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Monitise – from 80p in 2014 and “well placed” at approaching 6p in 2015 to a recommended offer… at 2.9p!

By Steve Moore | Tuesday 13 June 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Having previously attracted some adverse comment for bearishness on Monitise (MONI) – including at 50p+, I note the shares currently trade approaching 22% higher today, at 2.80p, on the back of a recommended cash offer for the company.

The offer, from S&P 500 financial services technology company Fiserv, is at 2.9p per share, totalling approximately £70 million. It is emphasised to represent a premium of 26.1% to the prior closing share price, 24.2% to the volume weighted average closing price of the most recent three month period and 53.5% on a cash adjusted basis. Monitise Chairman, Peter Ayliffe, adds “recognising the growth challenges we continue to face, we believe that Fiserv's all-cash offer provides shareholders with certainty of value at a level in excess of the risk adjusted prospects of the Monitise group on a standalone basis”.

Shares in Monitise reached 80p as recently as early 2014, but warnings proved prescient as by October 2015 they had slumped to below 3p. The highest since has been approaching 3.8p, with they having commenced 2017 at 2.81p and recently sliding back further.

The initial slump to below 3p was from approaching 6p on the back of a results announcement which included Peter Ayliffe emphasising “we are confident that Monitise is well placed to deliver value for shareholders as we serve our clients and partners” and “pleased to announce the appointment of Lee Cameron as CEO”. With the shares at over 2.6p in February, Cameron emphasised “our transformation programme is nearing completion, and continued half on half EBITDA profitability demonstrates that it is working… We believe that the market for our products and services is increasingly moving in our direction, and I remain positive about the future of our business”.

Now though the board are unanimously to recommend a 2.9p per share offer. Hmmm!

Shareholders have a right to feel aggrieved based on prior management statements of the like highlighted, but we have consistently warned – most recently HERE.

As such, although there is still currently some upside to the prospective 2.9p and the possibility of a competing offer, the risk of being left holding this cash guzzling disappointer sees me still continue to avoid – and if I held would see me content to bank what is now on offer.

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