The Local Shopping Reit Share Discussion Threads

[frazboy] 13/3/2019 06:53

Maybe kooba. But then again I see little in the way of information from Thalassa as to what they intend to do with the money. Just some vague text in the chairman's statement. In other words there's far mor ambiguity over Thalassa's intentions than the distributable NAV of LSR

[kooba] 13/3/2019 06:23

Rather think it's the company's responsibility to update shareholders as to net realisable distribution estimate rather than shareholders having a stab at it ...as far as I am concern there is guidance in the market in excess of 33p ..if this is not the case then this latest bid at distribution is misleading especially with a background of a hostile bid.

[frazboy] 12/3/2019 20:12

I agree that the information in LSR announcements could be clearer but there is enough there to come to a reasonable price estimate. Tilton has guessed at 30.something (IIRC) I would guesstimate 31.something. The legal costs being incurred and the ongoing PLC costs (beyond the original wind up date) are tricksy. The NAV at the time of the Liquidation vote/year end was 33.6p and included all wind up costs and costs expected to be incurred for the remaining life of the company - the accounts were not prepared in the usual ongoing fashion. However, there was still £5m of property on the books at that time so some discount needs to be accounted for.

[stemis] 12/3/2019 19:31

I've had a quick scan through the defence document but I don't have time tonight to read it thoroughly. Maybe I'm wrong but I cannot see any update of net asset position or update of likely return to shareholders in the event of a liquidation. The defence and indeed court application for a winding up aren't going to be for free. Are we just supposed to take on faith what the alternative value to a Thalassa bid would be?

If this is the case then that's very, very poor...

[nicholasblake] 12/3/2019 19:06

I had assumed a facilitative mix and match, whereby if holders of only 25% accepted they could have all got cash.
That would have been much trickier to defend.

[frazboy] 12/3/2019 19:03

That's correct Nicholas - otherwise their is no (real) logic in the Thalassa bid

[nicholasblake] 12/3/2019 19:00

If this is right: "Under the Mix-and-Match Facility in Thalassa's Offer, LSR Shareholders will only be entitled to receive a greater proportion of their Offer Consideration in cash IF THERE ARE EQUIVALENT AND OFF-SETTING ELECTIONS by other LSR Shareholders to receive a greater proportion of their Offer Consideration in New Thalassa Ordinary Shares. This would be the case even if the £9 million cash element of Thalassa's Offer has not been fully utilised." then the THAL offer is pretty dismal.

[kooba] 12/3/2019 18:58

From Dec results I think this is last and therefore ongoing guidance?Net Realisable ValueIn the announcement published on 11 October 2018, we provided a range for the Company's net realisable value of between 33.0 and 34.5 pence per share. As a result of auction sales performance and market trends since then we anticipate that the distribution is likely to be at the lower end of that range. The final amount will be determined by the sales of the residual property assets and the outcome of the general meeting referred to below.So since then properties sold and some remain...what is the current prospective net realisable value per share ? If there is a change from above guidance then it is essential they inform shareholders as it would be material in the context of evaluating proposals especially in a bid situation.It's also rather important to make shareholders aware of any material change in guidance especially if your only business is winding up and distributing assets.Any thoughts?

[stemis] 12/3/2019 18:29

are we still to believe they are talking lower end of 33-34.5p range net to shareholders?

At 30 September 2018 NAV was 33.6p/share.

How it's gone since then is difficult to say as deciphering their property sales updates is like translating the Rosetta Stone...

[kooba] 12/3/2019 17:37

Well it's all going onA standard listing means that a company can passport to a European exchange ie Luxembourg (value option) a separate listing application would cost many £100,000s so the company has Brexit proofed with a European listing it seems to me , I doubt for any immediate purpose as they have not issued any paper there, but it gives them some options if UK sinks into the Middle Ages on leaving the EU. So guess that's why they made that whole move.The preference issue I was never keen on but as explained in the listing prospectus it was designed to protect the company from hostile approach ( stake building I guess as they were lining up this LSR move ? ) I'm pleased they disappear if the TO goes through but since limited shares changed hands while they were about had little real effect on the overall shareholder voting numbers really.LSR idea...I would rather need to know how much they were going to distribute before even being able to consider the liquidation distribution proposal against the offer on the table ,I can't see a figure anywhere..anyone? are we still to believe they are talking lower end of 33-34.5p range net to shareholders? I keeps on dropping as far as I can tell.If they can magic up a offer better THALs offer ...I'm in!!Fair to say though that there is no love lost between LSR board and THAL board...shame an amicable solution was not negotiated by LSR with their largest holder !!

[frazboy] 12/3/2019 14:38

anyone want to comment on substantive reasons for Thalassa having listed in Lux (news just out)?

and does anyone know if the bid timetable allows for an update on acceptances?

[gfrae] 12/3/2019 09:16

Maybe not if you take into account pre and post NAVs of THAL, and secondly whilst THAL have put in a new buy back facility they have not committed to any particular price.

[varies] 11/3/2019 17:09

SteMis
Thanks.
It seems that either LSR shares are too cheap or THAL shares too expensive.

