1645 replies to this topic

[Investment novice]

Hypothetical situation...you want to buy remedica. Youre a company sitting with a strong balanace sheet. Why pay the full price for remedica. When you can buy the whole of ascendis and buy the debt and the revenue. If you have 400m euros..potentially 200m euros could make an attractive offer to shareholders with. The remaining 200 goes to settle debt.or a portion of debt. You retain some debt which your asset will pay off, and of course you buy all the tax benefits which comes with debt. You also get all of the ascendis assets and footprint.

Think about one of the restructuring aims..get rid of businesses that discount your value. Following 2020fy ascendis aside from debt can be reasonably valued based on individual assets. I think management may have hidden some of the deck of cards on this. And we did not particularly ask during the q and a.......hypothetically speaking.....for an international player this is a small to medium acquisition...i still say small....makes more sense to take the whole bundle....and cheaper.....only caveat is would shareholders accept r8 ?i think many here will accept r4 hence think institutional may go for r8

[AnbanM]

Hypothetical but i think a play for the whole ascendis on on the cards not just remedica and importantly of we see it the first price will test the market and will see shares get mopped up. We need to remember this , as there may certainly be a second higher offer due to stregnth of institutional investors....if you sell, exit on the second peak.....or play the double peak if you trading.....

Hi IN, please can you elobrate here ...i am not fully following....apologies may be my inexperience...

[Investment novice]

Hypothetical but i think a play for the whole ascendis on on the cards not just remedica and importantly of we see it the first price will test the market and will see shares get mopped up. We need to remember this , as there may certainly be a second higher offer due to stregnth of institutional investors....if you sell, exit on the second peak.....or play the double peak if you trading.....

[Investment novice]

Was expecting a q1 update. Tried to buy at a lower price no bites. Interest is growing here. Still way under priced....agree with patience and there is some news coming as this share has been resilient for past month where i was concerned we may have tracked lower but support levels held

[DeltaHedge]

We just need some patience, I still think this share is super undervalued.

We just need some news for the share price to move.

 

Whats your target price on it Andi? 

[Shi]

Agreed. I will even settle for a trading update for the last few months. I am very intrigued by the steady share price increase over the last two days.

 

I'm thinking that it could be a bit of a pump with a view of the AGM in 2 weeks time in mind. Possibly looking at information regarding Remedica sale coming out. Surprised that the sellers seemed to have dried up so quickly. Just a thought.

[Leadingedge]

We just need some patience, I still think this share is super undervalued.

We just need some news for the share price to move.

 

Agreed. I will even settle for a trading update for the last few months. I am very intrigued by the steady share price increase over the last two days.

[andi222]

We just need some patience, I still think this share is super undervalued.

We just need some news for the share price to move.

[Zanme]

Just a comment on Vox (sorry for derailing). Looking at the R452m and R2B is a very simplistic way. You not including any further investments that have been made. One article shows that Vox had 40 (small) acquisitions. AFAIK, the owners paid for most of this - the re-capitalization was part of the deal when they were bought out. Again, we don't have all the info available to determine if the delisting was a good investment or not.

It was a good investment that's why Investec exited it and the other investors which include RMB have remained. They knew why they were buying it. Tiger Wheel and Tyre was also delisted. These guys don't do things to throw away money.

[Investment novice]

Small volume moves but certainly think the semtiment is positive. Share very deflated according to its value so should see nice gains , sum ups and downs. Recall most were bullish even at r1.10 to r1.30 ....nor ality should return with positive news.

Really hope there is good news....but would expect a leak to cause a triple digit gain.....perhaps soon.

Apart from remedica sale, there is so much more that we could see.....a play for the entire ascendis....why take remedica when you can take the entire business at a discount, use some of the payment to pay debt and refinance the loan.

[Leadingedge]

Either you guys need to keep saying nice things about ASC or there is some good news brewing...share price up almost 10%

 

Maybe due to the updated news on another vaccine today?

Edited by Leadingedge, 16 November 2020 - 04:49 PM.

[Shi]

Shi every bit count on Ascendis and it will do a lot. Why sell the most valuable asset. If it could make a marginal loss from normalised operations with growth and a meaningful reduction in head office costs to right size it to the size of the company than they can even fund the 14 percent interest rate. On Vox there was a lot of articles about Investec selling their stake at R2 billion which is one third of the company. Vox was bought out in 2011 for R452 million. So Investec made more than 10 times. And we were bought out. Our CEO friend comes from private equity so it figures where he is going with this. They should not sell Remedica.

 

Just a comment on Vox (sorry for derailing). Looking at the R452m and R2B is a very simplistic way. You not including any further investments that have been made. One article shows that Vox had 40 (small) acquisitions. AFAIK, the owners paid for most of this - the re-capitalization was part of the deal when they were bought out. Again, we don't have all the info available to determine if the delisting was a good investment or not.

Edited by Shi, 16 November 2020 - 04:44 PM.

[Zanme]

Lots of head office cost teimming done in past 18 months. Rental reduction, downsizing or right sizing.
The euro debt is a crippler on cash flow , liquidity and ability to remin a going concern with a financial risk on the balance sheet.
The company does not jeed to own remedica and the portfolio to be able to access it and profit from it.
Get rid of remedica but still maintain a profitable relationship as you know the company inside and out.....
Hapoy to own a smaller debt free company fpcussing on growth , getting dividends, and where the share value as at the more approrpiate multiple.

