Sepura Share Discussion Threads

[woody888] 28/2/2017 20:05

If this was the easiest 45% gain going the share price would not be 13.75p
20P was clearly not a steal as no counter offer came.
Debt is the anchor compounded by uninspiring cash flow and profitability

I would however seriously consider taking a binary punt on the proposed deal happening but only at a share purchase price of no more than 9.75p > IMHO

If the deal falls through the company (its financial position) may be in deep trouble (ergo shareholders) if the lenders get nervous and call in as opposed to renewing outstanding loans.

Alternatively another outcome if the deal does not reach fruition (it would be better than implosion) is a rights issue/fund raising and mega dilution but would be another value killer.

[the stinger] 27/2/2017 17:39

1gw, considering these were at £2 last year and then they raised £65m at 35p per share only last July,,,,along with all the IP, tech, contacts and contracts to date....especially the latest for Germany itself!!! me thinks someone is getting a steal at 20p ps... Its a no brainer and excellent fit for Hytera especially with all other shareholder approvals etc in place. Just very surprised at the low price they've got it for..and very surprised the offer was not bettered by someone.

Seems to be just a procedural matter now...and was probably expected by both Sepura and Hytera,,, as look at the business they already have in Germany alone, it was bound to go to phase 2..

This just might be the easiest 45% gain ever going....Then again - who knows in this crazy market what will happen lol...

[1gw] 27/2/2017 16:22

I'm just suggesting there might be another headwind here now. Where does the word schadenfreude come from?

[scorpione] 27/2/2017 16:19

You seem to be contradicting what you said in your earlier post (3243) about German emergency services requiring continuity etc.

[1gw] 27/2/2017 16:06

It depends how political you think both deals are I think. The ES article seems to me to suggest that possibly LSE wanted out in order to do a deal with the NYSE and used the regulatory request as a convenient excuse to spike the German deal. If German politicians see it that way then don't you think they might look unfavourably on any request from Sepura or its British supporters to facilitate completion of the Hytera deal in order to save what's left of the Sepura business (or they might even proactively encourage the German regulator to take its time)? Of course the competition regulator should be independent of the politics but you never quite know.

"But the LSE’s rejection of the EU request ... has fuelled in rumours of a rift with Frankfurt about the move, as well as the strength of the LSE’s commitment to the deal."
..."A collapse of the deal would allow LSE to pursue another potential merger, this time with New York Stock Exchange owner ICE which has been flagged as a potential buyer after expressing an interest last year."
(Extract from same ES article linked in my previous post)

[scorpione] 27/2/2017 15:50

1GW - completely different industries and circumstances, I therefore very much doubt any knock on effect.

[1gw] 27/2/2017 15:42

I've put this on the London SouthEast board as well, but it seems to me fairly relevant in considering the probability of the Hytera deal going through.
-----------------------
"Anglo-German rift opens up as stock exchange tie-up approaches collapse"

I suspect the LSE-Deutsche Borse fallout isn't going to make things any easier for the Hytera-Sepura deal to get through the German regulator.

[ohdearohdearohdear] 27/2/2017 15:15

Oh dear. I do hope some folk got out at 27p as I advised them to. If not .......... ohdearohdearohdear.

[1gw] 27/2/2017 11:23

Alternative to sale.

For the prognosis here I go back to the statement in the interims on 22nd November:

"In agreement with the lenders, the new management team is proactively exploring a range of other strategic options, including an accelerated turn-around plan, alternative funding arrangements and a possible sale of certain assets. The outcome for shareholders resulting from a number of those options is currently uncertain."

The last sentence I took as code for likely to lead to significant shareprice falls, although at the time the shareprice had been over 20p I think in anticipation of an offer from Hytera.

But the reality now is that a further 3 months has already passed since that interims statement, during which time I imagine cashflow has been solidly negative. I can't imagine investors having any appetite for a placing, even heavily discounted, so maybe a debt-for-equity swap leaving the lenders with most of the equity or perhaps an attempt at a quick firesale of Teltronic. I would expect the new Chairman and interim CEO to be working with advisors (and maybe already with interested potential buyers) on how quickly and how much cash could be raised from targeted disposals if the Hytera deal were to fall through.

