UK Government borrowings reduced but still high

Anshula Kumar
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UK Government borrowings reduced but still high

The Office for National Statistics announced the latest figures associated with public finance on Tuesday where the organisation highlighted that though government borrowings have more than halved in the past year, it remains high.

According to the latest reported statistics, government borrowing more than halved in 2021, but remained the third largest on record, owing to Britain’s sluggish recovery from the Covid-19 pandemic.

The difference between the state’s revenues and spending in the year to March was £151.8bn, down from £317.6bn in 2020, according to the Office for National Statistics.

Despite the year-on-year reduction, the overall deficit for 2021-22 was more than £20bn greater than the Office for Budget Responsibility expected in its estimates for Rishi Sunak’s spring statement last month.

“Public debt is at the highest levels since the 1960s and rising inflation is pushing up our debt interest costs, which mean we must manage public finances sustainably to avoid saddling future generations with further debt,” Sunak said.

The chancellor stated that the economy was strengthening and that the public finances were improving, but that earlier borrowing had left a debt legacy.

Borrowing was £18.1bn in March, somewhat less than the City had projected, yet the second highest since records began in 1947.

According to the Office for National Statistics, the national debt in the total amount borrowed over time was £2.3tn at the end of last month, accounting for a little over 96% of the economy’s yearly production. The debt’s interest payments reached a new high of a little under £70bn.

Danni Hewson, Financial Analyst, AJ Bell said, “This is a real glass half full moment for the UK economy. The phasing out of covid restrictions and the end of support measures like the furlough scheme have helped the country surge back to its feet.”

Hewson said that the cash coming in from taxes has rebounded at a quicker rate that what was expected with inflation playing a role. However, the problem is that the revenue is not sustaining the expense in order to match the demands of the public.

“Cash is coming in fast just not fast enough to keep up with continued demands on the public purse and the difference in numbers between what the OBR forecast just last month, and the numbers offered up today just shows what a tightrope the Chancellor is having to walk.”

The cost of living increasing as inflation rises is said to “exacerbate the situation” as people already “struggle to make ends meet” said Hewson.

“Whilst borrowing in March was significantly down on the same period last year it was still almost £12bn above what was needed pre-pandemic, the second highest on record for the month and up on the amount borrowed just the month before – the government is not immune to those rising prices affecting households and businesses.”

Small & Mid Cap Roundup: National Express, IWG, Northcoders, Origo Partners

Anshula Kumar
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Small & Mid Cap Roundup: National Express, IWG, Northcoders, Origo Partners

FTSE 250 was trading up 0.6% to 20,726 whereas the AIM market was trading down marginally by 0.1% to 1,031 on Tuesday.

National Express shares soared 10% to 247p as the transport company reported in its latest trading update that its revenues climbed 30% and have jumped back to pre-covid times.

Hochschild Mining shares rose 0.8% to 121p after the company announced that it was on track to meet its 2022 targets in its Q1 production results.

Diversified Energy acquired 5 new assets in East Texas which resulted in the group’s shares gaining 1.7% to 115p.

Abdn Private Equity Opportunities Trust gained 4.8% to 526p as the company reported to increasing its NAV in Q1. Net asset value per share climbs by 4.7% to 705.2p from 673.8p the quarter before.

Elementis in its AGM announced a strategic update regarding the possible divestment of its Chromium business, which lead shares to drop 0.8% to 120p on Tuesday.

IWG shares tumbled 6.5% to 237p as the company announced in its trading update that it had to invest faster than initially expected to meet the needs of the office market which has been “irrevocably changed by the pandemic”.

PureTech Health shares declined 1.5% to 188p despite the company presenting continued advancement and growth in its wholly owned programs in the group’s final results for 2021.

AIM MARKET

Northcoders Group shares flew 23.5% to 315p after the company reported that its revenue more than doubled in 2021, a year in which the provider of training programmes for software coding expanded its footprint. The group’s revenue increased from £1.3m to £3m and its pretax loss decreased from £1.2m to £523,000.

