Ann: Sale of Retail ICT and Sprout Business, page-30

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woomp001

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26/09/21

11:25

Post #: 56353820
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Originally posted by TazD: ↑

I think the chances of the vote going against this deal are remote to none. It would need major shareholders to vote against. Maxine holds 18% shares. I am a very small shareholder so have a lot less at stake.

If for some unfathomable reason the no vote does get up then life goes on. Board will lose credibility but I don't care. When CAA shareholder rejected board supported takeover share price went up exceeding the over takeover price and continues to do so. It's a myth that Boards know best and act in the interests of all shareholders. Business goes on despite BOD's.

At 1.5x EBITDA the deal stinks and I simply cannot calculate the logic of it.

ICT business - $110M
EV - $153M

So BOD consider that the Artisan business is worth >$43M + $35M in working capital retained. $78M, hmmm. Really?

The announcement highlights the benefit of removing the uncertainty for the ICT business. I don't see this as a benefit; it locks in wealth destruction for shareholders.

It leaves a whole lot more uncertainty in a relatively new artisan business with EBITDA of $1M. Where are the projections for this business? How much capital is required to get required scale and systems in place? We only have 20 points of presence. I suspect $35M will not be enough so business will need to raise capital.

VTG should be demanding at least 2x EBITDA on the sale of ICT business or simply keep trading it and invest free cashflow into the Artisan business.

I'd like to see the company provide an assessment of the current value of the business (ex ICT) so shareholders can determine if this deal makes sense. I cannot see the sense of it.

All my opinion, happy to read counter views.

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I agree 1000% with all of this.

It is just ridiculous.

VTG Price at posting: 88.0¢ Sentiment: None Disclosure: Held
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Ann: Sale of Retail ICT and Sprout Business, page-30

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Dale Gillham's weekly wrap: US fracking support boosts outlook for Australian gas stocks

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