London Capital Group takeover approaches – SBM puts it in the net. Again!

2 mins. to read

SBM’S TAKE (UPDATE 15 FEB) – We might have been wrong on the acquirer re Betfair, but at least out traders nose is still working..! 3 bidders no less interested – this is very positive for shareholders and will mean that there is more likelihood of full value being paid. I also wouldn’t discount just yet Betfair entering the fray. Either way, the fun has just begun. I believe management actually do want to sell out and am certain that fair value is likely to be anywhere between 70-80p barring any ‘funnies’ being found in the accounts and which we highly doubt notwithstanding the debacle that was Worldspreads and that we personally suffered in!

Each bidder under the new Takeover Panel rules which were brought into play last year, now has until the 12th March to announce a firm intention to bid or otherwise. Both City and Cantor’s are natural buyers and, per our observation yesterday of saturation within the industry, have equal amounts to gain from consolidation. At a push, I’d say Cantors marginally more. Their pockets are deep enough to pay fair value too.

Ex cash 10 times average 5 year earnings gets us to a smidge over 80p. The other key element is that there will be potential useage of the £20m of reg capital too for these buyers as there will likely be a benefit of combining entities re cost savings etc and so the regulatory capital requirement will diminish. That is why the share price of 49p with almost 40p in cash is still an utter nonsense in our opinion (an opinion that has delivered a 90%+ success ratio – take a look at the About Us page)

If the market makers are silly enough to shake the price down to mid 40’s again, we are back in boots and torso deep.

Statement re: rise in LCG’s share price

London Capital Group notes the recent rise in LCG’s share price and announces that it has received preliminary approaches from Cantor Fitzgerald Europe (“Cantor”), GAIN Capital Holdings, Inc (“GAIN”) and City Index Limited (“City Index”) regarding a possible acquisition of the entire issued and to be issued share capital of LCG. There is no certainty that any of these approaches will lead to an offer being made for the Company.

Rule 2.6(a) of the City Code on Takeovers and Mergers (the “Code”) requires Cantor, GAIN and City Index by not later than 5.00 p.m. on 12 March 2013 (the “relevant deadline”), to either announce a firm intention to make an offer for LCG in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. The relevant deadline will only be extended with the consent of The Takeover Panel in accordance with Rule 2.6(c) of the Code.

Pursuant to Rule 2.10 of the Code the Company confirms that there are 53,185,908 ordinary shares of 10p in issue with International Securities Identification Number GB00B0RHGY93.

A further announcement will be made as appropriate.


Comments (3)

  • another great call! says:



  • NM says:

    I have a lot of respect for SBM and the thorough advice and suggestions it provides. However, I'm still waiting for comments on the situation regarding LCG's share price slump over recent days given SBM's bullish sentiments over recent weeks.

    Thanks in advance

  • Swen lorenz says:

    NM – Thanks for the positive comments. We are away in the US at the moment and so blogging is pared back. We intend to cover LCG in the next edition of our magazine following the break down of bid talks but believe the stock to be woefully undervalued at current levels.

Leave a Reply

Your email address will not be published. Required fields are marked *