Author Topic: ECL.AU - Excelsior Capital Limited  (Read 10480 times)

Cicero

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Re: ECL.AU - Excelsior Capital Limited
« Reply #30 on: August 16, 2020, 10:23:30 PM »
Thanks Alex. Saw the announcement this morning. Finally something moving! Not sure it is the best time to sell the electrical business, but otherwise agree with the observations of the shareholder group.


NeverLoseMoney

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Re: ECL.AU - Excelsior Capital Limited
« Reply #31 on: August 17, 2020, 04:38:36 AM »
Some big and exciting news at Excelsior Capital. A group of large ECL shareholders have organized an activist campaign and are calling for ECL's board to sell the electrical services business and distribute the proceeds from a sale to shareholders. There will be a shareholder vote and if it's successful the board would be compelled to follow through with this plan and sell the company.

The activist group pegs the value of the electrical services business at $1.75 - $2.40 per ECL share and when adding the value of the investment portfolio (another ~$0.65 per ECL share), ECL's stock is worth $2.40 - $3.05 per share. That compares to today's price of $1.20. The stock is obviously very mispriced.

"Businesses like ECL's electrical services business change hands regularly. Based on recent sales, we think ECL's electrical business is worth $50m at an absolute minimum and perhaps even $70m or more - i.e. $1.75 to $2.40 per ECL share. This is in addition to the investment portfolio which is worth ~.65c per share."

Here is the filing:
http://www.cmilimited.com.au/DownloadFile.axd?file=/Report/ComNews/20200817/02267321.pdf

In my opinion, this is in the best interests of every shareholder including controlling shareholder Leanne Catelan. This activist campaign is certainly an exciting development for ECL shareholders and I think it has a good chance of being successful in spurring action by the company. With shares trading at ~$1.20, this would be a major windfall for shareholders.
Glad to see we now agree after ~1.5 years.

As I feared, Glennon's performance as an investment manager for ECL did turn out to be terrible, as pointed out by the activists.

With Catelan now holding close to 50% I wonder how the activists expect to get enough votes. But it's certainly good that they make themselves heard and let Catelan know that they're not happy.

It's still my view that a delisting is the end goal of Catelan. The lax delisting rules in Australia make this far too easy and that's why the stock has traded were it has over the last few years. If a shareholder has the capacity to hold on to their shares no matter what, especially in the event of a delisting, I think this should work out well. If enough stubborn shareholders show their support, perhaps it will motivate Catelan to sell sooner rather than later. Time value of money matters and if Catelan realizes she can't scoop up many more shares at depressed prices, she won't have much to gain by letting shareholders hang a lot longer.

Cicero

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Re: ECL.AU - Excelsior Capital Limited
« Reply #32 on: August 17, 2020, 06:03:58 AM »
It's still my view that a delisting is the end goal of Catelan. The lax delisting rules in Australia make this far too easy and that's why the stock has traded were it has over the last few years.

I agree that the delisting threat has a lot to do why this trades the way it does. However, I understand that end of last year the listing rules have changed (now you need a special resolution instead of an ordinary one). In addition there is the possibility to petition a court and the takeover panel depending on the circumstances if you believe it harms your interest as a shareholder. No idea how that works in practice and it probably is cumbersome and expensive if it works, but I think the hurdle to achieve a delisting is higher than it appears at first glance as long as there is a sizable minority. Real risk is time in my view. 

Scunny Bunny

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Re: ECL.AU - Excelsior Capital Limited
« Reply #33 on: August 18, 2020, 04:42:05 AM »
https://hiddenvalue.blog/2020/08/18/excelsior-capital-asxecl/

Good history lesson in here. Salacious details (rumoured) have been omitted by the author BTW.