Quadrise Share Discussion Threads

[dov] 09/9/2015 17:11

53% acceptance of offer extension for another 2 weeeks.

Far more than i thought.

[trytotakeiteasy] 09/9/2015 15:30

my form said: you can take your 131p cash offer and shove it up where the sun don't shine......Slap in the face to management and directors and their fiduciary duty to look after shareholder interests....when the level of acceptances comes through I think it will make Quintain management/directors look like mugs!!! Shareholders will be saying we aren't idiots pals....

[quepassa] 09/9/2015 07:26

Yes. At 13.00hrs today is the First Closing Deadline.

Don't know exactly when any announcement follows one way or another.


As if any further evidence were needed as to how strong the London property market is, today's page 24 in the FT sums it up " Housebuilders Berkeley and Redrow have both been bolstered by strong demand as demand from buyers fuels Britain's housing market".

Some redacted snippets from the article:-

1 Berkeley said trading had been robust in the four months to the end of August with its core market in the south-east of England benefitting from a continuing rise in house prices.

2. Redrow reports record results and DOUBLED its final dividend

3. ...said that the operating environment was "stable", helped by the "decisive" general election result

4. The average price of houses sold increased by 13% to June

See full article

Many factors why relying on Quintain valuations now approaching six months old is, in my opinion, unsatisfactory.

ALL IMO> DYOR.
QP

[r ball] 09/9/2015 06:28

d day today

[quepassa] 07/9/2015 11:13

Good post.

The web is a many splendid thing.

All sorts of info ends up there and it then enters the public domain.

I once did a speculative search on GOOGLE.

I searched on GOOGLE for: " Lone Star Investor Presentation Real Estate Fund IV "

Lots of interesting info can be found on GOOGLE.

I visit America whenever I can. All I can say is that RHODE ISLAND is a fascinating place to visit.


ALL IMO. DYOR.
QP

[maddox] 07/9/2015 10:39

Hi sf5,

As Lone Star raise capital directly from investors I doubt that they have a need for further debt leverage and as such their cost of capital would be zero. I cannot find a prospectus for their Real Estate Fund that would tell us the capital structure. If that is so then the target minimum 25% IRR I would expect to incorporate the interest return that Lone Star would make by piling additional debt onto QED.

My own cost of capital is zero and I'd be happy with QED signing up to likewise deliver this return to their existing shareholders.

Regards, Maddox

[sf5] 05/9/2015 22:15

Thanks for the clarification QP.
I'd say 8% pa isn't a huge target return over 3 years, given the risks and uncertainties. If this were an overall return target for the acquisition and Lone Star were gearing up to seek a higher geared return on equity, that might be more attractive to them. However, if they're paying 10% pa for finance that doesn't make much sense and implies a high level of risk. It could be that that's just 'internal' interest sloshing between different Lone Star SPVs and could equally have been set at 5% pa or some such? And it could be that the 25% is just a conservative 'public' target and their best estimate is somewhat higher. Just idle speculation on my part!

Is it also fair to assume that if there were a counter bid before 9 Sept first closing it would have emerged by now? A potential out-bidder may be concerned that as the deadline nears some holders would be minded to accept the Lone Star bid (or sell in the market) rather than risk a price fall-back if the offer is rejected and so would have shown their hand by now? Again, idle speculation on my part but I'd think the major holders have discussed amongst themselves and have a fair idea which way the vote will go.

Either way, Wednesday should be interesting!

[r ball] 05/9/2015 17:14

hmmm. q1 trading stmt overdue.

[quepassa] 04/9/2015 10:49

Fair point.

It would be fair to assume that any investment should meet/exceed/come close to the fund's IRR 25% hurdle rate.

This is potentially a massive investment for the Lone Star Ref IV fund in my opinion. By putting so many eggs into one basket, my guess is that Quintain would comfortably reach or comfortably exceed the fund's gross 25% IRR return target.

Let's guess that the 25% IRR is in fact a three year time-frame which it appears is the fund's " Commitment Period" being 3 years from final closing of the fund.

