Invesque Ord Shs T.IVQ

Value of U debentures

[Capharnaum]

The value of the U debentures, if the "offer" by Invesque is accepted, is estimated to be about $80 per $100. Bad offer considering the debentures were valued over $90 (before the offer), so if you hold some and haven't voted, put your vote AGAINST the proposition.

That said, if the proposition is rejected, then the value of the U debentures should rally to around $95. Even if Invesque pays partly in shares, considering they will have to offer a 5% discount to market value at the date of the payment, even at $95 this means buyers will get a 10% total discount in buying the debenture (instead of stock on the market).

So, at the current price of $80, the downside risk is limited but there's a good upside if the debenture holders vote in their best interest AGAINST the proposition, as the price should pop up.

Brutal that the management would offer such a bad deal to the holders of the debentures that it would crash its value and be a lot more valuable with a rejection of the offer. Hopefully, they see enough vote against that they cancel the meeting/offer or just come up with a better offer to vote on.

[Stratocheif]

I think its a done deal. Most of this debenture is held by funds and they will vote for it because thats what they want. They probably assesed the risk here and decided they wanted some of thier money back. For ivq its a bad deal but they probably had no choice. If you had 12000 there and got 600 a year interest after the change you still get 600 a year and you only have 9300 or so tied up there

[Capharnaum]

Nope, I checked and the two main funds don't hold a single debenture. There ain't no holders above 10% either. They say in the prospectus that if they receive 66% early, they will cancel the meeting. If it was a done deal, it would already have been announced. For IVQ, it's a really sweet deal. If they went to the market, they would have to offer new debentures at 8% and $3 conversion

[pjn0987654321]

Seems odd to me that the debenture holders are all small retail.   I would have expected to see various funds, many of whom would have bought at par and be looking at a loss position and as stratochief says, be willing to accept the offer because of same payment and free up some of their money, the market being too thin to sell all at once.  Maybe your source is in error?  

[Capharnaum]

If you look at the common stock, Tiptree owns 30% and Magnetar own 26%. Then, the next largest public holders are Dimensional Fund at 0.7% and Scott White at 0.54%. I've verified and both Tiptree and Magnetar don't hold convertible debentures (either series). Magnetar had a $10M loan that they got reimbursed in cash a few months ago. No other holders own 10% either, so at best a couple of

[Stratocheif]

I guess you bought them at recent market price. But many investors bought them near par years ago. So for us there us no advantage to selling or evaluating what benefit may be had from getting shares. Ive seen companies convert to shares only to see the sp drop big time after so how am i gonna get my money back having bought at par. I may be wrong about who holds these debentures but i dont see it

[Capharnaum]

Well... if the deal is rejected and they announce they will pay in shares, you could sell your debentures before the conversion for a price upwards of $90 (probably around $95). If you accept the deal, you will receive $22 instead of $90-95 and then your new issue will be worth about another $50-60, up to $78 if you hold them and they don't devalue them again in three years. I don't know

[Capharnaum]

I also want to add that they didn't have to try and force the deal for all holders. They could have made the offer so that those voting against would see the date and conditions extended, and they could have told those voting against would be redeemed at 22% cash + shares (or whichever combo they would have done). If the offer was that "interesting", surely this wouldn't have

[Capharnaum]

I made a mistake there, those voting for would see the date and conditions extended (rather than against)... When there isn't a third party to evaluate the offer, usually, that's how it works, holders can take the offer and get new terms or get out if they don't like it, which means it somehow reflects market value (otherwise too many would get out), without screwing anyone.

[pennydredful]

You  are   doing   a  superlative   job   making   the  case   for   the debenture holders  .  Some  nay sayers   interests  may   be aligned  with   the  equity  holders   so   their   opinion   may be bias .

[Capharnaum]

Also, if rejecting the deal was a matter of going concern, they would have been required to write it in the prospectus. They clearly write that if the deal is rejected, they will fund it otherwise, citing cash, other debt, and at worst shares at a 5% discount (basically, you get $105.2 worth of shares per $100 of debentures if they were to fully pay with shares). Since they already offered to

[2young2invest]

I have a feeling that while @Capharnaum is quite convincing he is not toally objective here, as he bought debentures cheap and was expecting to get cash and move on. I wass expecting the same, but I'm as also a shareholder, so this is NOT big funds shareholders vs small debentureholders as you are trying to make everyone believe. Indeed, this is shareholders vs debentureholders kind of

[Capharnaum]

Like I've pointed out, I've bought a good number of debentures before the pandemic. In fact, if I hadn't bought as many debentures over $90 as I have and wouldn't face a decent loss due to the offer (around $50k), I would just say f*** this management and move on. All I want is terms that are fair when compared to the convertible debentures issues on the market. No one has come out

[2young2invest]

I understand your point of view, and I'm not implying that you were unfair. I'm 100% on your side as a debentureholder. But there is just another side of the story. If IVQ offer is voted down, what are the consequencies for shareholders? - Being diluted - Taking on more expensive debt to paydown debentures. - Using all the cash - Dumping properties at fire prices - Combination of those

[pennydredful]

debenture  holders    care   squat   about    shareholders.

[Capharnaum]

Let's consider what has happened in the last three years: - Management loaded up debt to a high level while maintaining a really high dividend on the common shares - Management made loans to different parties which they were unable to recover (over $30M USD) - When covid hit, they still maintained that they wanted to make acquisitions (and made a few early on) This is precisely what put them

[pennydredful]

[pennydredful]

Their   game  is   low   ball   ,  high ball.  They  make   a  low   ball   offer    80%   expecting  it   to   be  rejected  ( with   retail  holders one never knows)  .Then   when  they  see  the

[feellrich]

Thaks for your impressions I wonder What effect on value off the V debentures closing in 2023  if eventuality oof offer  is accepted or not .. I think they might have a greater vallue Any thoughs ?

[Capharnaum]

If the offer is accepted, it's quite possible that the V debentures carry higher value post conversion than the U debentures. However, if the offer is accepted, there will also be a lingering risk for V holders that they will receive an offer like the U holders that's not so attractive, so it might limit its upside. There will be a big question mark on whether they will try to force all

[Capharnaum]

As to a straight comparison, since the offer is 22% cash and the rest as a debenture, at the ask price of $77, the market is anticipating that the new debentures will trade at $70 (compared to current V debentures price of $73).