Community

Share knowledge. Find answers. Ask questions.

Online Share Trading

Engage and learn about markets and trading online

scary offer! how does it work?

Reply
Newbie
Contributor
I see the late sens news and the offer is 38 cents. I expected at least an offer pushing the PE to about 5. This would have put the offer at about 70 cents. I paid more than that for my shares. I also see Wessel Van Zyl and I own about the same amount of shares. Anyone out there can give me any answers? Surely this offer will be declined? I didn't hold these shares for so long to take a knock. I guess I should have had more knowledge knowing this offer was always coming! Help anyone?
0 Kudos
Reply
24 REPLIES 24
TITO
Contributor
I also own more than a half a million shares am in the green at the moment but will loose out if I have to sell at thirty eight cents. The directors according to the sense has all declined the offer. So not sure what will happen in the end.
0 Kudos
Reply
Newbie
Contributor
I don't think any shareholder in their right minds would accept 38 cents as an offer. If the NAV is 167 cents you would think a realistic offer would be at least 50% of the NAV so about 80 cents. I have owned this share before the special divident and added again at 30 cents but my average purchase price is still sitting at 71 cents. I certainly hope to get close to this and I am more than happy to remain a shareholder. I think Esor will do well in the future. I guess we just need to hope for a good set of results which are due early next month. I am following the SENS news hoping to see an increase in HEPS. I guess time will tell......
0 Kudos
Reply
Frequent Contributor
This offer is rubbish. I think they're just making the offer because it's mandatory. To be honest, I would still be buying shares if it was 38c. I've been buying since the share was at 19c and have managed to get almost 1% of the company. I holding on till about R1.50.
0 Kudos
Reply
Super Contributor
YES ,I presume they are not serious in the amount of the offer.
0 Kudos
Reply
Highlighted
Super Contributor
A concern might be the market taking the share price down close to the offer price as seems to be happening now. Then they can pick them up on the open market anyway.
0 Kudos
Reply
Frequent Contributor
True. Although I think they have some decent competition in terms of buying. I'm still buying even at 40c. There's no way I will let go of this share for peanuts.
0 Kudos
Reply
Newbie
Contributor
I have to agree with you. At 40 cents I still rate this share as a good buy and I am prepared to add to my holding. I would feel a lot more comfortable if there was some SENS news regarding the trading update due already. If there is no SENS news this could also mean the results are not going to vary by more than 20%. If the results match the last results, this would be a great sign. I guess we will all wait for the powers that be to do their thing.
0 Kudos
Reply
Frequent Contributor
I'm also expecting good results. Previous set was actually fantastic if you strip out the adjustment for the contingent payment. I actually still think there's a chance that they get the contingent payment and that would add about R120m in cash to the balance sheet. For a company whose current market cap is around R170, that's a decent boost. I reckon it's worth the risk of foregoing the 38c offer seeing that the current management seem to have brought the company back to life.
0 Kudos
Reply
Frequent Contributor
*Correction, their market cap is around R170m, not R170.
0 Kudos
Reply
Frequent Contributor
Also, forgot to mention that they may be incorporating results from Tuboseal, so that may be reason for the trading update delay compared to previous years.
0 Kudos
Reply
Newbie
Contributor
Hi J12. It looks like we are both of the same opinion. I certainly won't be accepting an offer of 38 cents per share, in fact I have an offer to purchase in at that price to double my holdings. Thank you for the feedback. If I get any feedback I will let you know. About a year ago I questioned their decisions on their website and, believe it or not, Wessell Van Zyl himself called me to explain in more detail how they plan to go forward. Now THATS how you run a company and treat your shareholders! I am in for the long run. R1.50 a share will certainly help me forget about my holdings in Murray and Roberts!
0 Kudos
Reply
Frequent Contributor
One thing I can tell you for sure is that even if shareholders (by some freak of nature) vote to accept the offer, I will fight to keep my shares.
0 Kudos
Reply
Super Contributor
If they get agreement from enough shareholders to take their holding to 90% then the remaining 10% are forced to accept the offer.
0 Kudos
Reply
Newbie
Contributor
So if I read you correctly 90% of the outstanding shareholders have to agree to the offer? I already see that all the directors have stated they will not be accepting the offer. This is already about 10% of the outstanding shares. Add to this shareholders like myself and J12 and there is no possibility 90% will agree to the buyout. Do I have my stats correct? So if the above is correct, they cannot force us to sell at the 38 cents? Thank you for all the information. Highly appreciated!
0 Kudos
Reply
Frequent Contributor
Did a bit of reading on this. According to the SENS, 14.48% of shareholders have already provided irrevocable undertakings not to accept the proposal. With my shareholding alone, I can push the value to over 15% that refuse the offer. And according to the companies act, a resolution may not be implemented without court approval if it was opposed by at least 15% of the voting rights exercised. From there, I guess it's up to the court to force shareholders to sell, but I can't see how that would be fair.
0 Kudos
Reply
Super Contributor
So a rights offer in bed with the enemy???? The thot plickens.
0 Kudos
Reply
Frequent Contributor
Lol. Yes... the plot thickens. Although I don't think they're necessarily the enemy. I'm guessing Geomer is a valuable BEE partner. And as initially speculated, the offer was only made because it's mandatory. If it goes through, good for Geomer, but my guess is that nobody expects it to go through. In any case, it is possible to hold on to your shares even if the company is bought out. There's just a bit of legality involved. FYI Newbie, according to the companies act: "(8) The holder of any voting rights in a company is entitled to seek relief in terms of section 164 if that person— (a) notified the company in advance of the intention to oppose a special resolution contemplated in this section; and (b) was present at the meeting and voted against that special resolution." I've provided the notification. I just have to attend the meeting and I should be fine.
0 Kudos
Reply
Newbie
Contributor
Hey J12. Thank you for the information again. If you have logged on this morning you would have seen there is now a proposed rights offer at 38 cents a share. This is to cover the costs of the new company Esor just bought. I have pulled my offer to buy more shares now but will definitely follow my rights. Who knows which way forward. I am still anticipating the results due any day now!
0 Kudos
Reply
Super Contributor
The rights offer is being fully underwritten by Geomer. After taking those rights Geomer will own 51%+ of Esor. They know the existing board and friends are not going to take up the mandatory offer and also indicate in the sens regarding same that they see "no change" for the company going forward. I therefore don't think Geomer have any thoughts that the present offer will succeed. Either they just wont a strong investment/controlling interest or they will consider a better offer at a later date.
0 Kudos
Reply