The Evil Diaries: APR, Plus500 and the Israelis

My longstanding colleague, Lucian Miers, notes that APR’s 17%  shareholder GE (General Electric Co) is not named as party to a prospective bid for APR, whose assets are mostly what was GE’s power rental business and which APR acquired in 2013 for $314 m of which $250m was in APR paper valued at £10 per share. If anyone knows the true value of APR it is GE and they haven’t to date shown any interest buying it. To them APR is just another customer to whom to sell their stuff. Put another way, APR should be shorted. I am not sure as to what level it should be so treated. But, at 140p, I still think it is a good bet.

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Elsewhere, although I have previously mentioned the very sensible doubts that should be attached by Plus500 (PLUS) shareholders to holding out for the Playtech 400p bid, there is a further factor: this is that holders who, eventually, cash in their chips will have to cope with the Israeli Inland Revenue since there is a withhholding tax of 25% of the proceeds – in this case 100p – which only comes back after the accepting non-resident in Israel shareholder has dealt with that esteemed organisation. This kink in events arises since both Playtech and Plus500 are Israeli companies. It hardly stimulates buying for the arb.

My reckoning is that at the end of the day the FCA will kibosh this deal since PLUS will be regulated out of existence and that therefore a short at 340p is still in order.

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