winningstreak
19 Dec 2016
Re: Sunday Tel Comment I doubt if Palmar can be outsmarted. It would be like catching aneel in a bathtub, ws
stuffee
18 Dec 2016
Sunday Tel Comment Worth reading valuable comment in today's Sunday Tel on attempted MBO by Paul Palmar, the CEO, at 235p in cash and 35p of subordinated PIK loan notes. I have always been concerned the PIKs will yield zero value until all the massive new debt has been repaid and even then how can we be sure Palmar will ever repay them, when no interest is actually payable?The S Tel estimates the PIKs are "virtually worthless" and states "On every level, this looks a bad deal; the offer should either be increased, or shareholders should reject it and make Mr Palmar pay the costs."They refer to FinnCap's recent target share price of 310p "with further upside". I do feel if we all play hardball, Palmar will be forced to pay a fair price. Why should we give Constellation to Palmar at a £70m discount to FinnCap's value and give him and his backers this profit or possibly a multiple of this in a few years?
Martin_D
30 Nov 2016
Better news Latest RNS says CHT are now looking to see if others might offer alternative proposals. I have added to my holdings at 213 p on basis that even if no better offer forthcoming shares are worth upwards of 235 p
stuffee
30 Nov 2016
Re: More Whiff and just cosmetics WS, I agree.This latest appointment of Cassel appears to be for pure cosmetics.Although I believe Constellation to have great prospects, I can't believe any new bidder will want to get involved against Palmar, when he currently owns 53% and it appears all the exec directors are involved in the MBO. Interesting that the only name from Constellation re the announcement of Cassel's appointment was .....Palmar. When no one else emerges, no doubt Palmar will attempt to suggest his offer was fair.The Palmar proposal should be binned or else improved to a fair price. In their research note of two months ago, their brokers, Finn valued Constellation at 310p, prospective PE of 14. Offer should be improved to at least 310p, with a reasonable premium over stand alone value, all in cash with no dubious and ridiculously overvalued PIKs. Otherwise Cons should stay independent, when Simon Thompson makes the good point that it could use its new debt capacity of $145m to make cash return, which would dramatically increase share value..
winningstreak
30 Nov 2016
More Whiff With every new RNS that comes out, I somehow sense more whiff, or stink or call it what you like. I feel the whole takeover story has to do with liningthe pockets of Parmar, rather than serving outside shareholders.IMHO,ws
Vipers Ox
28 Nov 2016
Re: Won't be steam rolled to accept this att... take private pay back proms list on nasdaqthats what will happen(try googling Doug Newton and look out for the $600m IPO that he and his cronies are cooking up)The whole thing stinks but thats the price you pay investing in a company where there is a single majority shareholderdont expect a higher offer equally dont sell you shares - sit tight till the deal is done otherwise you're just giving them to Parmar on a plate.
winningstreak
28 Nov 2016
Whiff In my view this complex deal involving Parmar's shareholding has a strong whiff about it. I suspect the deal is in the interest of Parmar himself rather than in the interest of outside shareholders. Time will tell, but the share price nowtrending somewhat down is indicative of a degree of mistrust in the deal, IMO.ws
stuffee
27 Nov 2016
Won't be steam rolled to accept this attempted steal Having reflected further, I much doubt this attempted bid by Parmar (CEO) to steal CHT at so called £2.70 will succeed.Firstly, I feel it is near misleading to describe bid as worth £2.70 (cash of $2.93 or £2.35 and prom notes of $0.43 or £0.35). As explained in my earlier post, I suggest the PIK prom notes are certainly not worth anything like par. Maybe advisers FinnCap should buy a new calculator so they can bother to analyse the fair value.I've been reviewing recent press and other interviews. There's a lovely interview with Parmar in ProActive Investors earlier this year:"Paul Parmar, chief executive of Constellation Healthcare Technologies (LON:CHT), says that his company is undervalued and he is a “definite buyer” of the shares at the current price.He attributes general market volatility to the suppression of the stock and says the true valuation of the company, which provides billing services to doctors in the U.S., is closer to US$400mln than today’s market cap of US$188mln."His suggested valuation of $400m is equivalent to £3.45 per share.FinnCap, CHT's advisers recommend us mug minorities to accept so called 270p; see comments on their recent research, when they valued CHT at 310p!:"finnCap’s punchy price targetThe broker reckons the stock is worth 310p more than double the closing share price.It points out the business is trading on a forward multiple of less than 10 times earnings 8%-plus free cash flow."Hope FinnCap understand that a fair bid should be at a premium to market value.I also thought recent press announcement by CHT interesting for what it did NOT say. Legal & General is CHT's largest independent shareholder with 5% and a bid announcement would normally quote its intentions to accept, whereas the announcement was understandably silent. Unlike FinnCap, maybe Legals have analysed value.I don't object to Parmar and his pals wanting to acquire the gem of CHT with its exciting prospects. They've understandably probably been disappointed with CHT's low market rating, inevitably caused by the Market's short term scepticism with a US company's London quote.However, they ain't gong to steamroll me at less than a genuine 310p. I feel that if Legals and a few others hold out, Parmar will be forced to pay a fair price.
winningstreak
25 Nov 2016
Re: Promissory notes worthless ? The whole deal makes me feel even more uneasy about Parmar than I already did.ws
Martin_D
25 Nov 2016
Promissory notes worthless ? The market appears to think so.Paul Parmar is a dominant shareholder in both the parent and CHT, and I place no value on the "promise" (Promissory Notes). I have experience of a similar situation in the takeover of Fortune Oil, where the minority shareholders were given a promise, which was not honoured, and we were outvoted by the majority concert party.. However in the case of CHT , the takeover requires the majority of the minority to approve. Please vote against. We need cash or the equivalent.
stuffee
25 Nov 2016
Suggest Prom notes maybe worth 18.5p Gretel, I think you will find the prom notes are PIKs, with no interest payable for 7 years, so can't see many income funds getting excited.I feel a 15% (not 5%) discount rate would be fair value, in view of no liquidity and covenant from such a geared parent. This might produce a present value of the notes equivalent to c $0.23 or 18.5p per CHT share.After waiting till say mid Feb for settlement of the cash, my calculator suggests present value of the bid is c 251p, and I would love to meet someone offering near 270p.
gretel
25 Nov 2016
Bid at 270p! I'll take that 
))Shame about the promissory note element, but we may find that that's quite attractive to income investors, in which case the share price will get closer to the full 270p.
winningstreak
25 Nov 2016
Re: First time? Danger to other people savings...?
Vipers Ox
25 Nov 2016
Re: First time? the guy is a complete w****r!
winningstreak
25 Nov 2016
First time? This is the first time I have heard of a parent company buying its own subsidiary.Is CEO Parmar too smart a cookie to follow, or what?ws
