ricoh grows in value......according to wasps

Discussion in 'Wasps' started by singers_pore, Jun 29, 2017.

  1. singers_pore

    singers_pore Well-Known Member

    Joined:
    Mar 21, 2011
    Messages:
    1,643
    Likes Received:
    1,029
    Location:
    San Marino, CA
    Credit:
    £287.46
    The latest Arena valuation is 60 million pounds as of March 2017. o_Oo_O

    I would love to see the spreadsheet that they used in order to come up with that valuation. :finger::finger:

    I would not be able to sleep at night if I was one of the partners of the firm who provided that valuation.
     

    Attached Files:

  2. Captain Dart

    Captain Dart Well-Known Member

    Joined:
    Oct 26, 2013
    Messages:
    8,573
    Likes Received:
    3,663
    Credit:
    £2,274.79
    Whatever your views (or my views for that matter) on the accuracy of the report it means Wasps have fulfilled the security requirements of their bond agreement unless that valuation is challenged. I think the value only has to be more than the bond issue of £35M).
     
  3. Nick

    Nick Administrator

    Joined:
    Feb 25, 2008
    Messages:
    101,538
    Likes Received:
    36,133
    Location:
    Coventry
    Credit:
    £13,837.32
    You would think surely that's music to SISU's ears as they are just about to go to court about Wasps purchasing the Ricoh for £5m. Not saying it's a smoking gun by any means.
     
  4. crowsnest

    crowsnest Active Member

    Joined:
    Mar 24, 2011
    Messages:
    556
    Likes Received:
    34
    Credit:
    £87.50
    Gone into a lot of detail with that valuation - license with London Wasps and Coventry Football Club
     
    Astute and NorthernWisdom like this.
  5. Astute

    Astute Well-Known Member

    Joined:
    Aug 2, 2011
    Messages:
    28,469
    Likes Received:
    12,668
    Location:
    Cumbria
    Credit:
    £19,750.53
    How much did Joy value it as confirmed in a court of law?

    Yes she said it was valueless. So how can she argue with someone paying 5m more than the value? Then the loan held against the arena was paid off. So that puts the price paid up even more for something of no value.

    Smoking bomb? More like a substandard firework that fizzled out.
     
  6. Nick

    Nick Administrator

    Joined:
    Feb 25, 2008
    Messages:
    101,538
    Likes Received:
    36,133
    Location:
    Coventry
    Credit:
    £13,837.32
    She said the Higgs 50% was worthless didn't she at a time without a massive lease?
     
  7. Astute

    Astute Well-Known Member

    Joined:
    Aug 2, 2011
    Messages:
    28,469
    Likes Received:
    12,668
    Location:
    Cumbria
    Credit:
    £19,750.53
    You have the legal right to extend a lease that has less than 50 years to run. There is a formula that has to be followed to make sure nobody gets ripped off.

    So if the Higgs 50% didn't have any value how much would the other 50% be worth?
     
    The Reverend Skyblue likes this.
  8. Nick

    Nick Administrator

    Joined:
    Feb 25, 2008
    Messages:
    101,538
    Likes Received:
    36,133
    Location:
    Coventry
    Credit:
    £13,837.32
    Surely depends if it's 50% with the option to buy the other 50% or not?

    If they are going to court based on an argument of that surely it's obvious they will use the fact they paid 5-6m and it's now valued at 60m?
     
  9. Astute

    Astute Well-Known Member

    Joined:
    Aug 2, 2011
    Messages:
    28,469
    Likes Received:
    12,668
    Location:
    Cumbria
    Credit:
    £19,750.53
    A sports arena without a sports team has no value. The arena didn't have one. The local team stated several times that they were not interested. As we all know it was Joys plan. It was stated that it was valueless then. Now there are two sporting clubs using it.

    Shouldn't Joy be taking Wasps to court as they paid too much?
     
    martcov likes this.
  10. Nick

    Nick Administrator

    Joined:
    Feb 25, 2008
    Messages:
    101,538
    Likes Received:
    36,133
    Location:
    Coventry
    Credit:
    £13,837.32
    Did they pay too much then?