That equates to achieving roughly 8% per annum.

That is very different to the ZERO dividend which shareholders are currently getting, combined with a hitherto gaping discount-to-Nav of some 15-20%

Lone Star Ref IV are mentioning a headline 25% IRR as their TARGET INVESTMENT RETURN with a COMMITMENT PERIOD OF THREE YEARS on the overall fund performance.

There is an enormous gulf between a 25% IRR - even spread over three years or so - and the total lack of dividend currently visible on the existing share.

If Lone Star potentially believe they can get a 25% IRR on Quintain by paying 131p over a potential 3 year Commitment Period - which may or may not equate to roughly 8% pa- why is this being handed to them on a plate?

Why can't management get the same 25% for shareholders without selling out?

For anyone in doubt, 25% on the tabled 131p equates to 163.75p - albeit over three years. And Lone Star may indeed in my view achieve a significantly higher IRR on Quintain than 25%, given the way London property is going gangbusters at the moment.

That's why, in my opinion only, 131p seems far too cheap.

I personally put fair value on a sale of Quintain today at a price of , or near 150p.

Having said that, I believe that Quintain would deliver significantly more shareholder value than this over time with better management.

ALL IMO. DYOR.
QP

[sf5] 04/9/2015 10:13

I sold out last week, taking the view that 3x my historical cost isn't to be sneezed at, and 'bird in the hand' etc. May re-enter depending how the vote pans out.

I'm unclear about the 25% IRR quoted. Normally an IRR is a % pa - if so, how many years are Lone Star forecasting this for? Perhaps 3 years or so to complete the Wembley development and then they seek an exit? Or is 25% the projected total return over the development period, which wouldn't look so staggering?

[quepassa] 04/9/2015 09:38

Absolutely right!

And I wonder how any remuneration/incentivisation packages for Max James and Kempner may or may not compare in the the potential circumstances that they were to go with Quintain to Lone Star.

Already, and as part of the financing package, Lone Star have caused to be put in place an Intercompany Loan in support of the bid financing priced at a whopping interest rate of 10%. Where will the acquiring company/Bidco/Bailey get the cashflow from to repay the hefty 10% interest rate?

I guess you don't need a maths PHD to figure that one out.

Lone Star is renowned as an opportunistic buyer of distressed assets. It is not entirely clear to me why Quintain is entertaining an offer from such a buyer, nor is it clear to me why Quintain never disclosed that they had received a preliminary approach.

The amount of management / performance fees that Lone Star Ref IV levies on funds under management is considerable by any standards in my view.

It seems to me that Lone Star are of the opinion that Quintain can bear the fees, costs, interest margins as well as throwing up an IRR of 25%.

These are just some of the factors which lead me personally to believe that shareholders could do much better elsewhere.

ALL IMO. DYOR.
QP

[maddox] 04/9/2015 09:07

Yep, If QED can produce an IRR of 25% for the Lone Star Cowboys ...they can do it for us! On the basis that QED's Board have agreed this offer -this is what they have signed up to.

[quepassa] 04/9/2015 07:54

For avoidance of doubt, I have rejected and not taken up the 131p offer in respect of ALL of my not inconsiderable holdings in Quintain.

If Lone Star have a 25% IRR on their fund, you can be damn certain in my view that Quintain contains a lot of embedded value and future build-out value which is not adequately reflected in the lousy 131p which has been tabled.

ALL IMO. DYOR.
QP

[colly01] 04/9/2015 07:46

Likewise through the Self trade platform I instructed them to reject the offer.

No views or updates at all anywhere from the so called professionals , I feel confident that the offer will be rejected.

Cheers

[r ball] 03/9/2015 17:32

I too rejected it through Halifax Sharedealing. I bought in at 45p and 89p but believe offer is too low.

[inki] 03/9/2015 16:31

Now is not the time to sell good assets, without a decent premium.
I have opted on iDealing to accept 0. There is little detail on what is their default.

