Bid for HWSI Realisation – To our shame, we missed this story yesterday morning – Cubitt Trade Holdings has made a recommended cash offer for HWSI Realisation at 55.5p per share.
The offer values HWSI at about £79,642,300. The price is a 91.38% premium to the closing price of 29p on 21 July 2020 and a discount of approximately 11% to the last published NAV of 62.36p on 30 June 2020.
The people behind Cubitt are the PETRA Group, a privately held independent group that was founded in 2011. It is in the business of acquiring non-bank financial firms and then funding and managing those firms post-acquisition. Since its establishment, the PETRA Group has successfully completed over ten acquisitions in the United Kingdom, North America and South America, including the acquisition in November 2019 of Pulse Factoring Solutions Limited, which is a customer of the company.
The PETRA Group is majority owned and controlled by the founders and its management team. The founders are also the sole directors of Bidco and PETRA Group Holdings Limited and, together with the management team, are based in London and New York. Prior to establishing the PETRA Group, the founders were senior managing directors at bulge bracket investment banks working predominantly in capital markets.
Holders of more than 75% of HWSI’s shares have already made irrevocable commitments to the bid.
[This is a remarkable vote of confidence in the portfolio and a good result for shareholders. Following on swiftly from the M&G approach for UK Mortgages, it might question whether investment company investors are mispricing these debt funds. To be honest, that’s very hard to call as we just don’t know enough about the underlying portfolios.]