Scisys (LON:SSY) takeover

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14th Jun '19 by InvestorJohn

8 comments 960 reads

Repost of my Comment in SCVR - I thought we could collate our discussion here

Scisys (LON:SSY) has recieved a takeover approach!

Under the terms of the Acquisition, SCISYS Shareholders will be entitled to receive for each SCISYS Share 254.15 pence in cash
The Acquisition represents a premium of approximately 24.6 per cent. to SCISYS' Closing Price of 204.00 pence yesterday

Happy Days! Nice Surprise but it means goodbye to the future earning potential at the same time...

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InvestorJohn

Premium Member

Visit my Website www.investorjohn.co.uk where I detail all my holdings Private Investor with over 20 Years experience in the UK Stock market. Currently managing my own SIPP which has more than doubled in value with no additional contributions since I started. Also an ISA and more recently a Company Trading account. more »

8 comments

InvestorJohn

14th Jun '19

The Consideration is in addition to the payment of the final dividend of 1.73 pence per SCISYS Share for the period to 31 December 2018 approved by SCISYS Shareholders at the annual general meeting on 6 June 2019 (the "Declared Dividend"), which will be paid on 26 July 2019 to holders of SCISYS Shares who are on the register of members at the close of business on 28 June 2019.

William K

14th Jun '19

Many thanks InvestorJohn. I wasn't sure what had happened until I saw your post. I'm long on these so it's good news - in the short term although these were one of my 'buy and hold' intentions.

InvestorJohn

14th Jun '19

Yes wilkonz I think we all feel the same - not complaining but we were happy holders
I had only a small starter position so no big deal really

LongValue

14th Jun '19

At one level, as an investor in the company, this is a welcomed event. At the same time, the company operates in growth areas - most obviously in the Space industry - where there are considerable barriers to entry. And where its revenue is "Sticky". It's profitable and dividend paying and has many avenues for growth. With its re-domiciling to Dublin at the end of last year, it made itself Brexit proof. So it had an ability to win work on a variety of European Space projects, most notably Galileo, and at the same time, it was in pole position to win work with any British Space programme. Basically, I think that it's being sold too cheaply.

William K

14th Jun '19

Me too. I bought a few as a result of Simon Thompson's recommendation in IC on 21st January 2019 when they were 175.

InvestorJohn

14th Jun '19

I bought in at the start of November 2018! I can't recall exactly why I bought in at that time - obviously the fundamentals looked good and EPS growth looked strong

I really must get better at recording the rationale behind my investment entry and exit points it will help me learn from my wins and also my losses... I sometimes print the stockopedia share report screen and record notes and highlight key financials - anyone else have any good techniques here?

LongValue

14th Jun '19

Putting this into perspective, roughly one-third of its turnover comes from its Space division. Some £21.3 million. Its re-domiciling to Dublin allows it to bid for the EU's Space programme work. Britain has contributed around £1.2 billion to develop the Galileo project. Since the re-domicile, the company has won substantial work with the EU Space programme. More than enough to vindicate the £700,000 cost of the re-domicile. Britain has earmarked £92 million to research an alternative to Galileo. The estimated cost is £3-5 billion.

Whether or not the UK develops an alternative to Galileo, Scisys appears to be in a very strong position. It stands to benefit either from the EU's programme or the UK's efforts and it may possibly benefit from both. And that's one of the reasons why I think that a price tag of £78.9 million is simply too low.

InvestorJohn

14th Jun '19

Maybe we should be investing into CGI inc. (Ticker NYQ:GIB) then to capitalise on this opportunity?

(On the basis that the new owners may pick up some of the business that Scisys (LON:SSY) would have targeted)

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Scisys (LON:SSY) takeover

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InvestorJohn

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