Chariot Oil and Gas shares boosted 9.1% to 21.5p after the Africa-focused transitional energy company names Societe Generale SA as financial advisor to help shore up debt funding options for the Anchois gas development in offshore Morocco. 

Origo Partners shares plummeted 33% to 0.07p after the investment company said its shares will be suspended from trading on Thursday, before being cancelled in late-May.

Origo claims that because Arden Partners was acquired by Ince Group, it is no longer eligible to function as the investment firm’s nominated advisor. Origo will have to find a new nomad if it wants to continue trading on AIM.

Origo claims that it has achieved its stated goals, including returning money to shareholders, and that choosing a new nomad is not in the company’s best interests.

Novacyt SA shares declined 14% to 167p after the company reported that the dispute with the UK Department of Health & Social Care is still ongoing.

The UK Department of Health & Social Care issued a £134.6m claim against Novacyt in relation to a contract for the provision of Covid-19 testing kits, initially announced back in September 2020, on Monday.

Touchstar shares tanked 14.3% to 68.5p despite the company reporting positive results with revenue up 3.7%, EBITDA up 25.5%, postax profit up 292% and earnings per share up 290%.

Price Target Changes

Mining company, Ferrexpo shares rose 2.9% to 170p despite JPMorgan cutting the company’s price target from 350p to 340p.

Marks & Spencer shares fell 2.2% to 149p after Deutsche Bank cut Marks & Spencer to ‘hold’ from a buy rating and reduced its price target to 185p from 255p.

Pennon shares gained 1.5% to 1,070p despite Deutsche Bank cutting its price target from 1,260p to 1,120p.

JTC shares increased 1.7% to 770p after HSBC raised the shares to a buy rating and altered its price target from 870p to 900p.

Wood Group shares rose 1.2% to 190p despite JPMorgan reducing its price target to 285p from 290p.

Jefferies cut Ibstock’s price target to 195p from 217p, however, Ibstock shares gained 1% to 180p.

FTSE 100 recovers as miners rebound

Natasha Doris
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FTSE 100 recovers as miners rebound

The FTSE 100 was up 0.8% to 7,445.7 in midday trading on Tuesday, gaining back some of Monday’s lost ground as the market slowly recovered from the shock of Beijing’s Covid-19 lockdown reports, which had sent investors into a panic over the potential economic slowdown.

Investors breathed easier as China began testing in Beijing, with the Hang Seng index up 0.3% to 19,934.7, reflecting an increase in optimism as stocks recovered after Monday’s nauseating shock.

It was a good day for miners as major commodities groups regained the lost ground from Monday, with Glencore shares up 3.8% to 466.5p, Anglo American rising 3.4% to 33,335p, Fresnillo increasing 3% to 770.1p, Endeavor Mining up 2.3% to 19,905p and Antofagasta shares rising 2% to 14,747p.

Airtel Africa enjoyed a shares rise of 2.5% to 147.6p after the company announced the win of a ‘super agent’ licence for its Airtel Mobile Commerce Nigeria subsidiary from the Central Bank of Nigeria, which reportedly allows Airtel to develop an agency network to service customers of licenced Nigeria banks, payment service banks and licenced mobile money operators throughout the country.

Taylor Wimpey shares were up 2.4% to 131.2p following the housebuilder’s report that the rise in interest rates from 0.5% to 0.75% had not impacted consumer interest in homes, and an 5.8% year-on-year increase in its order book to £2.97 billion, with the company on track to meet its annual guidance.

“Taylor Wimpey helped lay the foundations for gains across the housebuilding sector as it flagged persistent high demand in the market despite the cost of living crisis and the recent increase in interest rates,” said Mould.

“For now, soaring house prices are beating the increase in labour and raw material costs and keeping Taylor Wimpey and its peers’ impressive margins and cash generation intact.”