    She stated the Higgs share was worthless, Wasps for the lot for 5/6 million with a 250 year lease and it suddenly went up to 60m.

    You have to look at which angle they will try and go for which is all I am saying.
     
  11. Astute

    Astute Well-Known Member

    Joined:
    Aug 2, 2011
    Messages:
    28,469
    Likes Received:
    12,668
    Location:
    Cumbria
    Credit:
    £19,750.53
    What is wrong with looking at the counter angle? You are looking at the side where Joy and Fisher will have contradicted themselves if it is the angle they go for. Not the best way to take a case to court is it?

    To me the deal done between Wasps and CCC included the condition of the loan being paid off. This meant that they put a total of about 20m into something making a loss and had no tenant with a massive amount of money owed on it and no sign of being paid off. Now it has two sporting clubs using it. Of course the value would go up.
     
  12. Nick

    Nick Administrator

    Joined:
    Feb 25, 2008
    Messages:
    101,538
    Likes Received:
    36,133
    Location:
    Coventry
    Credit:
    £13,837.32
    I've never said they are going to go into court and absolutely "batter" it, I've said quite the opposite.

    Do you not think they are going to bring the massive rise in valuations and what they paid into it? A contradiction wouldn't be something new either would it?
     
  13. shy_tall_knight

    shy_tall_knight Well-Known Member

    Joined:
    Aug 1, 2011
    Messages:
    2,576
    Likes Received:
    430
    Credit:
    £154.20
    I know OSB58 and others would challenge this but the £5m is not the true purchase price of the Ricoh, it might be the legal purchase price but the Ricoh did come with a large loan £14m amongst other assets / liabilities. It was still a bargain at £19m bujt isn't that the true commercial cost to WASPS for acquiring the Ricoh. That is why they borrowed the big sum to buy the shares to pay off the loan and to repay the owner's loans to WASPS.
     
    Astute likes this.
  14. Captain Dart

    Captain Dart Well-Known Member

    Joined:
    Oct 26, 2013
    Messages:
    8,573
    Likes Received:
    3,663
    Credit:
    £2,274.79
    That argument is so yesterday..
     
  15. Captain Dart

    Captain Dart Well-Known Member

    Joined:
    Oct 26, 2013
    Messages:
    8,573
    Likes Received:
    3,663
    Credit:
    £2,274.79
    Also ISTR from JR1 the council did various valuations (19/06/2012 Report by Price Waterhouse Coopers on ACL valuation) and the value increased with an anchor tenant, however fragile City's continued stay is there are now effectively 2 anchor tenants (+ other minor teams) and the lease is longer which is what SISU wanted to do to add value anyway.
     
  16. Astute

    Astute Well-Known Member

    Joined:
    Aug 2, 2011
    Messages:
    28,469
    Likes Received:
    12,668
    Location:
    Cumbria
    Credit:
    £19,750.53
    And could well be so much tomorrow.
     
  17. Astute

    Astute Well-Known Member

    Joined:
    Aug 2, 2011
    Messages:
    28,469
    Likes Received:
    12,668
    Location:
    Cumbria
    Credit:
    £19,750.53
    You seem to have tried hard to show they have a case though. All I have done is shown how easy it would be to defend the case if it happens.

    All I can see is SISU not getting the nod for JR2 to start with and then putting in an appeal until they get a judge who decides there might be a case to answer. As we all know it isn't what happens in the future. It is what happened at the time. Even Fisher kept continually saying that they wanted an independent valuation. Would he have said that if it would have been valued at 60m at the time? No. It would have been worth less than the loan on it. And we already have the verdict of there being nothing wrong with the loan.
     
    Captain Dart likes this.
  18. Nick

    Nick Administrator

    Joined:
    Feb 25, 2008
    Messages:
    101,538
    Likes Received:
    36,133
    Location:
    Coventry
    Credit:
    £13,837.32
    No, I have said for months they won't win. As soon as it was announced.

    All that will happen is we find out a few things that are a bit dodgy but all above board etc.
     
  19. Astute

    Astute Well-Known Member

    Joined:
    Aug 2, 2011
    Messages:
    28,469
    Likes Received:
    12,668
    Location:
    Cumbria
    Credit:
    £19,750.53
    I haven't said that you seem to think that they will win. I said that it seems that you are trying to put an argument together on their behalf.

