Wagon Share Discussion Threads

[robizm] 07/6/2008 17:19

Sharewatch: A wobbly ride for Wagon

something from ft

By Michael Kavanagh

Published: June 6 2008 18:57 | Last updated: June 6 2008 18:57

Are the wheels falling off at Wagon? The car component maker lost more than half its share value this week after it announced a deeply-discounted 10-for-1 rights issue. News of the issue, pitched at 4p compared with Tuesday's close of 14½p, coincided with Wagon's annual results which showed a sharp reduction in losses from £99m to £1.9m. In spite of the improvement, the rights issue has been harshly received. The shares, which were 262p in April 2006, fell to 6p yesterday – generating a 60 per cent loss since midweek. The scheme, aimed at raising £49m, is being backed by leading US shareholder and board member Wilbur Ross, dubbed "the king of bankruptcy" for his interest in distressed businesses and assets. Shareholders now face the prospect of their shareholdings being diluted as Ross increases his grip. Shareholders who declined to bail out may now wish, albeit reluctantly, to keep right on to the end of the road.

[aleman] 07/6/2008 13:06

This is not a small company with turnover £700m and rising. Why can I find no media coverage?

[robizm] 07/6/2008 12:50

Why 2p stockscreeners? it has a market cap of 5 million and will raise 50 million cash. yes it has debts but also has assets over those debts. it is winning new contracts and will have a better 2009/10 if mr r does not take it over before then. you know there will be new management bought . the price will depend on the top 5 shareholders who own over 50% (they will have been asked before the rights). i have bought and would buy more if i had spare cash to take up rights (i admit they are screwing existing holders really bad)

[stockscreeners] 07/6/2008 11:47

2p on the cards here and thats generous.

[hybrid07] 07/6/2008 11:32

So it may not be so bad to buy at 5p expecting to buy 10 x the amount later?

[topvest] 07/6/2008 10:02

I think you can sell them in the market, not that they will be worth much!

[boystown] 07/6/2008 09:47

Have I got this right? The record date is June 26th, so investors can buy with a view to taking the rights up to then. I have just 5,000 shares, so I'll be asked to pay £2,000.

But if I don't take up the rights I get NOTHING cos they're nil paid rights? So they have me over a barrel?

Is this what is meant by nil-paid?

[topvest] 07/6/2008 09:22

I should add, in these desparate times, there is also some excellent opportunities for new investors with cash to invest.

[topvest] 07/6/2008 09:21

It is surprising the lack of press comment on this brutal attack on shareholders' interests. Absolutely desparate for shareholders! I suspect many may take up the rights though given it is at such a pathetic price. We have really reached the era of HIGHLY DILUTIVE rights issues. This is many times worse than the banks!

[robizm] 06/6/2008 21:42

there is a right issue at 10 new shares for every 1 held at 4p. in my view large shareholders are trying to buy this on th cheap by diluting down small shareholders. underlying business will improve in 2009/10 along with profitability

[hybrid07] 06/6/2008 20:20

Looking at these for the first time. Does anyone think they are a good buy at around 5p? I assume the market thinks they are set to go bust

Edit: what has happened in the last two days?

[hvs] 06/6/2008 19:34

Long Term LOSERS

[ch0ajl] 06/6/2008 18:01

Contrarian Capital Mgt 17,970,946 15.5%
WL Ross & Co 17,485,058 15.1%
Harbinger Capital Partners 12,077,354 10.4%
Howson Tattersall Investment Counsel 7,454,493 6.4%
Schroder Investment Mgt 6,060,000 5.2%
Bond Street Capital 4,614,751 3.98%

From WAGN website, quite a concentrated register of long term holders.

[napoleon 14th] 06/6/2008 17:48

Thanks, ch0

[ch0ajl] 06/6/2008 17:24

Oxford automotive deal has already happened, that's how Ross got his stake in WAGN.

[napoleon 14th] 06/6/2008 16:24

Takeover rules waived?! Interesting....

So this becomes a play on Mr Ross's ability to turn WAGN round.

I much prefer that & consider taking my rights more favourably.

[ihavenoclue] 06/6/2008 16:04

deanroberthunt - 6 Jun'08 - 13:48 - 940 of 948


from BB. rns

* A fully underwritten rights issue to raise approximately £300 million on the
basis of 16 new ordinary shares for every 25 existing ordinary shares at 82 pence per share..

and blow me now its 55p....

================================

that was known on monday ...

[davius] 06/6/2008 15:57

"The Takeover Panel has agreed to waive any obligation on any member of the Concert Party to make a mandatory offer under Rule 9 of the Takeover Code, subject to the approval of the Independent Ordinary Shareholders on a poll at the General Meeting."

Rob beat me too it.

[robizm] 06/6/2008 15:39

The takeover rules have been waived so he will end up with most of the company. I just bought at 5p for long term high risk high return share.

[napoleon 14th] 06/6/2008 15:05

By the way......



&:

"Oxford Automotive

Ross owns 25% of Oxford Automotive, a French company, which is in talks to be taken over by Britain's Wagon.[10]"

So he has another way of increasing his holding in WAGN.....

[napoleon 14th] 06/6/2008 14:52

A VERY CLEVER & PERFECTLY LEGAL HIGHJACK, IMHO!

So we have nearly a month to think this over....& pay by July 22nd.
Record date is June 26th, so anyone can buy with a view to taking the rights up to then.
The terms are financially crushing, as every share held = 40p in rights!
So if you hold 20,000 shares, you pay £8K...
The more recent the buy, the heavier the load.
Eg: a stake bought at 20p/share means you treble your exposure if you pay up!
@ 10p/share, that's x 5, @ 5p that's x 9!
How many peeps can afford that?

Ross is obviously looking to get a large stake;
just the sort of situation he likes.
Initially, I take that as a positive sign.
What happens after that is anyone's guess, as the larger his stake becomes, the more a takeover is likely.
A 30% holding for Ross = just 33% of the potential underwriting.

Questions:

1. Who are the main shareholders.
2. What prices did they buy at?
3. Will they take up their rights?
4. How do we find out?

If the instis. have loads of shares bought at much higher prices, they'll probably go along with this.

IMHO THIS IS THE VITAL POINT.

If they don't, Ross will end up with more than 30% of the capital & will be "forced" to make a bid, presumably at current levels or just a bit higher. Arrgggghhhhhhh!!!

[dumbarton2] 06/6/2008 14:35

The biggesdt investor ony needs 70% then its all over they can compulsary purchase the rest.

[tippingpoint] 06/6/2008 14:03

How did you know about the operation DRH??

No you are right, its never a foregone conclusion, but in BB's case the additional TPG investment and vicious financial sector battering meant extra city pressure I guess (and they may of course need the city support in the future).

This is a 10 for one rather than a 19 for 25, so acquiring on the open market is not feasible (probably in either case).

imho