Associated British Foods suffered a decline of 5.1% to 12,460p, following the firm’s announcement that its Primark stores would need to raise prices in the coming months to offset increasing cost inflation.

“Attempts to cut costs to protect profitability haven’t proved sufficient so Primark is now planning ‘selective’ price increases but notably these won’t prove sufficient to prevent a greater reduction in margins than previously forecast in the second half of its financial year,” said Mould.

“Primark has a fine balance to strike as its bargain prices could help it gain market share if consumers trade down thanks to tighter household budgets. However, if it goes too far in lifting prices it could undermine its value proposition.”

HSBC shares took a dip of 3.6% to 483.5p in light of the financial institution’s $1.1 billion drop in profits on the back of rising inflationary pressures from the Russian war in Ukraine, alongside a net charge for expected credit losses and additional impairment charges across Q1 2022.

“HSBC has also been affected by the slowdown in investment banking – a year ago buoyant markets and surging M&A generated plenty of commission,” said Mould.

“Investors’ interest in HSBC is heavily linked to increased penetration of banking in less mature markets in Asia. With the impact of increased restrictions that growth outlook is clouded which negatively impacts sentiment towards the stock.”

Ocado shares fell 4.1% to 995p as the struggling online retailer was caught in the tide of falling grocery sales, which dropped on a two-year basis for the first time since the Covid-19 pandemic started on the back of 4.8% grocery inflation.

Research from Kantar reported a 5.9% fall in grocery sales in the 12 weeks to April 17 year-on-year to £29.73 billion from £31.60 billion, with sales sliding 0.6% on a two-year basis.

Sainsbury’s was also caught in the fallout of rising food inflation, with a share price decrease of 1.7% to 239p.

“The average household will now be exposed to a potential price increase of GBP271 per year,” said Kantar analyst Fraser McKevitt.

“A lot of this is going on non-discretionary, everyday essentials which will prove difficult to cut back on as budgets are squeezed. We’re seeing a clear flight to value as shoppers watch their pennies.”

HSBC shares fall on $1.1bn profit drop

Natasha Doris
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HSBC shares fall on $1.1bn profit drop

HSBC shares were down 3.5% to 484p in early morning trading on Tuesday, following a post-tax profit fall of $1.1 billion to $3.4 billion and an adjusted pre-tax profit drop of $1.6 billion to $4.7 billion.

The company said its suboptimal results could be traced to a net charge for expected credit losses and additional credit impairment charges of $642 million.

“While profits were down on last year’s first quarter due to market impacts on Wealth revenue and a more normalised level of ECL, higher lending across all businesses and regions, and good business growth in personal banking, insurance and trade finance bode well for future quarters,” said HSBC CEO Noel Quinn.

“We have further reduced costs while maintaining high levels of technology investment, and remain on track to achieve our cost and RWA reduction targets for 2022.”

HSBC confirmed a reported revenue decline of 4% to $12.5 billion, in particular across its Wealth and Personal Banking sector.

The banking group also confirmed an adjusted revenue fall of 3% to $12.5 billion.

The firm attributed its sliding revenue to unfavourable market impacts in life insurance manufacturing and decreased investment distribution revenue in Hong Kong, with the addition of lower Global Debt Markets and Principal Investments revenue in Global Banking and Markets.

“As the first out the gate for the major UK-listed banks to report this week, HSBC’s results have been long awaited and seen as a bellwether for the global economy,” said Hargreaves Lansdown equity analyst Sophie Lund-Yates.

HSBC commented that net interest income increased across all global businesses on balance sheet growth and rising interest rates.

“Although the economic outlook remains uncertain, the continued upward path of interest rates since our full year results has further strengthened our confidence in delivering a double-digit return on average tangible equity in 2023,” said Quinn.

However, the war in Ukraine served to exacerbate inflationary pressures across the board, resulting in higher ECL charges in Q1 2022.

