Quadrise Share Discussion Threads

[maddox] 14/9/2015 13:17

Hi Jaws6,

Whatever makes you think that the management, PR firms, analysts and financial institutions are not reading the BBs? In my experience they certainly are.

Regards, Maddox

[quepassa] 14/9/2015 11:23

Well, you certainly make a very, very interesting point.

Many people perhaps might agree.

I always like to see a bid rejected a couple of times before finally being accepted and recommended by management at a higher price.

I also much prefer when a Company informs its shareholders that they are in preliminary discussions with a certain party which may or may not lead to an offer being made for the Company.

I'd love to know management's rationale for not doing that in this situation.

In my opinion it is good market etiquette and good corporate governance to let shareholders know that you are in preliminary discussions.

ALL IMO. DYOR.
QP

[jaws6] 14/9/2015 11:22

Why big shareholders not looking what we reading here .Not doing proper job them managers taking 131 p .
6904 post does raise some questions for QED board .

[colly01] 14/9/2015 11:18

All

I have today re instructed to reject the offer on my behalf.

I'm sure we will receive at least 1.50 per share if we hold out.

[trytotakeiteasy] 14/9/2015 11:09

QuePassa - there appears to be a massive conflict of interest here. The present management are likely to stay and get paid more under the ownership of Lone Star.... they have very few shares in Quintain.... the whole thing in my view stinks...... investors are being taken for mugs...

[quepassa] 14/9/2015 11:06

According to an article dated 21st August in The Estates Gazette, the approach to Quintain by Lone Star took place a couple of months before the formal offer.

It remains in my opinion unsatisfactory that Quintain did not inform shareholders or the market that they were in preliminary discussions.

The Estates Gazette article references a rare interview with Angus Dodd, Lone Star's MD of UK and Ireland which makes fascinating reading.

The article also states the following:

"It will not be amalgamated with other aspects of the Lone Star portfolio or be taken on by its asset management arm Hudson. All of Quintain’s management is expected to remain in place."

What I personally do not understand is the how article can report that management are expected to stay in place if any of salary/incentivaisation/bonuses/profit-sharing/remuneration have not already been discussed in principle.

Although, nothing has been formally agreed in terms of a retention plan for Quintain senior management and executives, in my view it should be made public knowledge what, if anything, may or may not have been discussed in principle and or outlined in terms of a retention plan for senior management.

The article also discusses that a new Masterplan for Wembley is expected to be submitted early next year to Brent to incorporate parts of Quintain's unconsented lands, including the down-at-heel nearby Wembley Retail Park.

I personally do not recall, inter alia, that such information was given in the Offer Document about a New Masterplan or about Wembley Retail Park. It seems to me in my opinion only that this may or may not be material information.

A new Masterplan would undoubtedly release significant extra value from the current Quintain estate in my view.

This in many ways is one of the reasons why, in my opinion,the price of 131p remains wholly unsatisfactory and does not in my view represent fair value nor compensate shareholders adequately for the build-out potential of Wembley.

My personal reading of the article is that a fair amount seems to have been going on behind the scenes.

The article which speaks to Angus Dodd, MD UK/Ireland of Lone Star is in my view important reading for Quintain shareholders.

Link to full article




The article includes the words:- "In Lone Star’s view, the estate is worth more than the sum of its parts." .

Personally, I cannot disagree with that statement but it makes me believe that far too much of the likely upside inherent in Quintain is being given away at a price which is FAR TOO LOW at 131p.


The above article certainly reinforces my personal view that the 131p remains wholly unacceptable.

ALL IMO. DYOR.
QP

[maddox] 14/9/2015 09:06

Hi Guys,

Lone Star Cowboy's will be considering what price they need to pay to secure the 75% acceptances they need. The more rejections they get to this extended (re-tabled) offer, the higher the price they will pitch.

I've just rejected again the lousy offer for my holdings, and suggest all holders do likewise.

Just say NO!

Regards, Maddox

[maddox] 11/9/2015 12:34

Hi QP

Just to further emphasise your point. The 7% 'premium' that our Board have gladly accepted is a premium to NAV. Whereas the house price inflation of 6% will apply to the GROSS value of the completed developments. The NAV is net the debt which will not be subject to the inflation.

