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Interserve open offer

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EssDeeAitch
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Re: Interserve open offer

#207025

Postby EssDeeAitch » March 11th, 2019, 5:30 pm

rich1576 wrote:
Can someone give some laymans advice on what course of action would be the best. Default option is do nothing and option 2 is exercise the subscription shares in full or in part?

Please help


I can't give advice but I can pass on the recommendation that the Investors Chronicle gives in their weekly "Company Results" section and is for holders to approve the deal.

If this is sound advice or not, I just don't know. I am not a shareholder and have no vested interest, but the magazine is as respected as any investment mag.

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Re: Interserve open offer

#207036

Postby Bouleversee » March 11th, 2019, 6:23 pm

And did the IC mention the fact that the directors won't be taking up their Open Offer entitlements? If they are not, why the heck should I and if my shares which are already worth almost nothing will become completely valueless if their recommendation is voted through, why should I make any effort to vote for it? Am I missing something?

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Re: Interserve open offer

#207043

Postby EssDeeAitch » March 11th, 2019, 6:54 pm

Bouleversee wrote:And did the IC mention the fact that the directors won't be taking up their Open Offer entitlements? If they are not, why the heck should I and if my shares which are already worth almost nothing will become completely valueless if their recommendation is voted through, why should I make any effort to vote for it? Am I missing something?


No. But as I said, I offer no personal advice only pointed to what the IC said. I am sure rich1576 will be glad of your note.

rich1576
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Re: Interserve open offer

#207134

Postby rich1576 » March 12th, 2019, 9:31 am

Both conflicting views so still a little confused, but thanks EssDeeAitch and Bouleversee.

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Re: Interserve open offer

#207155

Postby Bouleversee » March 12th, 2019, 10:57 am

Approving the deal by voting for it is not the same, of course, as taking up one's entitlement in the public offer. Did the IC advise on the latter?

Am I right in thinking that even with the marginally improved proposal from IRV, my existing shares would still be worth nothing if it were voted through whether or not I took up my entitlement and that taking up the latter would just be risking fresh money? That is what happened at Lonmin.

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Re: Interserve open offer

#207170

Postby 88V8 » March 12th, 2019, 11:40 am

I'm being asked to stump up £18k to avoid dilution, so IRV can pay down its debts. And after doing so, there's every possibility that my shares will still be worth peanuts.
The directors are not on board, why should us small fry chip in. If that's the best they can offer us, let them go bust.

I used to hold Lonmin. At least that was one I got out of.

V8

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Re: Interserve open offer

#207171

Postby Alaric » March 12th, 2019, 11:43 am

Bouleversee wrote:Am I right in thinking that even with the marginally improved proposal from IRV, my existing shares would still be worth nothing if it were voted through whether or not I took up my entitlement and that taking up the latter would just be risking fresh money?


"Nothing" may be an exaggeration, but not by much.

The Company itself is using the term "deleveraging"

https://www.interserve.com/investor-cen ... aging-plan

It looks as if they need shareholder's approval, but not shareholder's new funds as that already seems secured by writing off debts and converting them to equity.

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Re: Interserve open offer

#207881

Postby Alaric » March 15th, 2019, 1:19 pm

Alaric wrote:It looks as if they need shareholder's approval, but not shareholder's new funds as that already seems secured by writing off debts and converting them to equity.


The Guardian is now reporting that the proposed restructure has failed to gain shareholder support.

https://www.theguardian.com/business/20 ... eject-deal

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Re: Interserve open offer

#207884

Postby daveh » March 15th, 2019, 1:29 pm

Alaric wrote:
Alaric wrote:It looks as if they need shareholder's approval, but not shareholder's new funds as that already seems secured by writing off debts and converting them to equity.


The Guardian is now reporting that the proposed restructure has failed to gain shareholder support.

https://www.theguardian.com/business/20 ... eject-deal


Which presumably means the shareholder lose everything. The BBC https://www.bbc.co.uk/news/business-47582406 are reporting that under the deal that has been turned down the shareholders would have retained ~5% of the company. With the deal turned down the company will go into administration and a previous BBC report suggested:

Accountants EY will be appointed administrators, they will then sell the company for a nominal amount to the current lenders (a mixture of banks and bond holders) who will own 100% of the new company.

https://www.bbc.co.uk/news/business-47513850

So by voting down the deal the shareholders who voted no have lost any chance of retaining anything of the company. What did they hope to gain by voting no?

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Re: Interserve open offer

#207887

Postby jackdaww » March 15th, 2019, 1:32 pm

i think its gone --- the way of several other popular HYP picks.