HSBC confirmed it expected ECL charges to normalise towards 30 basis points of average loans in 2022, projected on the back of current economic consensus forecasts and default experience.

The company said it expected mid-single-digit percentage revenue growth in 2022, with net interest income expected to rise on the back of implied market consensus policy rates improving since the financial group’s 2021 results, and supported by estimated mid-single-digit lending growth.

“The macro environment has been factored into a positive outlook for interest income, but the raising of interest rates is only one consideration. While this helps interest income rise, the wider global economic outlook is much harder to predict,” said Lund-Yates.

“The soaring inflation which these interest rate hikes are designed to address, makes the picture murky. Rumblings of recession chatter are being heard, and if this were to happen, all banks would feel the pinch.”

HSBC suffered a weakened capital position from regulatory changes and market conditions, as measured by the CET1 ratio, leading the firm to comment that future share buybacks in 2022 seemed unlikely.

“An HSBC-specific disappointment is the weaker capital position, which could see the conglomerate fall short of its own target range,” said Lund-Yates.

“This is being caused by a number of unhelpful headwinds, including regulatory changes and a steepening yield curve.”

“The main takeaway from this is that further buybacks are off the table for 2022. That will be a disappointment to banking investors, who may have become accustomed to the glut of buybacks from the sector in recent months.”

XL Media – this really could be a ‘sure bet’ on future growth

Mark Watson-Mitchell
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XL Media – this really could be a ‘sure bet’ on future growth

Eight years ago, when this company floated on AIM, the online gaming market was believed to be worth some $24bn, today it is around $200bn.

Estimates suggest that it could be up to $340bn within five years.

So why is that important when looking at this company?

Simply because the group is a leading provider of marketing services to online gambling operators.

How does it work

It attracts players through online marketing techniques and directs them to gambling operators.

In return the company receives a share of the revenue generated by such players, a fee per player acquired, fixed fees or a mixture of these three income streams.

Obviously, this business model is predominantly performance-based and it aligns itself with the interest and success of the gambling operators.

The company uses a variety of business intelligence tools, in order to track the flow of traffic to its customers and in seeking to identify and target high value consumers for platform operators.

It also uses these tools to analyse the quality and conversion of such traffic into revenue, in order to improve the group’s return on investment, as well as providing high quality services to its affiliates.

Global clients

The group has the stated ambition to combine the power of people, data-driven behavioural insight, and captivating editorial content to build valuable connections between brands and consumers.

It operates across a number of vertical markets including online gambling, personal finance and sports.

The group’s business is best described as that of a global digital performance publisher. 

And it has a very impressive and diverse list of global clients, such as 888 Holdings, mr green, Ladbrokes, Paddypower, betway, Unibet, betsson, William Hill, netmarble, souq.com, traveloka, and product madness amongst hundreds of others.

The company operates branded, content-rich websites, which are underpinned by intelligent market-leading technology and data, aimed at building stronger and lasting relationships with consumers.

It has owned and operated some 2,000 websites, presented in over 18 languages, across 23 countries. Its global business is inclusive of Europe, the US, Latin America and Asia. Today it is brand-led with just under 40 focus sites.

The group seeks to create a balanced portfolio of premium websites to cover a range of attractive geographies, both stable and high-growth verticals, with greater exposure to regulated markets. 

Oversubscribed new issue

Based in Limassol in Cyprus, this group was set up as Webpals Marketing Systems in 2008 and changed its name in 2013 to XL Media.

In March 2014, when the company floated on AIM, there was a significant oversubscription for its fundraising of £41.8m, with its shares at 49p each, valuing the 189.56m shares in issue at £92.9m.

Subsequently the shares more than quadrupled to 212p in January 2018, however the ravages of changing regulations and the global impact of Covid-19 went against the company.

Over the years the company has made several acquisitions and has raised funding through equity issues.