Regards Maddox

[sf5] 11/9/2015 09:31

Found these two articles - apologies if already posted. One is 'old' - 29th July.

hxxp://costarfinance.com/2015/09/09/lone-stars-quintain-estates-offer-extended-for-two-weeks-after-53-backing/

hxxp://costarfinance.com/2015/07/29/lone-stars-quintain-strike-capitalises-on-london-resi-market-interest-rate-fears/

[quepassa] 11/9/2015 08:34

Good post. - Thanks.

I am not at all sure that they will manage to pull in the remaining 22% to go unconditional. Personally, against such strong data, I don't think they will.

I see no forecasts that we are at the top of the cycle. The demand for London housing is off the graph - especially more reasonably priced flats- as the numbers of people wanting to buy property in the Capital for varying reasons shows no sign of abating.

But an important point is that we'd get your 145p and much, much more over time, if the Company wasn't sold!

ALL IMO. DYOR.
QP

[winsome147] 11/9/2015 08:18

QP, I agree. Directors probably negotiated a good deal whereas they keep their jobs and future bonuses as part of any sale, plus retain a stake in the business. No one has so far come along to outbid Lonestar so I feel they may let this run for the duration of the extension in the hope that they will eventually get the 75% they need. Otherwise they would have upped the offer already.

The flipside is, if no other bidder comes along then it is starting to look like a fair price anyway. Not as if its rocket science weighing up investments in London property. If its such a bargain (which some of us think) then why has no one else put in a higher bid? Perhaps there is a perceived risk that the market is near the top of the cycle yet it will still be some years before Quintain's assets are turned to hard cash.

I'm still hoping for 145p per share somehow before this is over.

[quepassa] 11/9/2015 08:02

AN UNCOMFORTABLE TRUTH.

If you cannot believe The Royal Institute of Chartered Surveyors (RICS), who can you?

RICS yesterday DOUBLED their forecast following a survey for house price inflation for 2015 from 3% to 6%.

In my view, most of that increase is post the May General Election and since the March valuations on which the current bid is based.

If prices for residential are forecast to rise 6% this year ( and perhaps more in London), it makes a price of March NAV + 7% based on March valuations look laughable in my opinion.

Surely Quintain management must recognise the surge in the market since March as per the RICS survey and RICS' revised forecasts.

Quintain need in my view to provide shareholders with new valuations and a Trading Update.

In my view, it may be fair to expect that the portfolio value of Quintain's residential estate would rise by the RICS forecast of 6% anyway this year - if not more.

The following lengthy article from the Daily Mail discusses the situation in depth and is very interesting to read:



In my opinion only, the value of the Offer from BidCo looks worse and worse for shareholders by the day as the market continues to provide such strong data about surging house prices, house price inflation, record low stocks of housing, enormous demand for housing and extraordinarily positive results from all property developers.


ALL IMO. DYOR.
QP

[quepassa] 10/9/2015 21:26

Yes!

QP

[winsome147] 10/9/2015 21:14

so can those who voted 'No' revote with a 'Yes' if the offer is improved?

[kramch] 10/9/2015 14:25

This looks a pretty poor response given that our well connected directors have probably been talking to their city chums to vote their discretionary fund holdings for the deal. It seems the majority of independently minded investors have given it the thumbs down.

As posted at the outset of this offer I see enormous upside in developing what we have at Wembley, (over and above the current valuations) we don't have to do deals or buy land, just build it!
Hopefully the Texans will realise that there are enough savvy investors who can see through this opportunistic bid.

All IMHO,
K

[bscuit] 10/9/2015 09:59

QP--thanks--back into box. I didn't accept.

[quepassa] 10/9/2015 09:14

Maddox.

Exactly. A NO decision is a tougher decision to make. I see little that will change those NO decisions. Indeed, on the contrary the great flow of such positive news for the sector and London valuations will further reinforce the NO decisions in my view.


Bscuit.

Read the Offer Document/Prospectus which you can find on the QED website.

It doesn't really work like that. Bidco need 75% to go "unconditional". As per Clause 16.3 on p.21.

If the offer does not go unconditional (ie they don't get 75%) the Offer lapses and the shares go back to their owners. -

At this point, with 53.6% acceptances they have not acquired any control.

They have to get to 75% - and in my view that is looking less and less likely unless they improve the terms of the offer.