:( :(

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Re: Interserve open offer

#207915

Postby Bouleversee » March 15th, 2019, 2:17 pm

daveh wrote:
Alaric wrote:
Alaric wrote:It looks as if they need shareholder's approval, but not shareholder's new funds as that already seems secured by writing off debts and converting them to equity.


The Guardian is now reporting that the proposed restructure has failed to gain shareholder support.

https://www.theguardian.com/business/20 ... eject-deal


Which presumably means the shareholder lose everything. The BBC https://www.bbc.co.uk/news/business-47582406 are reporting that under the deal that has been turned down the shareholders would have retained ~5% of the company. With the deal turned down the company will go into administration and a previous BBC report suggested:

Accountants EY will be appointed administrators, they will then sell the company for a nominal amount to the current lenders (a mixture of banks and bond holders) who will own 100% of the new company.

https://www.bbc.co.uk/news/business-47513850

So by voting down the deal the shareholders who voted no have lost any chance of retaining anything of the company. What did they hope to gain by voting no?


There are several things about this which I don't understand: 1) What would that 5% have been worth in terms of the price of the existing shares held? ( After Lonmin did a similar exercise, the original shares were worth virtually nothing after massive dilution and the new shares also went down). 2) If the directors weren't going to take up their entitlement to the new shares, how did they expect other shareholders to do so and are their existing shares wiped out as mine are or have they negotiated a deal whereby they get a load of shares in the new company which will emerge from the pre-pack? 3) How come they keep their jobs when it's their bungling which has brought the company to this pass? 4)Why did we not get a chance to vote on Coltrane's proposal which would have given shareholders a better deal? 5) Why do shareholders count for nothing and it's only creditors and staff and their pensions which are taken care of? What about the pensions of the shareholders?

It's a mug's game but what alternative is there these days?

(edited 15/5 to correct quote structure. Raptor.)

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Re: Interserve open offer

#207925

Postby daveh » March 15th, 2019, 3:13 pm

Bouleversee wrote:There are several things about this which I don't understand: 1) What would that 5% have been worth in terms of the price of the existing shares held? ( After Lonmin did a similar exercise, the original shares were worth virtually nothing after massive dilution and the new shares also went down). 2) If the directors weren't going to take up their entitlement to the new shares, how did they expect other shareholders to do so and are their existing shares wiped out as mine are or have they negotiated a deal whereby they get a load of shares in the new company which will emerge from the pre-pack? 3) How come they keep their jobs when it's their bungling which has brought the company to this pass? 4)Why did we not get a chance to vote on Coltrane's proposal which would have given shareholders a better deal? 5) Why do shareholders count for nothing and it's only creditors and staff and their pensions which are taken care of? What about the pensions of the shareholders?

It's a mug's game but what alternative is there these days?

(edited 15/5 to correct quote structure. Raptor.)



I'll start off by saying I didn't hold and have not held Interserve in the past, but did hold CLLN when it went to the wall, so I feel for presnt Interserve holders.

I'm assuming that if shareholder were to get 5% of Interserve and banks and bond holders 95% then theoretically the share holders will have 5% of the new company, but I'm not quite sure how that would be valued. My problem is that I'm unsure how the value of the company would have changed if the deal had gone ahead. For example if the company was worth 10million before the deal then, even with a large percentage of the debt turned into equity, is it worth more than the 10 million, if not instead of owning 100% of 10million you now own 5% of 10million and have lost another 95%. But would the company be worth more with the debt problems "sorted" so would the comapny have been worth say 20 million if the deal had gone ahead so now your shares have "only" lost another 80%.


If I'd been a shareholder I would have voted for the deal (at least I might have got something for my shares), but would not have put in more money.

I hope the directors are not getting a load of shares in the new company and would hope that they are turfed out by the new owners as they are responsible for the company failing.


What was Choltrane's proposal, not being a shareholder i hadn't realised they had made a counter offer?

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Re: Interserve open offer

#207928

Postby Dod101 » March 15th, 2019, 3:28 pm

I am sorry for all those anguished shareholders. It would not be helpful for me to say I told you so, but the whole sector is best avoided. It is just too prone to a wing and a prayer type of accounting and management. Carillion, Mitie, Interserve, Kier... who is next? Even if the company does not go bust the dividend is usually gone for some time.