It will be interesting to see if LSR directors can mount an effective defence.

[stemis] 11/3/2019 13:59

Your figures look correct. The alternative would be to elect for all THAL shares in accepting the bid for your new LSR shares. For every 100 LSR shares you'd get 43.96 THAL shares so you'd be selling 36 THAL shares to eventually get 43.96 back! 7.96 shares for nothing!!

[varies] 11/3/2019 13:53

I have now completed my "arbitrage". For every 36 THAL sold I have bought 100 LSR.
If the takeover proceeds, I will receive 26 new THAL shares and £14.64 per 100 LSR.
So I will be getting £14.64 for the 10 THAL shares lost, valued currently at £8.00.
Have I got this wrong ?

I am still left with about 60% of my THAL holding. Perhaps I ought to proceed in the same way with these.
Curiously enough I have been unable to buy LSR through Barclays Smart Investor but have done so through Interactive Investor.

[stemis] 11/3/2019 12:35

Strange therefore that they haven't included a proforma combined balance sheet in the Offer Document.

I had a quick bash and noticed (I think) that there is an error in the Offer Document. They disclose the proforma combined NAV as 105.8p whereas I think it should be 111.2p. The error (if anyone wants to have a look) is in section 6f. On consolidation they deduct their share of net assets of LSR (£7.1m) whereas they should deduct the actual value in their balance sheet (£5.3m).

Current LSR share price (28.6p) implies that the value of THAL shares will be 54p. That's a pretty hefty discount to NAV, considering most of it is cash.

[frazboy] 11/3/2019 12:08

i don't think anyone is disagreeing with you Stemis. All or nothing.

[stemis] 11/3/2019 12:02

I imagine that either this will fail or that THAL will end up with all of LSR. I can't see why anyone would want to remain in a minority position in a THAL controlled LSR with an uncertain strategy. If you are going to be exposed to Soukup's investment 'skills' you might as well be in the same vehicle in which he holds his shares.

[frazboy] 11/3/2019 11:36

Gfrae,

"Prefs were issued I think they said to avoid a takeover" - not sure I totally believe that (I realise you're not the source for this), but the point you make about being main market listed, and that this may be more acceptable to LSR holders, i agree with.

Thalassa will be vulnerable to a cash offer immediately after the LSR take over (more cash in the shell, similar discount presumably, means more cake for a third party), if DS cannot block it. Will it happen...? Probably not. I would be very supportive, at, say, 90p but I guess Thalassa's original shareholders won't be, and will want more (including of course DS and the trust fund, although they will be notably diluted).

It will be fascinating to see the share price action - if this goes through - when LSR shareholders try to pile out the door, and, when, presumably, the buyback kicks in with gusto. I guess one advantage of an aggressive buyback will be that DS will have a blocking stake pretty quickly, although this is of limited use in a bid situation.

I'm sure there are plenty of twists and turns yet to come.

[varies] 11/3/2019 09:32

I too am perplexed by THAL's need for more cash and the takeover of LSR is a curious way to raise this.
At present THAL holds cash from the sale of WPG and expects to receive more from its Earn Out agreement with WPG's purchasers.
It also owns a business developing Flying Nodes intended for research of the ocean floor. I won't attempt to provide further details of the cash or the Earn Out or the Flying Nodes as these are available on THAL's web-site.

THAL has been looking for a partner for the Flying Nodes business whose further development requires substantial funds. Mr Soukup has said that THAL would not finance this on its own.
Could it be that he has changed his mind and that this is why THAL needs more cash ?
Certainly he has said nothing yet to suggest this.

For my LSR shares recently bought I will probably go for the share option since I have sold THAL shares to fund this and am seeking to replace them at a lower price. I must confess to misgivings about THAL and Mr. Soukup like many others on this thread.

[hindsight] 11/3/2019 08:59

You could be right Frazboy but the below I read in Thal chairman comments was the reason for my thinking.

"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."

I also do not accept the explanation in the offering document as there would be more cash resources

The Thalassa Directors believe that in the circumstances of Thalassa acquiring control of LSR and thereby deploying a certain amount of its cash resources, the original rationale and benefit of the Preference Shares falls away.

[frazboy] 10/3/2019 20:44

Hindsight

Were the preference shares not to give DS enough voting rights to swing a Thalassa vote to take over LSR - but due to lack of turnover of the shares (thus the preference shares failed to have their intended impact) he had to go through with a main market listing, which, odd as it may seem doesn’t require him to get shareholder approval for the take over. Had Thalassa been AIM listed he would have had to do get approval.

[hindsight] 10/3/2019 20:05

until (1) he instigated the issue of preference shares that lapse on the sale of the ordinary shares to which they are attached, thereby consolidating his hold over the company
I agree with SteMis that a shareholder revolt by THAL shareholders after the LSR takeover is completed (if this comes to pass) would deserve our support. I suspect, however, that Mr Soukup would find some way of suppressing it.

Varies, this is what I keep coming back to, why decide you need to have the preference share stitch up protection racket because pesky shareholders are revolting and then put yourself in a posistion with even more pesky shareholders with even more power. Something doesnt add up