Transformation process underway

Last summer the group started to reorganise its operating platform. That de-risking and rationalisation process has been accelerating since then and should be largely completed by this autumn.

The change will help to diversify the group’s revenues, improve its business mix while at the same time lowering its operational costings.

Obviously, there will have been significant costs involved but they will be taken as ‘exceptionals’. That will not impair the profits about to cascade into the group’s balance sheet.

The group’s strategy is to develop a ‘best-in-class’ asset base, connecting consumers and brands in high growth large regulated markets.

Recently announced results

At the end of last month, the company announced its 2021 results, showing some strong figures.

Revenues for the year to end December were $66.5m against $54.8m previously, adjusted pre-tax profits doubled to $10.5m ($5.3m) and cash and short-term investments were almost doubled at $24.6m ($13.9m).

The 2021 Annual Report will be published on 19 May and the AGM will be 10 June, both events could well merit further publicity for the group, possibly with added Trading Updates and corporate comment.

Looking ahead

The company’s broker is Cenkos Securities, their analyst Simon Strong reckons that revenues will pick up to $69.8m for the current year to end December against $66.5m in 2021.

However, he estimates that adjusted pre-tax profits will leap from $10.5m to $16.7m this year, with earnings of 5.6c per share.

Evidence of the group’s potential shows through in the coming year to end 2023, with $78.4m of sales anticipated, helping to kick profits up to $19.5m, worth 5.7c in earnings.

There will be an impact of the group’s transformational activities, as well as including its acquisitions and fundraisings, so that was always expected to suppress operating profits until completion.

The group has made a number of strategic acquisitions in the last few years and has seen initial equity dilution, but that will wash through in future years.

It is well worth noting that the transformation initiatives will reposition the group for sustainable operational and financial growth.

The biggest emphasis of late has been upon the rapid growth of sports betting sites in North America. It now has ‘live’ operations in 15 states, including New York, which is the No 1 for legalised sports betting, with more under discussion.

That led to the strong performance last year in the group’s North American business, with more than doubled revenues. There really is an excellent scope for the rationale of scalability that lies in its NA operations. It is reported to be outperforming management expectations.

Conclusion

Just a year ago the shares of this online marketing group were trading at around 70p, today they are at just 33.50p, but I now consider that they are really undervalued and could well break way above 50p again within the year.

Hochschild Mining on track to deliver production targets

Natasha Doris
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0
Hochschild Mining on track to deliver production targets

Hochschild Mining shares were up 0.4% to 120.9p in early morning trading on Tuesday, after the company reported that it was on track to meet its 2022 targets in its Q1 production results.

The firm commented that it was aiming for a production target of 360,000 to 375,000 ounces of gold equivalent, and 26 to 27 million ounces of silver equivalent in 2022.

Hochschild Mining also said it was set to deliver its annual costs guidance of $1,330 to $1,370 per ounce of gold equivalent, alongside $18.5 to $19 per ounce of silver equivalent.

The mid-cap mining group announced 47,226 ounces of gold, 2.4 million ounces of silver, 80,889 gold equivalent ounces and 5.8 million silver equivalent ounces in its production over Q1 2022, despite a series of Covid-19-related disruptions to its Argentinian operations.

The firm said it had total cash resources of approximately $367 million at the end of March this year, alongside net cash of approximately $54 million and current net cash/LTM EBITDA projected at 0.153x.

The company further celebrated a slate of operational highlights, including its acquisition of Amarillo Gold on 1 April 2022, which is set to enhance the firm’s portfolio in its addition of a long-life asset in a jurisdiction which supports mining operations.

The group also kicked off a new drilling campaign at its Snip development project in Canada, after a significant boost to resources was announced on 1 March this year.

Hochschild added that brownfield drilling had commenced at all scheduled operations for the year.

“Our flagship Inmaculada operation has delivered a better than expected first quarter of the year and despite our Argentinian operations having faced Covid-related workforce absences and seasonal vacations early in the period, we are on track to meet 2022 production and cost targets,” said Hochschild Mining CEO Ignacio Bustamante.

