Tau – Vote No On Giveaway Sale – ValueWalk Premium
Institutional Investors

Tau – Vote No On Giveaway Sale

Just received a rather disappointing RNS from TAU.

Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

We respect your email privacy

Q2 hedge fund letters, conference, scoops etc

Tau

mohamed_hassan / Pixabay

To summarize they hold about $1m Cash and Stopharm – a Kazakhstan pharmacy.

They are suspended as they couldnt publish their results – being unable to value Stopharm.

The recent RNS has stated the offer is $1.1m post costs.  Giving a total value of Tau of about $2.1m or 4.2c per share, maybe a touch less.  I paid 5.4c per share so I am looking at a c22% loss.

I have a bit of a problem with this – Stopharm has assets worth $43m (according to the RNS, TAU owns 40.35%.  The RNS implies a value of about $3m for all of Stopharm.

According to Tau’s annual report Stopharm made $227k in 2015, $1.1m in 2016, 901k June 2017 which became a $230k profit at the FY.

My preference would be to either stay listed and wait for stopharm to grow or to delist and wait for a buyer to avoid listing costs.  I am not a fan of what appears to practically be giving Stopharm away.

There is money to be made here – Stopharm is worth more than this – if we hold out we can probably get a better offer and I am prepared to take the risk.  Apparently shareholders will get a chance to vote on the disposal and I suggest we vote with a resounding no.  I suspect a better offer may be forthcoming.

Article by Rob Mahan, Deep Value Investments Blog

LEAVE A COMMENT


X
Saved Articles
X
TextTExtLInkTextTExtLInk

Here’s a Tip: Read What Professional Investors Read

ValueWalk Premium is for investors looking to improve their investment process AND keep up-to-date on the latest industry trends.

It’s THE resource for value investing and hedge funds. 📈

And with a free three-day trial and $29.99 per month thereafter, it’s a value in its own right.

Sign up now. 👇

CLICK HERE TO TRY IT OUT

 

0