Good morning, it's Paul here with the SCVR for Thursday.

Timing - TBC

Agenda -

Best Of The Best (LON:BOTB) (I hold) - Secondary placing. Directors sell down about a third of their (unusually large) shareholdings at £24, a surprising discount.

Card Factory (LON:CARD) - banks grant another 1 month waiver of covenant breaches. Why has share price been so strong, when an equity fundraising is so badly necessary? Very high risk in my view.

£MEAL - I've reviewed the AIM Admission Document.

D4t4 Solutions (LON:D4T4) (I hold) - 6 contract wins & "comfortably ahead" trading update for FY 03/2021. Looks good.

Wey Education (LON:WEY) - Recommended takeover bid at 47.5p, a nice 46% premium.

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Best Of The Best (LON:BOTB)

(I hold)

Share price: 2400p (placing price)
No. shares: 9.38m
Market cap: £225.1m

Proposed Secondary Placing - RNS issued at 18:00 yesterday

For anyone not aware, a secondary placing is where existing shares in the company are sold by a large shareholder(s) (often founders/management, or a cornerstone investor like a private equity firm). So the company itself doesn’t receive any money, and the number of shares in issue remain the same. This method is used when the market liquidity is too small to soak up the number of shares that the seller wants to sell. So it avoids market disruption, by placing large blocks of shares with institutions, in one go.

In this case, there were market rumours recently that, once the FSP (formal sales process) fell through without a deal, management might sell some of their very large shareholdings to institutions in a placing. So this secondary placing didn’t come as a surprise.

Details -

  • 2.5m placing shares, at £24 per share, £60m worth. 26.7% of the total company.
  • 41,666 shares at £24 = £1.0m also available via Primary Bid - very small, so just a fig leaf offer really. I think they should have done a lot more through Primary Bid, which would have improved liquidity by increasing the private investor shareholder base.
  • Finncap organised the deal.

Result of Secondary Placing - RNS issued at 07:00 today

Placing was oversubscribed - they usually are, because people often apply for more than they actually want, expecting to be scaled back. Also the price discount here made this placing…

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