Will wait and see - interesting that Orbis indicated its disappointment (the underlying tone appears somewhat stronger) in the article, and from reading appears that this was the main thrust of their comments, with the issue regarding a breakup of the company being a good thing not so much being the main focus. As with any articles, difficult to read between the lines. What is annoying however, is that if Orbis is that disappointed, why unlike the majority of posters here did Orbis vote in favour of the resolutions at the last meeting including that of remunerations to the board members? Considering their some 20% of the stock holding, had they voted against the motions, there would likely have been a different outcome now than the uncertainty of the MBO and even perhaps a different outcome for various other issues including that of the consolidation or even the Top Ryde investments (assuming a change to the board had been an outcome following a failed resolution at the vote). I supposed such speculation is could-have-been, would-have-been, but underlying all that is the question as to what Orbis is really up to and what agenda is in play.
Regardless, as with most holders it would be interesting to posit figures that the MBO might put forward - as indicated in the following reply from Valad (questions and responses in-line), they indicate an EBITDA of $14.8m - considering the increase in fund management since 6/30/2010, I'd speculate somewhat more, and from there one would ask as to what multiple of EBITDA any bid might be at. Any comments out there would be appreciated, and various articles out there suggest for 2010 ranges in the order of 8-10 were somewhat commonplace. Following is the email responses (not that they include much more than we already knew):
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Dear XXXX,
Thank you for your email, please see below the responses in point order as per your questions:
1) Why has no information or releases been made since the MBO announcement to stabilise the share price and alleviate perceptions and fears as indicated?
The proposal the Board received is currently indicative and incomplete. The Board announced the proposal to the market and instituted protocols very early in the process, as the proposal constitutes a related party transaction. As at the 24th January, the proposal remains incomplete, if this changes or other information comes to light then the market will be duly informed.
2) When is the Noosa Sheraton announcement due to be made?
This announcement was made on Friday 14th January, it is available to be viewed in full on the Valad website or via the ASX website.
3) What is the impact on the balance sheet and NTA of the Noosa resolution?
Please refer to the announcement from the 14th January.
4) Are there any other downward valuations expected in the February report?
Valad is currently scheduled to report its half year results to 31 December 2010 on the 16th February and will be providing an update on property valuations. Unfortunately, due to our continuous disclosure obligations we are not able to provide this information to an individual securityholder, it will be disclosed to the market as a whole with the overall financial results.
5) Are there any updates on Goldfields House?
On the 13th December 2010 we announced that a Stage 2 development application had been submitted in relation to the development of Goldfields House (now called One Alfred Street). This announcement can be viewed in full on the Valad website. There have been no further updates since that time.
6) Is it possible for Valad to provide regular updates on projects such as Goldfields House by way of either newsletter or website pages to this effect?
Valad has provided several updates in relation to the Goldfields House development through ASX announcements, press releases and results presentations to ensure investors receive up to date information in relation to the project. Valad has considered a newsletter for reporting between halves and we will continue to review the benefit of this to all security holders.
7) What is the EBITDA of the European Management (NB, by this we assume you mean the European business) and by what multiple or otherwise would a sale to the MBO consortium be considered?
As stated in the 2010 full year results presentation on page 14, the reported EBITDA of the Valad European business as at 30 June 2010 was $14.8 million. If a formal offer is received it will be fully assessed by the Board, including seeking an assessment by an independent expert.
8) Is the MBO being considered in relation to reducing the Kimco debt, and more generally what activities are underway to extend this debt period?
Valad is in regular contact with Kimco in relation to the future of this debt.
9) Has a replacement director been found to exercise the MD duties?
Please refer to the announcement made on the 17th January in relation to the appointment of Mr Clem Salwin as Acting Chief Executive Officer.
10) Is Mr Hurley being paid during his leave and is the termination amount payable (or any bonuses should he remain) reduced accordingly.
As stated in the ASX announcement of the 17th January, ?Mr Hurley has, by agreement, taken a leave of absence as Managing Director and is currently utilising his entitlements to annual leave.?
11) Why has it been indicated that a single external assessor will consider the financial merits of the MBO proposal - will shareholders be made aware of this entity and be given the opportunity to examine and question any findings before the board makes any decision.
If a formal offer is received it will be fully assessed by the Board. Any proposal constituting a related party transaction for the purposes of the Corporations Act or the ASX Listing Rules, will be treated in the manner required by the Act and the Listing Rules, including where appropriate, a vote by security holders at an EGM and an independent experts report, which would be provided to securityholders.
12) Have any other external parties indicated an interest in the European Management since the announcement and if so how are these being considered given the information brings into a serious conflict of interest.
As stated in the ASX announcement on the 16th December 2010, ?The Board of Valad continues to review various corporate initiatives that are aimed at maximising value for the Group and its securityholders. The independent directors of Valad will manage the process of assessing the MBO proposal as well as any other proposals.?
Regards,
Investor Relations
VPG Price at posting:
$1.16 Sentiment: Hold Disclosure: Held
(20min delay)