Photon confirms new delay in recapitalisation as up to five agencies reportedly hold out
Photon Group has broken its official silence with its first formal market update in nearly four weeks.
Although briefings from sources close to the troubled marketing group have been appearing regularly on the pages of The Australian and Australian Financial Review, Photon’s last official market update was on June 28, when the company revealed the depth of its problems.
The company has been in a trading halt from the ASX since June 7.
In a brief update, quietly issued to the ASX on Friday but unreported until today, Photon confirmed much of what had previously been speculated about, including its attempts to persuade founders of the agencies it bought to renegotiate earnout payments and to take them in shares rather than cash. The agency bosses will also get their payments based on the performance of the whole group rather than their individual agency.
Wow, a f*cking nightmare indeed.
(Moderated by MUmbrella) is responsible for this entire mess.
You’d love to be one of those agency leaders – ‘sorry chaps, we completely stuffed up our finances, regardless of how well you are doing you now have to accept less value, mostly in our junk shares, and by the way you can only benefit if we can turnaround the lame and hopeless parts of the group’.
Hard to see why Photon would be surprised at a bit of reluctance.
If I were running one of those groups I would be pushing for a sale to another group, with my buy-out being part of the negotiated deal, why would they care about the health of the group?
Go Naked!
Being renegades is in their DNA, so good on ’em.
repeating myself here, but it ain’t bad news for everyone. some of the agencies purchased by photon received the equivalent of a 4+x in cash up front which if you sold to most international networks you’d be lucky to receive in 5 years, plus they still kept 50% of the agency. bmf sold 100% and more or less received all cash up front plus some rolled gold incentives to make even more. so whilst some of photons purchases are going to be left short, some have already done better than they ever would’ve done selling to omnicom, wpp, interpublic and publicis. so when you see bmf and bwm signing up assume they’re devastated about what’s happened; disappointed maybe, but even with 30 – 40c in the dollar on whats owing they’ll still be miles ahead of the game. if only i was so unlucky!
forgot to add for Tom at 12:43. my bet is that naked aren’t signing because they probably weren’t as ‘unlucky’ as bmf and bwm. i dont think it has anything to do with them being renegades.
For all those involved, the innocents who may be hurt, I feel for you.
For the company itself: die in a fire.
having read 2:43’s comments i hope my two previous posts didnt read as supporting photon or their management as obviously some very good businesses and more importantly good people are suffering badly through no fault of their own
So, would people here recommend taking a job for one of Photon’s companies? How insulated are they from the problems upstairs?
@justakin
As someone inside a Photon owned agency my advice would be to take the job if it feels right. We are doing well and hiring and very immune from Photon. What I have been told by the boss (who is a mate and wouldn’t bullshit me) is that all negotatiations with staff over payments is ptryy much sorted.
Hope that helps.
As a loyal investor, I feel betrayed hearing about million dollar Xmas parties and the stuff up with earn outs to Execs. Wont be much left of my pennies and I expect most shareholders will sell and move on.
So no expansion for BMF to London or overseas as previously announced by photon, was this to get the share prices up. I think so, maybe they should investigate further. Don’t hold your breath if it goes under from what i have heard