Tuesday, 10 March 2015

Updates Gyro, KWG, Glentel, WTW,

Gyrodyne

Gyrodyne filed a S-1 form with the SEC and I exited the position. This may look like a loss, but in Euro Gyro actually earned me some money as the Euro has lost in value.

Although the prospectus is preliminary and we don't know the actual numbers yet, I expect them to offer the new shares with a discount to current trading prices. The issue of new shares seems to be neccessary in order to get enough votes for the merger:
"On June 5, 2014, Gyrodyne announced that a special meeting of Gyrodyne shareholders would be held on August 14, 2014 to authorize the Merger. Gyrodyne postponed the special meeting, first to August 27, 2014 and then to December 5, 2014, to allow additional time for shareholders to vote on the Merger. Although the shares that were voted in these previous attempts to conduct the special meeting were voted overwhelmingly in favor of the Merger, not enough shares were voted to achieve the two-thirds of the outstanding shares vote requirement. Accordingly, on November 4, 2014, Gyrodyne announced a further postponement of the special meeting until the first half of 2015. Given the small size of holdings of many Gyrodyne shareholders and the nature of various holders, we believe many holders may not have paid enough attention to the Merger to exercise their right to vote. The board believes, however, that shareholders who would exercise their subscription rights in the rights offering may be more interested in the current structure of Gyrodyne and thus more likely to vote their shares on the Merger proposal."
I believe the shareholder who didn't bother to vote, will not bother to participate in the offering and will be diluted. This could be a chance to get back in at lower prices. The "Strategic alternative costs" for Gyro over the past years and continuing are a little high for my taste.

KWG Komunale Wohnen
 
Deutsche Wohnen announced a takeover offer for €11.50 per Conwert share. Conwert is KWG's parent company, which means KWG is now implicit in play. I have increased my KWG position directly after the announcement in February and it is now trading higher. The majority of the portfolio of KWG should be considered non-core by Deutsche Wohnen.

Glentel

Glentel is trading lower than my purchase price. With BCE trading for 53.32 this offers upside of about 12%, which I think is attractive. I have increased my position a little bit.




glentel
50% cash26.513.25
50% BCE0.497413.2653.32

implied value bid26.51

price glentel23.67100% cash

discount-10.72%-10.68%

upside12.00%11.96%

Weight Watchers

The purchase of weight watchers was a mistake. I did not understand the falling price on no news and thought either the price in December was too high or the price now (at purchase) too low. The high percentage of float shorted was another interesting piece. The enterprise value is dominated by debt and the business trend is downwards. Any change in the fundamentals will have a huge impact on the share price. The actual numbers were bad and management ignorant of the problems. I will hold the company for now to keep it on my radar, but I don't really think this will be a full position anytime soon with this management team.

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