Photon Group returns to ASX – and could sell Naked
Naked Communications – the last big acquisition by Photon Group before it imploded – may be sold, the prospectus for Photon’s recapitalisation reveals. And Photon today returned to ASX listing – with its share price standing at 13c, compared to its $1.02 valuation before the company revealed its problems.
Referring to the “potential sale of Naked Communications”, the prospectus states:
“As part of the Deferred Consideration Restructure Agreement with Naked Communications Limited (“Naked”), Photon and Naked have agreed to use reasonable endeavours to agree to a new long-term incentive scheme within a specified time period. If agreement is not reached within this time, the Naked Deferred Consideration Beneficiaries may elect to either acquire the Naked group, or require Photon to initiate a competitive sale process for the Naked group.””\
Naked, which was founded in the UK, was bought by Photon two years ago for a promised $37m.
Co-founder Jon Wilkins is now based in Sydney.
If it was sold, the price would be 11.5 times Naked’s 2010 profits.
According to the prospectus:
“Beneficiaries may elect to either:
- Acquire the Naked group for not less than an agreed price ( the “Floor Price”) payable in cash, which represents a multiple of 11.5 times Naked’s FY2010F EBIT, which is subject to adjustment in certain circumstances and on such other terms as agreed by the parties; or
- Require Photon to initiate a competitive sale process for the Naked group at a price above the Floor Price. The Naked Deferred Consideration Beneficiaries will have a right to match the price offered by the preferred bidder in certain circumstances where they object to the preferred bidder or the parties are unable to reach an agreement for the sale of Naked to the preferred bidder within a specified period.”
Meanwhile, Photon also revealed that it has successfully completed the first stage of its recapitalisation, with the first $76m of the fundraising fully subscribed.
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If it goes this way, the Photon better hope for the Greater Fool to come along, they paid way to much for Naked.
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11.5 times EBIT, wonder how the other companies in photon feel about that mutiple
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Eleven and a half times earnings. Short of PT Barnum and a fool, no chance.
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Depends if they had a bad financial year…
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11.5 X EBIT !!!!!!!???????????!!!!!!!
$3M EBIT gets you $37M?
WHATEVER FOOL PAID THAT PLEASE CALL ME IMMEDIATELY – MY AGENCY IS FOR SALE ….. TO YOU!
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They’re kidding right ?
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The Business was run by idiots.
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