Stilo de-lists.

Following on from a blog post I penned back in April, Stilo International will de-list from the AIM market tomorrow (Tuesday 8th October) :-

This is April's blog post giving my thoughts at that time:-

http://michae1mouse.blogspot.com/2019/04/a-de-listing-bring-it-on.html

There's not a huge amount to add other than I've retained my entire holding in Stilo International and remain cautiously optimistic for the future.

The interims were released with a notice of their intention to de-list, and as anticipated the outlook for this year is lacklustre at best. There was a tender offer of 1p to purchase shares from private shareholders, but it appears that almost all private shareholders (like myself) have passed on the tender offer and are happy to hold their shares in the private company. Indeed it was pretty much a no-brainer since if you'd wished to sell out some or all of your holding since the de-listing announcement it's been possible to sell shares significantly above 1p. It should be noted that the company did buyback over 15,000,000 shares from Giltspur and Brewin nominees at 1p to reduce the share capital to around 98,000,000. It also worth mentioning that C.Lee has been acquiring shares and now owns over 10% of the company.

I am very happy that the company has de-listed since it doesn't need to raise funds from the market with a very solid debt free balance sheet and a cash balance (last reported) of over a £1m. This is against a market cap. that had fallen to around the company's cash level. The saving over £120,000 per annum on listing costs will be very significant for the company. In fact £120,000 represents around a 0.12p possible dividend. If you were lucky enough to get shares for around 1p then that's a 12% return. I expect dividend payments to return very soon following their de-listing.

From the General Meeting circular issued in August
(http://www.stilo.com/wp-content/uploads/2019/08/General-Meeting-Circular-23-August-2019.pdf), we also had this included in their reasons to de-list:-

"the Directors believe that the Company’s AIM-quoted status – in which the Company has a tangible share price and hence a perceived “value” - has presented a significant barrier, in practice, in advancing M&A discussions with potential acquisition candidates. Additionally, the Board’s experience is that many privately owned companies are not attracted by the prospect of acquiring, or becoming part of, a publicly traded company. The Directors believe that if the Company was off the market, it might be possible to command a much higher company valuation than that which is currently reflected in our share price."

My guess is that the company will return to profits and cash generation in the not too distant future and then sell the company at a hefty premium to its listed market cap.

Anyway, I'll keep you posted, and it'll be interesting for me since it's the first time I'll have held shares in a private limited company.