“We completed our purchase of Amarillo Gold on 1 April and are looking forward to commencing construction at the exciting Mara Rosa project in Brazil in the near future.”

“In addition, we have recently initiated a new drilling campaign at the Snip project in Canada following our announcement in March of a significant increase in resources. Finally, I am pleased to report that our 2022 brownfield exploration programme has commenced at all our operations.”

Diversified Energy acquires East Texas assets

Anshula Kumar
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Diversified Energy acquires East Texas assets

Diversified Energy has acquired several upstream assets and associated infrastructure in East Texas from a private seller announced the company on Tuesday.

The news of Diversified Energy’s acquisition has helped increase its share price by 1.4% to 115p on Tuesday.

The acquisition builds on Diversified’s plans to enter the Central Region in 2021 and accelerates its efforts to replicate the company’s successful business model of high-margin, low-decline production close to its current assets.

Under the previously announced Strategic Participation Agreement, Oaktree Capital Management’s funds will invest a non-operated working interest in the purchase, and Oaktree will promote Diversified with a 5% stake in the acquisition.

Diversified will receive a 52.5% working interest in the transaction in exchange for providing 50% of the purchase price, or $50m, before typical purchase price modifications.

Diversified Energy Acquisition Trade-offs

Diversified Energy’s revolving credit line and cash on hand were used to cover the $50m cash consideration.

Based on the net Purchase Price and $35m in expected Adjusted EBITDA for the following twelve months before any synergies, which means this represents a 1.4x multiple and around 10% are accretive to the company’s Hedged Adjusted EBITDA in 2021.

With net Proved Developed Producing reserves of 18 MMBoe and PV10 of $102m as of the effective date and based on 19 April 2022 NYMEX strip prices, the Net Purchase Price approximates a >PV40 valuation at the effective date of 1 April 2022.

With an anticipated engineered NTM PDP decline rate of 7%, current output (100% natural gas) is 3.7 MBoepd from 691 gross (346 net) operational PDP wells.

High cash margins of around 60% reflect favourably realised hedged pricing and a cost structure that is competitive for Diversified Energy.

Diversified Energy’s Portfolio

Diversified’s Central Region footprint gains scale, which opens up more synergy potential.

This is Diversified’s fifth acquisition in the Central Region in the last twelve months, demonstrating the company’s competence in locating high-quality, reasonably-priced opportunities that fit its asset profile.

Geographic closeness to previously acquired assets from Tanos Energy Holdings III and Indigo Minerals in East Texas and Northwest Louisiana improves asset density within the operating zone and raises the opportunity for developing operating efficiencies.

The company’s Smarter Asset Management initiative will be implemented to improve well performance, minimise labour and vendor costs, return wells to production, optimise artificial lift systems, and reduce overheads.

Diversified has the option to retain experienced staff from the seller during a usual transition service term to compliment the seller’s continuity and consistency of operations and to enable the execution of Smarter Asset Management prospects.

In conjunction with the transaction, Stifel served as Diversified’s exclusive financial advisor.

“With a compelling purchase multiple of 1.4 times net cash flow, this acquisition represents another accretive, fully cash and debt-financed acquisition that further demonstrates our status as a capable consolidator of low-decline producing assets within the Central Region,” said Rusty Hutson Jr., Chief Executive Officer, Diversified Energy.

“Our enlarged regional footprint complements our portfolio of high-quality assets and provides additional scale from which we can derive operational synergies as we optimise asset performance and the associated costs.”

“We are pleased to once again partner with Oaktree to acquire assets with material upside potential available through Smarter Asset Management.”

“Having emerged as a significant operator in the Central Region with a proven track record of execution in Appalachia and a strong balance sheet, we are well positioned to capitalise on additional opportunities.”