ALL IMO. DYOR.
QP

[bscuit] 10/9/2015 08:54

I'm being naive, but could LS choose to complete the purchase with acceptances since they have acquired effective control.

Presumably management was to tender its resignation then new directors will haveto be found with the cooperation of remaining shareholders?

[maddox] 10/9/2015 08:45

A sizeable proportion of the acceptances will have been 'default accept' for a recommended deal. Rejection is a more considered option, and so only 53% acceptance is a very poor result for the Board.

No doubt there'll be behind the scenes soundings being taken to establish what price the intransigent holders will accept.

[jaws6] 10/9/2015 07:55

QP
Well said in post above and I just do not understand why some big shareholders taking this 131 p offer.
Land in heart of London ,Value gone up more since last valuation.And most builders doing good .

[quepassa] 10/9/2015 06:09

Bad failure.

BidCo are nowhere near to being in a position to go unconditional with just 53.6% of acceptances. This is not a good outcome for them in my view, nor for their low-ball bid.

Around half of all shareholders have stood their ground and said NO to the low-ball opportunistic bid sending both Quintain management and Lone Star a strong message that the 131p Offer is just not acceptable. Shareholders want to share in the long-promised build-out potential of the Company and not see it sold off prematurely at a low price in my view.

In my opinion only, yesterday's result is tantamount to a vote of no confidence by around half of all shareholders in management of Quintain and in management's recommendation in my opinion.

A complete split vote is a sure sign that the price is and remains unattractive in my opinion.

My fear had been that the recent falling equity markets may have come to the rescue of the low-ball bid, where unnerved investors may have taken the opportunity to cash in. - However despite this, half of all investors have still resolutely held their ground and have said NO.

With the market strengthening again and with such astonishingly positive sector news from the likes of Derwent, Berkeley and Redrow to name a few, I cannot see , in my view only, why any investor who already said NO, would in any way now be minded to say YES to an unrevised extended offer against what is now a strengthening equity market and a London property market undeniably getting even stronger.

BidCo did not get the necessary 75% to go unconditional in six weeks, therefore it seems to me very unlikely that a further two weeks will make any material difference.

A circa50/50 outcome is a total split vote and, in my opinion, the Offer does not deserve to succeed at this price of 131p.

This is a major emabarassment for the top management of Quintain in my view who recommended the Offer and indeed for their advisors. The management and advisors jointly appear, in my opinion only, to have misread investor appetite and shareholder sentiment so badly.

I personally ask myself if management are in touch with how shareholders feel about the strategy, management and running of Quintain.

My personal recommendations to management would be to go back to the negotiating table to secure a significantly better price for investors. My personal view is that the 131p tabled so far is destined to failure. In my opinion only, fair value would be a 15-25% premium over NAV. Not just 7% over NAV. -It appears to me that such value is on the horizon anyway over the next year or two, even if the current bid falls away and there is a temporary retrenchment in share price.

In the meantime and in order to boost confidence, in my view management should and need to provide promptly both a Trading Update and Revised Property Valuations.

If the recommended Bid subsequently fails as, in my opinion only, would now seem a distinct possibility unless it is increased, senior management should, in my view only, consider their positions at Quintain in view of the fact that their recommendations on this Offer have initially garnered such divided support.

The First Closing result clearly indicates in my opinion that they have lost the support of almost half of their shareholders on their recommendation.


ALL IMO. DYOR.
QP

[trytotakeiteasy] 09/9/2015 22:27

why would shareholders who didn't accept before now accept? The fund wants to hit the magic 75% level at which it can de-list as then the remaining shareholders will probably accept as they don't want to hold an unlisted entity.

I think Lone Star are just playing hard ball. They want to pay as little as possible but want the whole company. Push to shove Lone Star will increase the offer price in my view so it can get the whole company. So worth holding on.

[bscuit] 09/9/2015 17:25

Still a balancing act.... can be one happy about controlling management.... or will they want to de-list? Am I not right in thinking that under 75% it's not a subsidiary but merely an investment and thus harder to use for borrowing?

[911man] 09/9/2015 17:24

That is a big surprise..... makes you wonder why they are so keen to sell?

[huttonr] 09/9/2015 17:12

53% acceptances !!