Im not convinced. I don't want to make a quick buck. I want them to create a sustainable business that will increse 10 times at least. That is what it should be worth. They should be able to pay debt soon if they growing at the rate that they are.

[Investment novice]

Lots of head office cost teimming done in past 18 months. Rental reduction, downsizing or right sizing.
The euro debt is a crippler on cash flow , liquidity and ability to remin a going concern with a financial risk on the balance sheet.
The company does not jeed to own remedica and the portfolio to be able to access it and profit from it.
Get rid of remedica but still maintain a profitable relationship as you know the company inside and out.....
Hapoy to own a smaller debt free company fpcussing on growth , getting dividends, and where the share value as at the more approrpiate multiple.

[AMG76]

Anyone able to offer a reason for the uptick in SP, as I don't see any news?

[Zanme]

Shi every bit count on Ascendis and it will do a lot. Why sell the most valuable asset. If it could make a marginal loss from normalised operations with growth and a meaningful reduction in head office costs to right size it to the size of the company than they can even fund the 14 percent interest rate. On Vox there was a lot of articles about Investec selling their stake at R2 billion which is one third of the company. Vox was bought out in 2011 for R452 million. So Investec made more than 10 times. And we were bought out. Our CEO friend comes from private equity so it figures where he is going with this. They should not sell Remedica.

A R70 million reduction in Head office costs on a 10 pe after tax is valued at R500 million which is twice the market cap of the company. So I am not sure what you mean by it will not make a meaningful difference every cent makes a difference.

[Zanme]

@Zanme, where do you get your info on Vox? How would you rate them as flourishing? After delisting, their owners have done alot to it (added capital, made aquisitions, etc). Vox has evolved since delisting (buddy works there). But, currently they can't find a buyer for it. Also, since it is privately held, how would you know what it is worth. What would you pay for Vox if they had an IPO? Do you have access to their financials?

On ASC, doing anything on the head office overheads, won't do much to the debt given that the size of the debt and how much can be saved with the head office. I agree that the interest rate on the debt can be looked at, but I don't know what management has done about this.

Shi every bit count on Ascendis and it will do a lot. Why sell the most valuable asset. If it could make a marginal loss from normalised operations with growth and a meaningful reduction in head office costs to right size it to the size of the company than they can even fund the 14 percent interest rate. On Vox there was a lot of articles about Investec selling their stake at R2 billion which is one third of the company. Vox was bought out in 2011 for R452 million. So Investec made more than 10 times. And we were bought out. Our CEO friend comes from private equity so it figures where he is going with this. They should not sell Remedica.

[Shi]

@Zanme, where do you get your info on Vox? How would you rate them as flourishing? After delisting, their owners have done alot to it (added capital, made aquisitions, etc). Vox has evolved since delisting (buddy works there). But, currently they can't find a buyer for it. Also, since it is privately held, how would you know what it is worth. What would you pay for Vox if they had an IPO? Do you have access to their financials?

 

On ASC, doing anything on the head office overheads, won't do much to the debt given that the size of the debt and how much can be saved with the head office. I agree that the interest rate on the debt can be looked at, but I don't know what management has done about this.

[Investment novice]

Zanme...look away. ..venture capitalist make big and lose big. Have to take on high risk bets. PE does not always pan out.

Looking at what has been done and understanding the complexity of turning around and ensuring a robust supply chain during covid has been a massive ask for the companies you talking about. And interestingly ascendis was able to bolster that ahead of the real peak we seeing globally. Imagine what their numbers are looking like woth SA surgicals returning or catching up after having been under by more than 50%, we see many of the hospital groups reporting on surgical numbers improving for past 4 months....

All subsidiaries should be firing....and rand stregnthening....its a waiting game...and here...12 months and any share you buy now....will be worth....your guess....and a viable business after remedica.....evem if they only can produce 300m profits annually after remedica ....think about how sweet that is for a company you buying anywhere under r2 to r4...

Personal thoughts...huge risk..nice multiple...nice potential hold for a few years or for disposal and rebalancing.....i think in 12 weeks we should have an announcement...talking to q1 , or h1 , some debt settlement after accounts swept...and .....remedica and or other disposals close to 100m euro....

[Zanme]

The biggest issue in all these companies is management and the fact that there interests are not aligned. We have a weak regulator and we all fall for managements misrepresentations. People here have said that management is great. Again since this new guy has joined the share price has dropped from R4 to 60 cents. The boards set KPI for these guys to sell this and that but there should be one KPI create value for shareholders if they don't they don't get paid. But in SA as is with Steinhoff and the rest the guys get phenomenal bonuses. These guys serve their own agendas when selling businesses. Its not cheap to do these things. And they end up selling the crown jewels. Its all because they have their own agendas. Why doesn't management at Ascendis reduce head office costs currently at R147 million more than half of the market cap of the company. Or try to get even one percentage lower than the 14 percent interest that the company is paying. They won't because they dont own a single share in the company and it doesn't benefit them. Not sure if you guys remember VOX Telekom. It was delisted at around couple of cents. Look at it now its flourishing. Management knew that and wanted it all for themselves. Same with Steinhoff they have paid and paid consultants. They want to list the European business consultants and banks are creaming it but shareholders assets are being diluted and everyone gets excited about it. So as long as management doesn't have a proper vested interest in the company I am not convinced that they will turn it around. I hope they do but the way things seem to be going with a lot of listed companies I am becoming increasingly skeptical about the purpose of the stock exchange. That is why a lot of the smart money choses private equity and leaves the listed stuff for the masses who won't be able to question management and what exactly are they doing.