[scorpione] 27/2/2017 11:09

1gw - I agree with most of your points; as stated in all previous posts I also think it's more likely to still go ahead than not.

Rightly or wrongly I do however disagree on value if it fails to go through as from past experience I have at times if anything seen companies sold as 'break up' fetching more than if sold as a whole. The only problem with that scenario is one of time because it would not happen overnight!

[whentobuy] 27/2/2017 11:00

I don't know where the Directors are on this? Probably keeping their head down and trying to manage covenant extensions and keeping their fingers crossed on a clearance.
It would be nice to think that some kind of plan B, in the event of Hytera bid falling away or not gaining clearance, is being considered.
However, given that they put their backing behind 20p/share as good price I guess any management proposal or plan B will be at a lessor value, or fair value according to management? What's the likely prognosis if the bid falls away?

[scorpione] 27/2/2017 09:06

1gw - I hear what you are saying, however this company has interests and business contracts all over the world which must have value. The Chinese are very shrewd business people, they would have done extensive due diligence and would not overpay so the bottom line here is that the company must be worth at least 20p per share.

[jm2009jm] 27/2/2017 08:21

re post: 3240 ..u spammed that across every thread u cud think of this weekend

[investment dave] 25/2/2017 22:10

1gw do you think the takeover will happe?

[1gw] 25/2/2017 20:57

Scorpione: "Worst case scenario the company's net asset value is 29p per share..."

As I read the interims, the net asset value at 30th September was 147m Euros, which with about 371m shares in issue is about 40 Eurocents/share, or 34p/share at £1=1.18 Euros.

The problem is that a lot of the asset value is "intangibles". In fact there were Euro 149m of intangibles on the balance sheet which is more than the net asset value.

Intangibles are chiefly goodwill, capitalised development costs and "acquired software, customer relationships and brand". Goodwill is the excess of price paid for acquisitions over the identifiable asset value.

So the issue for Sepura is that a lot of that intangible value must be at risk of write-off if the acquisition falls through. The auditors (PWC) drew attention in the interims to the "material uncertainty" concerning Sepura's ability to continue as a going concern.

In any event the fact that since the interims were signed off the Sepura board has recommended an offer of 20p/share and no counter-bidder has come forward, must raise significant doubts about the valuation of intangibles on the balance sheet, even if the auditors are prepared to allow the year-end accounts to be presented on a "going concern" basis.

So I don't think there's much comfort to be had from the balance sheet.

[scorpione] 24/2/2017 15:41

JNBRW - my apologies, reading your message quickly I misunderstood you; point taken.

[jnbrw] 24/2/2017 15:30

my point was this might well be a storm in a teacup and might present an interesting buying op imo but dyor

[scorpione] 24/2/2017 15:09

Nonsense, are you a mergers and acquisitions expert? Are you an insider in the German / Spanish competition authorities? Sepura has been a bit hasty in my opinion to assume that they would sail through. Nevertheless the companies would not have entered into a deal without expert and impartial advice and recommendation on the competition issues.

[jnbrw] 24/2/2017 14:59

certainly the spanish ( and chinese ) regulatory sign off would have been expected. These checks (even the German) are standard procedure in most merger/tkovr scenarios.

[scorpione] 24/2/2017 14:48

As I mentioned in earlier posts, Mr market is pricing this on the basis that the takeover is no longer happening and worse. This is totally unjustified as delays in obtaining clearance in these situations is nothing new, it happens quite often for one reason or another. In my view the takeover has a far higher than 50% chance of succeeding. Do your own research and reach your own conclusion. If I had money available I would be buying at these ludicrously low levels. Worst case scenario the company's net asset value is 29p per share according to ADVFN (it's quoted higher in some other places)so Hytera are getting a steal and will do everything they can to comply with Germany / Spain to see this through in my opinion.

[whentobuy] 24/2/2017 08:44

Buy available at 13.64 with potential upside of 48% if clearance provided and closure before trading issues. Stop loss at 10% fall giving a 4.8/1 speculative play.
Any ideas on the expectation of German/Spanish clearances?

[investment dave] 23/2/2017 17:05

Another down day here! When will it end?