Avesco - value realised after recommended offer

Regular readers of my blog will know that I've been a fan of AIM listed Avesco since 2009. I picked up the majority of shares in the company at prices between 20p-25p, and had been bleating on about how undervalued the company was throughout the following 6/7 years. Avesco has been a terrific progressive dividend payer including a special dividend of £1.10, and until yesterday the shares had increased around 10 fold in that period of time. Yesterday it became more than 20-fold after NEP launched a recommended bid at 650p per share.

My sincere thanks go to a fabulous management team and brilliant work force that have enabled this to happen. We shareholders merely piggyback their hard work and success, and I'm hugely grateful for all their efforts.

I have in the past hinted that a bid approach was highly likely, and indeed on October 1st of this year guesstimated what the shares could be worth:-

http://michae1mouse.blogspot.co.uk/2016/10/avesco-massive-upside-potential.html

"On last year's figures alone that gives fair value of £4.50-£6.00 for operating profits or £5.40-£7.20 working with trading profits."

http://michae1mouse.blogspot.co.uk/2015/01/playing-long-game.html

"Finally, Murray holds near 30% of the company and is 65 years old or thereabouts. When he eventually chooses to retire (of course he may decide to continue for some time yet), he might well wish to cash in his holding. If I was him, I'd be looking at far more than EBITDA for my holding. How does 3 or 4 times EBITDA sound?"

http://michae1mouse.blogspot.co.uk/2016/06/avesco-interims.html

"The margin of safety remains high here, and as mentioned before, the group is always vulnerable to a opportunistic bid."

Should you cash in your shares now or wait for the deal to complete? From the announcement I'd estimate that the chances of the deal going through are extremely high. However, the deal could collapse in unforeseen circumstances or alternatively it might attract a rival bid at an even higher price? On balance, investors will probably be swayed by how many shares they own. If you hold very few then you might be tempted to cash in, if you own a substantial number then 15p/20p per share extra is a lot of money, and you might be tempted to see it out.

I tend to look at it like this. The bid approach has given investors a true picture of Avesco's worth, if the deal fell through (although highly unlikely in my opinion) then you're still left holding a terrific company with plenty of cash, paying substantial dividends. It might even be worth £8+ in a year or two. You also have a chance that a rival bid emerges. Anyway, it looks pretty much a done deal to me and investors should make their own choice depending on individual circumstances.

Once again "Hats Off" to all the Avesco team.