Thalassa Share Discussion Threads

[gfrae] 13/2/2019 21:01

Perhaps the Reit status of LSR is worth a few p to THAL?

[stemis] 13/2/2019 19:15

Probably good reasons why you wouldn't want to be a minority shareholder in a THAL controlled LSR...

[frazboy] 13/2/2019 18:10

Happy to be corrected on any of the points in the post below if folk think they're wrong - a lot of the detail is from memory. And we don't of course know for sure why Thalassa issued preference shares or why they chose to list on the main market.

[frazboy] 13/2/2019 18:03

No one really knows what DS thinks, we know what he writes, but we don't know what he thinks.What we do know is this...On the positive side:Thalassa got a good price for WGPOn the negative side:No specific cause has been provided as to why Thalassa needs extra cash resources (which it would acquire from LSR if the bid is successful).LSR's shareholders, with the exception of Thalassa, voted overwhelmingly to have the company liquidated and their cash returned.Thalassa appears to have paid early to mid 30s for its LSR stake (source RNS at the time of purchases).DS was exceptionally well remunerated in both 2017 and 2016 (source company accounts) receiving far higher director remuneration than might have been expected given the value of the assets under management. No breakdown of director remuneration has been provided for 2018.The Thalassa investment trust still owes the company (from 2018 accounts) ~$1.5m (despite most of the loan being written off) from the loan the company gave the trust to buy shares from DS a few years ago.Thalassa was, according to the 2017 accounts, still paying the rent for Eastleigh court/stables as the contract entered into in 2014 was for 10 years (unless WGP has picked up the contract?) - the owner of the property is a company owned by Duncan Soukup.Francis Smulder was also well remunerated in 2017 (source company accounts) given the size of the company. No breakdown of director remuneration has been provided for 2018.The company issued preference shares to concentrate power in the hands of the existing shareholders - the likely benefactors being DS and the Thalassa investment trust.The company listed on the main market to bypass having to obtain shareholder approval for the LSR (and possibly other) transactions.The cash burn rate, for Thalassa, as calculated from the 2018 annual report and 2018 H1 accounts, is around $4m per annum, annualised. Unfortunately it's not clear what the money is being spent on.I'm not sure I would have supported a rights issue.

[scburbs] 13/2/2019 16:47

Not worth it unless you think you are uniquely placed to recover all the THAL NAV per share you have just diluted through your investing talents.

If others shared that view a right issue would have been the way to go. As they don’t appear to LSR shareholders are being coerced to provide it.

They want control of the cash, no other value in the shell.

[stemis] 13/2/2019 10:51

"He thinks he can extract value by using LSR as a shell"

If he ends up with 61.8% of LSR, which will probably end up a £26m cash shell, he is exposed to value on £16m of cash (61.8% of £26m).

For this he will have paid £9m and foregone cash on THAL's existing holding (by allowing LSR to distribute, say 32p a share) of £6.7m = £15.7m. Then there are fees on top..

Again, hardly worth it.

[hindsight] 13/2/2019 09:03

If a compny is being run like a dictatorship, strange is quite normal

[tiltonboy] 13/2/2019 08:20

He thinks he can extract value by using LSR as a shell

[stemis] 13/2/2019 07:57

It is indeed a strange business. Until we see the detail of the offer (i.e. how much you would get per LSR share if you elect for 100% cash) then it's all a bit of a guess. If it was 30p and only 30m shares accept the offer (which would leave THAL with 61.8% of LSR), there might be no issue of THAL shares. That would be a marginally good deal for THAL shareholders (gaining another 36.4% of LSR at a discount to NAV) but hardly worth the effort surely for a benefit of around £600-900k (2-3% of the NAV of THAL).

[scburbs] 12/2/2019 20:57

How could THAL shareholders support the acquisition of cash in a massively dilutive manner? Much better that they don’t get the chance!

