Sepura Share Discussion Threads

[technowiz] 20/2/2017 19:36

14:53:06 15.52 500,000 NT 15.50 15.75 Sell

i saw that trade shown as a sell. didn't see a matching buy. share price bid dropped to 15.0p after that trade.

[exbroker] 20/2/2017 17:46

A buyer bought 500k at 15.52 and then the board got hit and the tree was shaken!
The seller sold 500k at 15.5 less the comm. Seller was an arb.

[technowiz] 20/2/2017 16:59

wunderbar! got in at near enough my target entry price. looked like a bit of a tree shake today with bid price dropping to as low as 14.00 though only 2,694 shares were sold at 14p.

[l0ngshanks] 16/2/2017 11:04

As the dominant supplier to the German emergency services it would not be in Germany's best interests to see Sepura fail. Yes, I'm sure the German Government will wish to seek security assurances. However, HYTERA already sells TETRA radios to other EEC public bodies. With Motorola and others in the market there can't be a serious competition issue.

[technowiz] 15/2/2017 12:47

as posted on the ii board..

"So now that the 20p is approved - why is the share trading 16/16.75p this says to me the market is not confident in the 20p per share else they would be filling their boots. What am I missing here?"

d'oh!

[shroder] 15/2/2017 12:29

2nd time lucky..

[dsmk123] 15/2/2017 12:13

I agree that the risk is higher in sepu case for germany.
Where they go or end up is far worse.
In my long time of being invested here I have been in profit and then loss, the warning shots have been fired on a number of occasions and due to greed I have failed to take heed. I will now give serious consideration to offload my entire holding as I would rather lose a little then the lot!

[shroder] 15/2/2017 11:52

Good post tab,

Personally I cannot believe the speed of this calamity, under 12 months, unbelievable.

[tabhair] 15/2/2017 11:24

Personally, I think there is a much greater than 20% chance that the deal is blocked by Germany.

Over the last few years, China has been on a buy-out binge, snapping up European companies. While we in Britain seem to be happy to allow key assets to fall into foreign ownership, the Germans have not been so eager. They are particularly annoyed because despite China having open access to markets and companies here, this access is not reciprocated when European companies try to compete in China. Therefore, the German government can (and have) blocked takeovers where the technology involved is of importance to industry or vital to telecommunications and national security. Sepura clearly fall into that second criteria, so I think the German merger authority are well within their right to block this. If you want more background, then it's worth Googling articles about Sigmar Gabriel, the German Economics Minister and Chinese takeovers.

As for the future of Sepura without a takeover? I think it's very bleak. Net debt is £79M. Even assuming the business can go back to the level of cash flows it had in 2014, the debt to operating cash flow is 3.5x - very, very high. Also, you have to consider the costs sustained over this takeover. The Scheme Document clearly outlines that Sepura are on the hook for £5M here. How much of this can they recoup if the takeover fails? I have no idea, but the company is already struggling to keep its head above water.

Personally, I have sold out and taken my loss on this one. If Sepura's balance sheet was in better shape, I probably would try to ride this one out. It's not though, and there's now a very real chance that the bankers may end up taking possession of this in order to secure their loans.

[dsmk123] 15/2/2017 02:42

Great post/info tabhair.
I must admit that I am nervous sitting on a significant holding but have held out selling at a loss since the announcement re German fiasco.
I happy to wait and if there is an 805 chance of going through then those are fairly good odds.
What would be interesting is to hear views as to what may happens or outcomes if we end up being in the 20% that do not make it past phase 2.

[tabhair] 14/2/2017 15:35

The German competition website must literally have just been updated as I typed the above, the reference to Hytera/Sepura has been removed from being in the Phase 1 process and is now wholly in Phase 2.

[tabhair] 14/2/2017 15:16

I have to say, I never expected to have to go down the route of learning about German merger and competition rules. I found the following website, and it was helpful for me in understanding how the whole process works.

hxxps://www.iclg.co.uk/practice-areas/merger-control/merger-control-2017/germany

Now for the bad news, going to the competition website, it does indeed appear that the Hytera merger has moved to Phase 2 of the process (go to the below link, use Google translate to confirm).

hxxp://www.bundeskartellamt.de/DE/Fusionskontrolle/LaufendeHauptpruefverfahren/hauptpruefverfahren_node.html

As to what happens next?

The first link also says that if a merge goes to Phase 2, it usually expected that the full 3 months will be taken to evaluate the merger. Therefore, it's likely that the earliest a decision will be made by is May 13th. It gets worse than that though. A decision may not even be made until June, or even July if documentation is required of Hytera/Sepura (any requests for information by the German competition authority stop the 3 month clock). Generally, cases don't appear to go beyond the 4-5 month mark. As for chances of succes, doing some quick number crunching of previous cases, it appears that 20% of cases that reach Phase 2 are blocked.

So going by previous cases, we can expect a decision by June and we have an 80% of success.

[ohdearohdearohdear] 13/2/2017 11:06

Really? I take it you have continued to hold all the way from 27p. In which case, you did need my advice and warnings. You can lead a donkey to water etc............

[l0ngshanks] 13/2/2017 10:56

OhFearOhFear, most of us don't need your advice and certainly not your warnings.
These regulatory approvals were to be expected and shouldn't pose a problem.

[ohdearohdearohdear] 13/2/2017 09:46

ohdearohdearohdear. Don't say I didn't warn you. I bet you wish you had taken my advise and sold at 27p and above. Yes...........I told you so.

[1gw] 13/2/2017 09:11

Sold the rest now. Decided to get right out and see where it settles.

Sold 4 times this morning, at 18.5p, 17.9p, 17.2p and 17.0p.

[shroder] 13/2/2017 08:57

At the risk of repeating myself, - what a mess -

From half year report Nov 22nd.

Financing

- €73.7 million after expenses raised from shareholders in July 2016 and banking arrangements revised

- The Group will require a waiver of some of its covenants from March 2017

[1gw] 13/2/2017 08:50

I sold just over 1/2 my remaining holding this morning. While there may have been an initial over-reaction in the share price, I don't like the comment in the rns about the impact of the delay on Sepura's full-year results. It seems more and more will be riding on the deal going through and if Hytera should get cold feet or try to renegotiate based on competition authority demands then Sepura may be in a difficult position.

[shroder] 13/2/2017 08:46

What a total mess.

German sign off was always a worry, especially given current political climate which has since worsened.

How will this impact bank covenant discussions is an unknown. The last update appears to mention March 17, has there been anything since?

[tabhair] 09/2/2017 16:51

We live in hope for a counter bid, but realistically at this stage of the process, there's only a very small chance of it happening.

[1gw] 09/2/2017 16:39

Thank goodness for that. Bit of a delay on regulatory approvals, but that's very minor compared to the vote passing.

Counter-bidders make yourselves known now, or forever hold your peace...

[tabhair] 09/2/2017 16:35

Vote out, it passed!