Synthomer Takeover Rumours (SYNT)

I bought in yesterday. The post-consolidation £100/share peak just a couple of years ago has been diluted by the rights issue down to 1500p. It seems clear now that the company will survive - whether it can return to 1500p is doubtful, but looking at the numbers and the actions being taken, in yesterday's results RNS, I would think that 800-1000p is achievable within a couple of years? Given that Mr Market looks forward and not backwards, making a run for 400p in the short term, especially as any remaining shorts close, seems quite achievable to me. There will probably be speculation about a takeover too IMO, while the valuation is so low. And then when the H1 results are out at the end of the summer, if progress continues, could easily push further northwards IMO. Just my view, NAI DYOR

There is still a decent business there, but the company had its head in the sand too long and by the time it finally accepted that it had no choice but to raise more capital to strengthen the balance sheet, it could not raise enough. Even with the shareholders diluted almost out of existence the debt remains too high. A takeover at a fire sale price is probably the best we can hope for. No purchaser will pay much for the shares because of the weight of debt, but if the company goes into administration and the business is sold clear of the debt, we shall see nothing for our shares. Best mentally to write Synthomer off, and regard anything shareholders salvage from the wreck as a bonus.

Fortunately my holding was small. Less happily, even the dealing charges to sell it now would be significant in relation to the sale proceeds! The only reason to sell would be to clean up the portfolio, removing a holding on which I will never see my money back.. As to 'rising as dramatically as it fell', if it doubled or even quadrupled from here I would still be well in the red zone. Those who subscribed for more shares must be feeling pretty sick. Is there any hope of a takeover, i wonder? There is a viable business there, but in the present climate I guess no purchaser would fancy taking on the debt.