Schroders simplifies dual share structure

Anshula Kumar
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0
Schroders simplifies dual share structure

Schroders said on Tuesday that its Board of Directors is announcing proposals for the enfranchisement of non-voting Ordinary Shares by simplifying its dual share structure.

The move by Schroder and its Board will provide all shareholders with the same voting rights because they share the same economic gains and dangers and it will also boost the shares’ liquidity.

Each Non-voting Share will be transformed into one Ordinary Share as part of the enfranchisement, and all re-designated shares will have the same rights as existing Ordinary Shares, including full voting rights.

Holders of Ordinary Shares will receive a bonus issue of three additional Ordinary Shares for every 17 Ordinary Shares held on a record date to be determined as compensation for the diminution of their voting rights under the proposed parameters of the enfranchisement.

The Board thinks that these terms are reasonable for both classes of shareholders and reflect the longer-term discount between the Non-voting and Ordinary Shares.

The proposals will be voted on separately by shareholders of both classes of shares. Further details of the plans, including resolutions on the enfranchisement, will be published in advance of a General Meeting, which will be conducted in due course, and will require 75% of votes cast by each class of shareholders to pass.

The Schroder family’s interests make up about 47.93% of the Ordinary Shares and 20.44% of the Non-voting Shares held by the Principal Shareholder Group (PSG).

Members of the PSG have stated that they intend to vote in favour of the proposals.

Holders of over 40% of the Non-voting Shares have indicated their willingness to support the proposals, along with other non-voting shareholders who have been contacted.

Following the enfranchisement, the PSG will own about 43.11% of the Ordinary Shares.

Michael Dobson, Chairman of Schroders, commented, “The Board believes it is right to enfranchise the Non-voting Shares and that these proposals are in the best interests of all shareholders.”

“In undertaking this important step for Schroders, we are pleased to have an indication from shareholders representing over 47% of the Ordinary Shares and over 40% of the Non-voting Shares that they intend to support the proposals.”

Schroders shares have rose marginally by 0.07% to 2,968p in early morning trade on Tuesday.

Tesla Tycoon Elon Musk to buy Twitter for $44bn

Natasha Doris
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0
Tesla Tycoon Elon Musk to buy Twitter for $44bn

Elon Musk struck a deal yesterday to purchase Twitter for $44 billion, amounting to $54.20 per share in an agreement which will see the Tesla tycoon take on complete ownership of the social media giant.

The $54.20 share price tag represented a 38% premium on Twitter’s closing price on 1 April, the final trading day before Musk revealed his 9% stake in the company.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” said Musk.

“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.”

“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”

https://twitter.com/elonmusk/status/1518677066325053441

The agreement was unanimously approved by the platform’s Board of Directors and is expected to close later this year, pending shareholder approval.

The move followed pushback from Twitter’s Board, which saw executives issue a “poison pill” earlier in April, in a bid to dissuade Musk from a takeover attempt.

However, the Board appeared to change its tune after Musk presented his funding proposal to take the company private under his ownership.

Musk has reportedly secured $25.5 billion in fully committed debt and margin loan financing, alongside an equity commitment of approximately $21 billion.

“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said Twitter independent board chair Bret Taylor.

“The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”

The social media platform confirmed that there are no financing conditions to the closing of the deal.

“Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important,” said Twitter CEO Parag Agrawal.

Tip update: Lok’nStore valuation uplift

Andrew Hore
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Tip update: Lok’nStore valuation uplift

Unusually, self-storage sites operator Lok’nStore (LON: LOK) commissioned a valuation at the half year, prompted by the sale of four sites earlier this year. The uplift in valuation of those sites was so great it was felt that a new portfolio valuation was required.
The disposal happened at the end of January, and it was achieved at 17% above book value. Lok’nStore retains the management of these sites. The disposals will reduce short-term revenues and profit.
The revaluation has helped the underlying NAV of 843p a share – a 48% increase on 12 months before. finnCap believes that the underlyin...

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