain Board must have been in discussion with Lone Star for some time prior to yesterday's announcement.

Yet no RNS was ever issued to the effect of such discussions and a potential takeover which would have allowed shareholders to make their views known - and which would have allowed the market to form its own views about the true value of Quintain.

Never keen on takeover negotiations which go on behind closed doors which effectively shut shareholders out.

There is no way that big ticket and institutional shareholders should in my view roll over at the first shot and accept the low initial offer which has been tabled by deep-pocketed Lone Star.

A 7% premium over NAV is just too low.

It is interesting to look to the long drawn out and protracted battle by Songbird with the Qataris to increase the initial offer.

Shareholders would , in my view only, be well advised to push hard for a better offer.


ALL IMO> DYOR.
QP

[bscuit] 30/7/2015 00:45

I entered this party over a year ago and am up 85%. However I do think this is a lowball offer and it shouldn't take too much pushing by instis to get the price to 150. Let's hope they see it that way.

[r ball] 29/7/2015 21:53

Acceptance level low. the institutions may push for a higher price or just happy to get out. counteroffer likely

[r ball] 29/7/2015 21:33

how much will the FD who joined in May get?deal cheap. counter offer?

[quepassa] 29/7/2015 18:00

Excellent post. Concur.

A 7% premium to NAV is a very poor deal for shareholders and significantly undervalues Quintain.

A reasonable price is 20-25% over NAV.

Shareholders need in my opinion to hold their ground in order to send Quintain management a clear message to go back and negotiate a fairer offer for shareholders.

ALL IMO. DYOR.
QP

[winsome147] 29/7/2015 17:49

Getting Outline Planning is the easy bit. Detailed planning is guaranteed to be obtained once the detailed plans are ironed out with the local council planners.

Detailed planning lasts for 3 years but if you start the foundations of one of the buildings, ie, just a dig a few holes and pour in some token concrete, then the planning permission never expires.

They expect more planning decisions this Autumn which will bump up the NAV considerably.

I realistically expect a decent offer to be 145p. Premature to sell now. Low chance of deal falling through. High chance of a better offer from another party or by existing part if institutional holders vote no. Take a lesson from the Songbird Estates deal.

[shaf200] 29/7/2015 17:31

too many people unfortunately will be happy to accept 131p...

[davidosh] 29/7/2015 16:24

I suspect the planning consents are just a matter of putting the applications on the table and QED do not need to do that years in advance if they are not sure exactly what scale and size of units the market may want at that point in time. Planning consents are not forever so you tend to put them in when you are ready to start considering the actual build out in that part of the whole scheme.


Here is some comment from a broker...

Stiefel : Quintain has been the obvious bid target in the sector in our view for a while given its single asset focus and its wide discount to NAV (15% to current NAV using last night's closing price). Ever since the new management team came on board and started to tidy up the company, selling Greenwich and then iQ, our expectation was that either it would just work out the existing portfolio or that the company would be bid for. The cash offer of 131p is a fair offer in our view reflecting a 22% premium to the closing price of 107p last night and a 30% premium to the weighted average price over the six months to 28 July. It is only a 7.4% premium to the latest reported NAV of 122p and is broadly in line with our expected NAV estimate of 134p for March 2016. However, we do not believe the shares would have started trading at a premium rating near term given the longevity of the projects, the relatively low near-term NAV growth prospects compared with some of its London peers and its limited free cash flow/no dividend payout. Therefore whilst we will be sad to see Quintain leave the quoted sector, we believe this offer crystallises value at an early stage for shareholders.

[alan@bj] 29/7/2015 16:13

I've sold at 131p. If the deal falls apart the price will plummet. The only way it's going much higher is if another bidder turns up. I will be happy with the profit I've banked anyway.

[trytotakeiteasy] 29/7/2015 15:30

Huttonr - Liberum notes are PR puff on the part of Quintain more like.... as the company accepts the offer...

[maddox] 29/7/2015 12:41

I would have expected a rise to c.135p on the announcement of a reinstatement of the dividend. With both debt and financing sorted and with income rising, this could not be too far away.

[shaf200] 29/7/2015 12:23

well said QP... like I said i'll take 250p

[quepassa] 29/7/2015 12:15

Market showing 133p BID versus the OFFER price of 131p.

Looks like the market expects a higher price in due course.

The price reflects no worthwhile premium in my view for the enormous build-out upside potential of Quintain's Wembley land-bank, nor for their other interests such as Curzon Street Birmingham nor for the Surrey Salfords site.

It seems to me that the Institutional shareholders won't need much encouragement to send Quintain management packing with a flee in their ear for such a low-ball offer.

If management had paid a dividend like most of their peer-group, Quintain would not have been trading at anything like the recent Discount to NAV.

Fair value in my opinion for Quintain is a premium of 20-25% OVER THE NET ASSET VALUE of the Company. Not a premium based on yesterday's share price which has been held back by management's inability to pay a dividend.

I will be rejecting the offer and trust that other private and Institutional shareholders will consider doing the same on the basis that the offer SIGNIFICANTLY UNDERVALUES the upside potential of Quintain and represents a derisory premium of just 7% or so to the March EPRA NAV.

Fair value in my view for Quintain is a premium of 20-25%+ over the EPRA NAV to compensate for the enormous future build-out potential of The Company against a strong UK economy hungry for new housing and an increasingly benign/favourable planning backdrop.

ALL IMO. DYOR.
QP