After years of attracting ridicule as the company that failed to live up to its name, Monitise could finally be put out of its misery. The mobile payments company recommended an all-cash offer yesterday from Fiserv, a US-listed financial services technology company, at 2.9p a share, a premium of 26.1 per cent to the undisturbed price on Monday and valuing Monitise at about £70 million.
Monitise was once a stock market darling, valued at more than £1 billion, and among the pioneers of the UK’s fintech industry before the company came crashing to earth. A stream of revenue warnings, management departures and an aborted sale has left Monitise’s share price and its reputation in tatters. Investors who had backed the company, including a £109 million placing at 68p a share in 2014, were carried out long ago. Monitise has struggled to recover from Visa, a long-time backer, announcing plans in September that year to sell its stake and to lessen its dependence on external mobile developers. It was a move that hammered Monitise’s market value and a blow from which it has not recovered.
Since then Monitise has been seeking to stabilise the business, cutting hundreds of jobs and fixed costs. Despite the restructuring the Aim-quoted company has continued to suffer a decline in topline growth and attempts to sell its new product, Finkit, have proved challenging. Monitise revealed the extent of that yesterday when it said it was yet to sign its first contract for the technology, partly because of intense competition in a crowded market but also because of concern among banks and the like over the strength of its finances.
Directors, including Lee Cameron, the chief executive, who collectively speak for 0.15 per cent of the shares, have backed the deal.
Given its problems, investors might be minded to take the hit and walk away. If bulletin boards are a good barometer, however, some shareholders may be defiant, perhaps hoping Fiserv’s approach flushes out a competing offer. Monitise has a large retail investor base and reaction was varied on bulletin boards, and advisers were watching closely.
Potentially, then, Monitise could struggle to get the deal approved. It needs the support of a majority of voting shareholders, representing at least 75 per cent of the value of the shares voted. The shares rallied, closing up 22 per cent, or ½p, at 2.81p.
MY ADVICE Sell (accept offer)
WHY The shares have failed to recover and a turnaround seems unlikely
Evgen Pharma
Evgen Pharma is at the heart of an area of huge scientific interest. The Liverpool-based drug developer raised £7 million through an initial public offering in October 2015 to finance two clinical trials of sulforaphane, a compound found in broccoli. It hopes to use a synthetic version to treat advanced breast cancer and a rare form of stroke called subarachnoid haemorrhage.
Using its product called SFX-01, Evgen began the trials last year and is scheduled to unveil the results in the second half of next year.
The company is considering options to partner a bigger pharma company which, if the phase two trials are positive, would run the phase three trials and then look to commercialise the drug.
That scenario playing out is not without significant risk for the board and investors, which include institutions such as Axa Investment Managers. The company is likely to need to source fresh funds before the end of the phase two trials.
Evgen posted annual results for the year to the end of March showing cash of £3.9 million, down from £7.1 million. The shares, which floated at 37p, trade at a discount to that level, closing down 1¾p at 17½p.
MY ADVICE Hold
WHY The company is a leader in its field and could attract a commercial partner if trials are positive
Spire Healthcare Group
Since announcing that Rob Roger would step down as chief executive last year, Spire Healthcare Group has endured upheaval in the boardroom. Yesterday there was no let-up.
The FTSE 250-listed company said that Garry Watts, who had temporarily stepped into the role of executive chairman, had been diagnosed with a medical condition and was undergoing treatment that could mean he will need short periods away from the business over the coming months. Mr Watts will revert to non-executive chairman and Simon Gordon, Spire’s chief financial officer, has been promoted to interim chief executive.
The hunt for a permanent chief executive has been launched, with internal and external candidates under consideration. It comes after Spire said in December that Andrew White, the chief operating officer and considered a future chief executive, was receiving medical treatment and that an external replacement had been appointed.
The changes at the top come at a testing time for the business. The shares fell sharply in January when the company said 2016 underlying earnings had been hit by delays in the redevelopment of St Anthony’s hospital in southwest London and that results would be flat this year, before recovering from 2018.
The shares remain below the 400p that they peaked at in October amid speculation that Mediclinic, the overseas healthcare group that owns 29.9 per cent of Spire, could make an approach. Such a bid remains a possibility.
MY ADVICE Buy
WHY Underlying business performance more stable and is potential takeover target
And finally . . .
As students celebrate the end of the exam season Watkin Jones, one of the biggest providers of accommodation, has completed the forward sale of a portfolio of six developments.
The buyer is Europa Generation, an institutional investor, and Watkin Jones will receive about £153 million over the course of the development. The deal means it has now forward sold all of its developments that are planned for completion by September 2018, further supporting shares, which closed at 178¼p yesterday, up ¾p.