It’s a discounted rights issue, but they would rather go to unwilling LSR shareholders almost certain to be desperate to sell than to THAL shareholders to raise the money! Shows how much support they think they have from their own shareholders, ie know they couldn’t get the backing to raise that cash.

Terrible for THAL shareholders and terrible for LSR shareholders. Might work for someone?

[topvest] 12/2/2019 18:07

It’s all a bit odd really. If it wasn’t for the preference share stunt, Soukup would probably have much greater support for his move on LSR. It was that stunt, that has made him uninvestable. He has shot himself in the foot!

[rbonnier] 11/2/2019 23:44

The Soup Dragon is one sure cool cookey !

[hindsight] 09/2/2019 12:14

Thanks for the link frazboy, will have a read tonight

[frazboy] 08/2/2019 16:39

hindsight, from 2004, you've probably seen it before:



worth a read generally, but I note in particular this quote:

"If Soukup ends up running the business, it will probably buy something else rather than returning existing cash to shareholders. "That would be the least inventive thing to do," he reckons."

[hindsight] 08/2/2019 16:01

Frazboy, question also has to be, would you believe the explanation
Tend to think actions always speak louder than words, so a couple of results comments from the chairman

I have been asked by a number of shareholders whether the
Board would consider returning cash to shareholders. I would
like to assure shareholders that the Board constantly monitors
the Company’s cash needs and will continue to return cash
either through the ongoing share buy-back programme or
through a planned reduction in capital, as and when deemed
appropriate. I would, however, point out that any premature
return of capital could jeopardise Management’s ability to
realise targeted returns on the Company’s current holdings.

Some pesky shareholders have appeared, must introduce the preference share voting issue


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

Think that may need to read 'one Thalassa shareholder'

[cockerhoop] 08/2/2019 11:04

You do have to laugh, the Preference Share issue has cost THAL a stack in professional fees, knocked over 25% off the share price resulting in higher dilution for DS buying LSR than could have been achieved without it and because not that many shares were sold since October it's hardly increased DS's voting influence.

Man's a genius!

[frazboy] 08/2/2019 10:36

but DS would never of pulled off a placing - no one would increase his AUM. the guy paid himself (via the remuneration committee, of course), $730,000 in 2017, and probably significantly more in 2018 (admin expenses for Thalassa were $4.5m but as far as I know there's no breakdown of what that money was spent on).

[stemis] 08/2/2019 09:50

You need to work through the oonsolidation of the two groups, it's not quite as simple as that.

Nevertheless this bid is a complete vanity project for Soukup, diluting THAL's NAV/share just to hide the fact that he made a poor investment that hasn't worked out. He'd be better just letting LSR distribute THAL it's £7m, instead of effectively issuing 16m shares just to get his hands on another £11.7m.

It's effectively a placing at 73p with the added complication of taking responsibility for winding up the rest of the LSR assets.

[hindsight] 07/2/2019 09:09

NTV, I agree but was merely pointing out that Thal shareholders have a possible swap if happy holding Thal paper, sure they would get a lot of offers in the lsr mix and match option
If the deal happens, hopefully not, then thal shares in issue will roughly double so the discount will in effect roughly halve
If Mr Market demands the same discount then thal shares will have a way to fall

[rndm355] 06/2/2019 18:29

Thalassa makes an offer it hopes Local Shopping REIT can't refuse

[hindsight] 06/2/2019 14:51

For each Offer Share: 14.64 pence in cash

and
0.26 Thalassa Consideration
Shares

Taking the 27.5p lsr price then ex cash it values thal shares at 50p

[frazboy] 06/2/2019 14:35

and there it is...

[frazboy] 06/2/2019 14:18

"The THAL Board also wishes to advise the market that the preference shares issued on 30 September 2018 and announced on 4 October 2018, will be cancelled upon successful completion of the LSR offer"

From Thalassa's results. Offer clocking is ticking unless an extension is requested.