After markets closed last night, Vendtek Systems (VSI.V) announced that it has adopted a Shareholders' Rights Plan (SRP). Clearly, this SRP is a prudent response to the accumulation of stock by its Middle East distribution partner. Through Privinvest, its UAE partner has acquired to date nearly 17% of VSI.V shares outstanding via the public markets. As far as I can tell, Privinvest has invested approximately $6.5 million to date based on the price range of accumulation. Within current stock price ranges, it would take approximately $1.0 to $1.2 million to acquire the remain 3.07% of the shares outstanding, which would give Privinvest effective beneficial interest in the Company. In other words, effective control.
The SRP is a tool that gives VSI shareholders an ability to block or delay unsolicited bids in order to maximize share value by creating a bid market through alternatives. Although I believe that a potential creeping takeover bid by Privinvest is essentially friendly, it is a prudent move by VSI management to protect shareholders. VSI is in a very good spot in the market that both its larger competitors, and complimentary payment networks would find valuable.
I suspect that there are to be some fairly major catalysts to be announced either at the end of this year, or early next year that could have positive impact on share value. The interesting question may be - will VSI still be an independent public entity when anticipated catalysts occur?
I do not own shares in Vendtek Systems, nor do I receive compensation from the Company, Management, or the Board.
Showing posts with label Privinvest. Show all posts
Showing posts with label Privinvest. Show all posts
11/18/08
Partner Accumulation of Vendtek System (VSI.V) Stock May Indicate Positive Catalysts
Yesterday, VSI announced that Privinvest Holding SAL of Beirut Lebanon has acquired 915,000 additional shares at between $0.75 anf $0.78, bringing the total effective shares outstanding held by Privinvest to 7,367,500 or 16.3% of the total equity.
The accumulation of shares by Privinvest is notable because it is the investment arm of Vendtek Systems' distribution partner for the Middle East. Earlier this year, VSI and Privinvest entered a 5 year regional deal which includes approximately 17 countries in MENA (Middle East North Africa).
I find it highly encouraging that VSI's operating partner has been accumulating stock throughout the year. The price range has been between $0.70 and $0.90. Currently, VSI generates about $1.0 million in net contribution per annum from the deployment of its software in the UAE, the first market in the region with a pre-paid subscriber based of approximately 6 million.
I estimate that the total number of mobile subscribers in the MENA region is approaching 130 million. Egypt, Saudi Arabia, Morrocco, and Algeria combined represent close to 100 million prepaid subscribers.
Privinvest has invested approximately $5.0 million in its partner VSI because it is likely confident that there are going to be some significant country rollouts soon. Saudi Arabia has been hinted at for for some time, although I think that there may be more than Saudi Arabia to come. If 6 million subscribers can generate $1.0 million in net contribution for VSI, a subscriber base of 30 million offers 5 times the potential income potential, or $0.11 per share in contribution. But that includes only Saudi Arabia. What if there is more?
In addition to its potential in the Middle East, VSI is finally ramping up its US rollout and is expected to be deployed on as many as 200 - 300 terminals per month by January. I firmly believe that the market conditions in the United States are aligned to VSI's success. As early as last December it was clear to me that Vendtek should benefit from an economic recession in the United States. Survey after survey in the United States indicate that consumers consider their mobile subscription to be essential. Surpisingly, most surveyed are willing to give up landline telephones, and cable TV ahead of their mobile phones. However, an increasing percentage of the population does not qualify for post-billing services. As more Americans prepay for their service, I expect that over-the-counter topups will increase in frequency. As the economy declines, and petty crime increases, more and more retailers are likely to opt for more secure electronic topup systems. These two trends should benefit VSI.If the rollouts in the US continue to pick up steam, Vendtek Systems is in an advantageous position.
Privinvest's accumulation of VSI stock hints at the potential for major rollouts in the Middle East, while the US recession pushes more American mobile subscribers towards VSI's solutions. As the world economy contracts, and many Companies struggle for earnings, the future couldn't be brighter for Vendtek Systems. Certainly Privinvest thinks so; and it likely has some pretty good insight on future demand.
I do not own shares of VSI, nor do I recieve compensation from the Company, its Directors, or its employees.
The accumulation of shares by Privinvest is notable because it is the investment arm of Vendtek Systems' distribution partner for the Middle East. Earlier this year, VSI and Privinvest entered a 5 year regional deal which includes approximately 17 countries in MENA (Middle East North Africa).
I find it highly encouraging that VSI's operating partner has been accumulating stock throughout the year. The price range has been between $0.70 and $0.90. Currently, VSI generates about $1.0 million in net contribution per annum from the deployment of its software in the UAE, the first market in the region with a pre-paid subscriber based of approximately 6 million.
I estimate that the total number of mobile subscribers in the MENA region is approaching 130 million. Egypt, Saudi Arabia, Morrocco, and Algeria combined represent close to 100 million prepaid subscribers.
Privinvest has invested approximately $5.0 million in its partner VSI because it is likely confident that there are going to be some significant country rollouts soon. Saudi Arabia has been hinted at for for some time, although I think that there may be more than Saudi Arabia to come. If 6 million subscribers can generate $1.0 million in net contribution for VSI, a subscriber base of 30 million offers 5 times the potential income potential, or $0.11 per share in contribution. But that includes only Saudi Arabia. What if there is more?
In addition to its potential in the Middle East, VSI is finally ramping up its US rollout and is expected to be deployed on as many as 200 - 300 terminals per month by January. I firmly believe that the market conditions in the United States are aligned to VSI's success. As early as last December it was clear to me that Vendtek should benefit from an economic recession in the United States. Survey after survey in the United States indicate that consumers consider their mobile subscription to be essential. Surpisingly, most surveyed are willing to give up landline telephones, and cable TV ahead of their mobile phones. However, an increasing percentage of the population does not qualify for post-billing services. As more Americans prepay for their service, I expect that over-the-counter topups will increase in frequency. As the economy declines, and petty crime increases, more and more retailers are likely to opt for more secure electronic topup systems. These two trends should benefit VSI.If the rollouts in the US continue to pick up steam, Vendtek Systems is in an advantageous position.
Privinvest's accumulation of VSI stock hints at the potential for major rollouts in the Middle East, while the US recession pushes more American mobile subscribers towards VSI's solutions. As the world economy contracts, and many Companies struggle for earnings, the future couldn't be brighter for Vendtek Systems. Certainly Privinvest thinks so; and it likely has some pretty good insight on future demand.
I do not own shares of VSI, nor do I recieve compensation from the Company, its Directors, or its employees.
Subscribe to:
Posts (Atom)