Dod

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Re: Interserve open offer

#207931

Postby Bouleversee » March 15th, 2019, 3:40 pm

daveh -

I don't know what Coltrane's proposal was precisely, not having been supplied with any details by my ISA manager. I just know I read in the press that they had come up with a better proposal in that it gave existing shareholders a higher percentage of the share capital. I can't find anything about it on the IRV website, but I did find the following which suggests we will now be wiped out:

"Our plan preserves some value for shareholders. This will not be the case if the proposals are voted down. It is the only plan with the support of all of our lenders and the Pension Trustee. It is a plan that secures the future of a business that, with a firmer financial footing, will be successful. It is a plan that secures 68,000 jobs, pensions and public services.
If shareholders do not support our plan we have taken steps to prepare for an alternative transaction to protect the business and preserve value for our creditors, customers and our suppliers.
However, this is an outcome we would much prefer to avoid as it would likely result in no return for shareholders and it is more costly and disruptive to Interserve."

I wouldn't have taken up my entitlements or even a proportion of them. I think IRV will struggle to get new business as they seem to make such a hash of things as I did myself in this connection. Should have bitten the bullet and got out before things got so bad. I wonder if they will get any more govt. contracts. I agree that the management should be given the boot.

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Re: Interserve open offer

#207936

Postby Bouleversee » March 15th, 2019, 3:47 pm

Dod101 wrote:I am sorry for all those anguished shareholders. It would not be helpful for me to say I told you so, but the whole sector is best avoided. It is just too prone to a wing and a prayer type of accounting and management. Carillion, Mitie, Interserve, Kier... who is next? Even if the company does not go bust the dividend is usually gone for some time.

Dod

It seems to me that wing and prayer accounting and management can crop up in any sector (cake,anyone?) and without a crystal ball nothing is safe. As they say, the past is no guide to the future. Luck plays a large part and I have had some good luck as well as bad. I have learned, however, not to chase high yields or at least not to add to existing holdings after a fall.

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Re: Interserve open offer

#207937

Postby monabri » March 15th, 2019, 3:48 pm

daveh wrote:
I hope the directors are not getting a load of shares in the new company and would hope that they are turfed out by the new owners as they are responsible for the company failing.



Debbie White tried but failed. The problems left by Adrian Ringrose were just too much ( he's got a new job so he's alright Jack! ).

Coltrane wanted rid off ALL the BOD except for Mrs White.... I can see why.

Low margin business..one significant problem and it goes A over T.

In due course, there will be more coming out of the woodwork.

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Re: Interserve open offer

#207945

Postby IanTHughes » March 15th, 2019, 4:06 pm

jackdaww wrote:i think its gone --- the way of several other popular HYP picks. :( :(

My HYP is going from strength to strength. You must be doing it wrong


Ian

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Re: Interserve open offer

#207951

Postby jackdaww » March 15th, 2019, 4:39 pm

IanTHughes wrote:
jackdaww wrote:i think its gone --- the way of several other popular HYP picks. :( :(

My HYP is going from strength to strength. You must be doing it wrong


Ian


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

why?

i got out of interserve nearly 10 years ago , and carillion ( at a profit ) long before it went.

i saw the warnings on here long before then , engaged brain , and avoided low margin contractors .

some unfortunates have lost heavily , possibly by following the cosy complacent mantras on this board.

HYP is fine for many , PYAD's original message said individual judgement is applicable.

:(

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Re: Interserve open offer

#207953

Postby Arborbridge » March 15th, 2019, 4:46 pm

I wish I could remember who it was introduced me to Interserve on here (well, on the Fool). I'd never even heard of it until then.

Jackdaww lost out heavily by getting out 10 years ago, :lol: for it was my number one share for TR until recently. A little bit of charting would have gone a long way in that case.

Arb.

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Re: Interserve open offer

#207954

Postby IanTHughes » March 15th, 2019, 4:49 pm

jackdaww wrote:
IanTHughes wrote:
jackdaww wrote:i think its gone --- the way of several other popular HYP picks. :( :(

My HYP is going from strength to strength. You must be doing it wrong

why?

i got out of interserve nearly 10 years ago , and carillion ( at a profit ) long before it went.

i saw the warnings on here long before then , engaged brain , and avoided low margin contractors .

some unfortunates have lost heavily , possibly by following the cosy complacent mantras on this board.

HYP is fine for many , PYAD's original message said individual judgement is applicable. :(

I repeat:
My HYP is going from strength to strength.

So, your oblique reference to two, count them TWO, failures, within the same Business Sector to boot meaning no HYP would have been exposed to both, means what exactly? Shares prices can go down as well as up?

Ian

Moderator Message:
I have edited this post. Please remember TLFs rules on personal attacks. Any further posts will be removed entirely. Raptor.


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