Thalassa Share Discussion Threads

[ntv] 23/12/2018 13:08

topvest
agreed and which LSR shareholders really want worthless THAL ordinaries(they won't get Peference shares)
my guess an all share offer
from memory the prefs have 10 times voting powers
Preference shares get first claim on assets as well if liquidated
WAFJ the AIM FSA london stock exchange are
How many other directors will run off with a couple of mates with all the cash in due course
wonder what the rumuneration package will be this year

[topvest] 22/12/2018 15:09

This is what was said in September: really no need to try and work out.

"LSR

Thalassa currently owns 25.48% of The Local Shopping REIT plc ("LSR"). The liquidation of the company's assets continues apace; unfortunately, the losses incurred on disposal also continue apace. We are clearly unhappy with the level of cost that LSR and, therefore, its shareholders are incurring whilst its advisers, managers and consultants are rewarded for generating ever increasing losses!

THAL's 25% holding does, however, represent 'negative equity control', which, bluntly put means that LSR will be unable to distribute any cash to its shareholders beyond the sum of its retained earnings (currently GBP8.1m but dwindling fast) without an extraordinary resolution requiring 75% of the votes cast at the meeting. Clearly no such majority can be achieved without Thalassa's votes.

Thalassa accounts for its holding in LSR as an associate company. As a result, Thalassa's current holding cost basis is +/-29.6p per share, which does not reflect the +/-2.5p per share of Forex hedging gains that the Company has also realised and booked.

I believe that Thalassa shareholders will do well out of the Company's investment in LSR, in spite of LSR's woeful performance!"

Very clear:
1. Historical cost was 29.6p.
2. Clear undertaking of 'minority equity control' and likely blocking of any special resolution.
3. Conclusion that they will do well, and so the only way they will do well is if non-Thalassa shareholders of LSR get proportionately, a lot less.

[andyr0503] 22/12/2018 09:27

Frazboy - Yes, I was going on their press announcements. I do agree that DS paid early to mid 30s for his early holdings. I think the reconciliation between the two may be to do with exchange rate changes and hedging - that was all I could think of.

[frazboy] 22/12/2018 09:02

Andy - by the way, you said THAL had made a profit on the LSR holding but if you go back to the original announcements regarding the purchases I think you’ll find DS paid early to mid 30s for his holdings. That is inconsistent with what is stated in the more recent Thalassa press announcements. Happy to be corrected on this.

[cockerhoop] 22/12/2018 07:35

Frazboy,Was just thinking aloud really - very interesting that a full listing gives additional flexibility in certain circumstances which goes against the general perception of AIM having virtually no regulation.Anyway good to bounce a few thoughts :-)

[cockerhoop] 21/12/2018 22:09

Or any future THAL M&A deal

[frazboy] 21/12/2018 22:01

A couple of interesting paragraphs in here:



He may actually be going for a main market listing to bypass having to get Thalassa shareholders to approve an LSR deal!

[cockerhoop] 21/12/2018 21:50

Apols - my mistake. Presumably that would make the LSR listing more valuable as a vehicle to back into? No effort has been made by DS to hoover up any loose LSR shares to get close to 30% - since the GM would seem to have been an ideal time.

[cockerhoop] 21/12/2018 21:04

Frazboy,Not quite sure which point I'm missing? Do you think #THAL want to utilise the LSR Aim listing?I've been highly critical of DS's various actions over the years but the fact #THAL has continued to buyback shares seemed to suggest he was not looking to de-list on the cheap but it was very hard to understand what his motives were with the preference share shenanigans. I know Graham Neary wasn't able to get satisfactory answers after contacting the company. If it was done to ensure there were less opposition to a full listing then I see that as a positive. A full listing should restrain DS somewhat.

[topvest] 21/12/2018 17:25

Hi NTV - no, can’t get far on dividends due to lack of distributable reserves. Would require a capital reduction and special resolution / court approval. When I looked a few weeks back it looked tricky, as all routes seemed to need a special resolution. I’m not an expert on a Court process, but I would suspect a disputed case would be expensive. Thalassa can probably offer 30p+ given their enormous discount versus net assets. They seem to have the upper hand unfortunately. It’s very wrong.

[cockerhoop] 21/12/2018 16:59

Andy,

I understand the basic principle but frankly can't understand DS going through the bother and acrimony for a net gain of approx £1.5m before takeover costs.

He clearly has issues with the current LSR board (as have the majority of shareholders) and feels snubbed with the lack of consultation prior to the liquidation so has decided to give them a bloody nose.

Regards the preference shares - it seems it may be a device to help the main market listing get away and then they may be cancelled as I'm sure they'd be less well received on the main market than on AIM.

[ntv] 21/12/2018 14:18

can't short usual way so anyone know a spread bet firm doing it?

[ntv] 21/12/2018 14:16

topvest
can LSR return cash as dividends rather than liquidate?
or do they need court approval and shareholder consent?

[andyr0503] 21/12/2018 12:52

Trying to answer your question, though I am sure topvest will do it better (written because I had not seen topvest’s response when I wrote this). THAL bids to buy LSR with a paper for paper offer (or possibly a part cash, part paper offer). Current NAV of LSR, which will be all cash shortly, is 33.6p, which is what LSR shareholders were hoping for via a liquidation. But a liquidation has been blocked by THAL, so shareholders may be forced to accept a substandard offer for their shares, below that 33.6p, to cash out. Currently with the share price around 27p, THAL could try to get away with say an offer of 30p paid in THAL shares, because they would continue to threaten to block the liquidation route. But THAL shares would still be relatively illiquid so LSR shareholders trying to sell their new THAL shares subsequently to get the cash they were hoping for in the LSR liquidation will find the price falling, and will get nowhere near the 33.6p per share a liquidation would get them . Meanwhile THAL would own LSR, and have got that 33.6p per share worth of cash for nominally 30p per share but in fact for less than that as they were only offering their paper. THAL will only be denied if sufficient LSR shareholders refuse to play ball. There is no simple way out of the blocking vote impasse, other than a Just and equitable compulsory liquidation of LSR, but that involves legal costs, uncertainty and delay. Hope that helps.

[topvest] 21/12/2018 12:40

You can't do a good deal with a bad person, so I wouldn't touch anything connected with him and sell straight away. All in my opinion, so DYOR.

[topvest] 21/12/2018 12:39

From what I can see liquidating the company or returning the cash if you don't have > 75% of the votes is difficult and very costly. Basically, they can't pass anything at LSR that needs a special resolution which requires 75%+ to win.

I am therefore assuming that they will make an all share offer for LSR and hope to get sufficient backing to get them over the line. Of course once he gets control, it all goes to him because of the preference share ticking time bomb in Thalassa. I might be wrong, but he appears to talk Buffett.... but is really a fairly nasty piece of work. Thalassa = Capitalism gone wrong = Bear Sterns on pills.

[frazboy] 21/12/2018 12:07

I would also like to hear how you think he's going to do it topvest - although I may agree that DS is after the cash it's not clear to me what the process is that gets him there

[cockerhoop] 21/12/2018 11:58

Can you talk me through that process topvest?

[gfrae] 21/12/2018 10:42

This move could cause some sellers who may have bought for IHT relief (though it shouldn't as THAL has not qualified for some time).

[topvest] 21/12/2018 10:06

Lombard Odier seem to be caught

I'm relieved to have got out of LSR. Its pretty obvious that this is a first step move on LSR to "steal" their cash.