[bjsnt] 03/9/2015 15:19

Me too. I'm in no desperate hurry, and am happy to wait a couple of years for Quintain to build Wembley out and see a proper value return.

[maddox] 03/9/2015 13:58

Hi QP,

Totally agree.

I've voted against and I'll be very happy if this fails even if there is a retrenchment in the share price

Regards Maddox

[quepassa] 03/9/2015 09:08

I haven't heard or seen anyone say a single positive thing about this low-ball opportunistic bid for Quintain.

I hope it fails. I believe it deserves to fail.

Investors haven't even been given any up-to-date new valuations which in my view is shocking.

In my opinion, at 131p it is a lousy offer.

ALL IMO. DYOR.
QP

[quepassa] 01/9/2015 11:56

It is interesting to note the DEFAULT OPTION of two of the largest online brokers in the UK.

The DEFAULT OPTION for Barclays Stockbrokers and for TD DIRECT are both NO ACTION/DO NOT ACCEPT OFFER.


For Barclays, Option 1 is Cash/Accept.
Option 2 is the DEFAULT OPTION which is NO ACTION.
Reply Deadline 3rd. September

For TD Direct, Option 1 is DO NOT ACCEPT which is the DEFAULT OPTION
Option 2 is ACCEPT THE OFFER
Reply Deadline 4th. September



I guess if you own shares through Barclays or TD, that you don't need to take any action if you wish to reject the 131p offer from BidCo. Please double-check however for yourselves.


ALL IMO> DYOR.
QP

[r ball] 31/8/2015 11:47

9 September 1.00pm deadline

[r ball] 28/8/2015 16:50

No reason to accept.

[jlo10] 25/8/2015 15:55

Just received this from HL (which i have edited)

What are my choices?
Option 1 - You can accept the Offer. Under the terms of this Offer Quintain Estates & Development plc Shareholders have been offered 131p in cash for each Share held. Based on your current holding of xx Shares you have been offered £ xx.
Option 2 - The alternative is to do nothing. If you do not wish to participate in this Offer you are not required to take any action at this time.

When do I have to decide by?

Any acceptance must be received in this office by noon Monday 7 September 2015.
APPENDIX

QUESTIONS AND ANSWERS
What happens if the Offer is not declared wholly unconditional?

If a certain required acceptance level has not been met by the Company’s first acceptance date they can choose to extend the Offer period. A new deadline date will be set and further announcements will be made. If the Offer period is extended and we have not received a response from you, you will be written to again.
Please note the bidding party (Bailey Acquisitions Limited) can make the Offer conditional, for example on receiving a certain percentage of acceptances, and can back out of the bid if these conditions are not met. They can also close the Offer at this first opportunity and satisfy the payment obligations if they wish.

What happens if I do not accept the Offer?

If no acceptance is received from you with regard to this Takeover Offer and Bailey Acquisitions Limited announce that the Offer is unconditional in all respects (wholly unconditional) and receive acceptances for at least 75% of the Company’s Shares they have stated that they intend to delist the Company. In this event you will be written to again outlining your options.

If Bailey Acquisitions Limited is able to obtain acceptances for 90% of the Company's Shares and announces that the Offer is unconditional in all respects (wholly unconditional) then they can force all remaining Shareholders to sell their Shares. Bailey Acquisitions Limited has indicated that if it receives acceptances in excess of 90% it intends to exercise it rights to compulsorily acquire the remaining Quintain Estates & Development plc Shares in respect of which the Offer has not been accepted, on the same terms as the Offer. If the Company receives acceptances in excess of 90% and move to compulsorily acquire the remaining Shares, we will put forward your holding for acceptance of the Offer in order to ensure that you receive proceeds in respect of your holding as soon as possible.

What is the current level of acceptance?

In aggregate, Bailey Acquisition Limited has received irrevocable undertakings or letters of intent to accept the Offer in respect of approximately 0.3% of the existing Ordinary Share Capital of Quintain Estates & Development plc