Good evening,
I'm just catching up on one or two things from Friday.
NetDimensions Holdings (LON:NETD)
Share price: 97.5p (up 24.2% on 3 Feb 2017)
No. shares: 51.3m
Market cap: £50.0m
(at the time of writing, I hold a long position in this share)
Proposed recommended cash offer - this company has been in play since early Oct 2016, when it told the market that it had received an unsolicited takeover approach. So there has arguably been a bid premium in the share price since then.
I reported here on 23 Dec 2016 that another update from the company seemed to give a steer that the takeover approach was likely to succeed. The phrase "advanced discussions" suggested that a deal would probably happen. That seemed to me a pretty good point to go long, for the bid.
A recommended cash offer of 100p has been announced.
The bidder is Learning Technologies (LON:LTG) - so as usual I've been checking them out, to see how likely the deal is to go ahead. LTG already has 57.15% of NETD shareholders onside. Interestingly, those commitments drop away if a competing offer of 110p+ is received. It sounded as if more than one party was originally interested, so I wonder if this might be a case like Lavendon, where multiple competing offers are tabled?
On the downside, LTG needs to complete a Placing in order to raise the bulk of the funds for the takeover of NETD. So there's a chance something could go wrong there, if it's not able to raise the funds. However, I doubt it would have launched this takeover approach without being very confident of getting the Placing away. But you never know for sure, until the money's in the bank.
Timing - the deal is expected to complete in 2 months. So there's an opportunity cost of having money tied up here, which could be deployed buying something else.
My opinion - this looks a decent outcome for NETD shareholders. Personally this is only a small position for me, so I really can't decide what to do - whether to bank most of the profit now, or hold out for the full 100p per share? There's always the possibility of a higher competing offer. However there's also the downside risk that the 100p bid could fall through…