    We would all love something to happen where we get the Ricoh back. We would all love a lump of money to go to our club. I would love to see anyone who did anything wrong have to answer for what they have done. But all that will happen is a waste of time, money and division caused when hopefully we are having a good season.
     
    Captain Dart likes this.
  20. Nick

    Nick Administrator

    Joined:
    Feb 25, 2008
    Messages:
    101,538
    Likes Received:
    36,133
    Location:
    Coventry
    Credit:
    £13,837.32
    Im sure they dont need a stranger on the internet to put an argument together, they will have lawyers.

    I am just saying that's the angle they will likely take and it is bound to be used at some point by their lawyers.
     
  21. NorthernWisdom

    NorthernWisdom Well-Known Member

    Joined:
    Apr 23, 2013
    Messages:
    19,308
    Likes Received:
    14,870
    Credit:
    £3,377.39
    You should be charging £250 an hour for this insight.
     
    Sick Boy and Nick like this.
  22. Nick

    Nick Administrator

    Joined:
    Feb 25, 2008
    Messages:
    101,538
    Likes Received:
    36,133
    Location:
    Coventry
    Credit:
    £13,837.32
    That all? ;)
     
  23. Astute

    Astute Well-Known Member

    Joined:
    Aug 2, 2011
    Messages:
    28,469
    Likes Received:
    12,668
    Location:
    Cumbria
    Credit:
    £19,750.53
    I'm sure that the defence lawyers don't need a stranger on the internet to put a defence together.

    I am just saying what defence will be put forward if SISU contradict themselves again.

    All we can hope for is a smoking gun this time. But whatever happens I can't see our club getting any benefit at all. Unless SISU finally decide to sell to the highest bidder and go that is.
     
  24. oldskyblue58

    oldskyblue58 CCFC Finance Director

    Joined:
    Apr 16, 2010
    Messages:
    8,985
    Likes Received:
    13,507
    Location:
    Coventry
    Credit:
    £2,204.30
    You are quite right I disagree they haven't paid £14m they have replaced one loan with another. Overall cost nil. They also replaced part of the owners loan again in real terms no change just different lenders. They raised additional funds above that to invest in the infrastructure and to cover first three interest payments.

    The share price included all assets less all liabilities including the loans of£14m
     
    Grendel likes this.
  25. oldskyblue58

    oldskyblue58 CCFC Finance Director

    Joined:
    Apr 16, 2010
    Messages:
    8,985
    Likes Received:
    13,507
    Location:
    Coventry
    Credit:
    £2,204.30
    What wasps bought in 2014 was the net value of ACL without wasps. What was valued in 2015 was a long lease with wasps. Two different things and the valuation in 2015 is not the net worth of acl

    They should have had to buy ACL with a long lease but then again I have never understood why the original lease was under 50 years and cost 21m
     
    NorthernWisdom and Grendel like this.
  26. oldskyblue58

    oldskyblue58 CCFC Finance Director

    Joined:
    Apr 16, 2010
    Messages:
    8,985
    Likes Received:
    13,507
    Location:
    Coventry
    Credit:
    £2,204.30
    Assuming they have used proper principles and PI insurance then I would guess they would sleep soundly.

    Thoughts
    Two different valuers have arrived at values over 40m
    The value has gone up despite no stadium sponsorship
    The value has gone up despite no long term agreement with Ccfc
    Does an increased value create room to do a better deal with Ccfc albeit it might require new owners because the value is income based isn't it. Therefore a higher overall value could release income streams without affecting the bond covenants
    Why couldn't the old and new valuation of the lease be correct? What are the reasons it is wrong
    Could it be using recognised professional valuation techniques actually gives these figures.
    I assume that this puts the wasps group balance sheet well in to the positive
    This and the previous valuation has no relevance to the share price in 2014.

    Yes I am surprised at the values but are they wrong?
     
  27. Captain Dart

    Captain Dart Well-Known Member

    Joined:
    Oct 26, 2013
    Messages:
    8,573
    Likes Received:
    3,663
    Credit:
    £2,274.79
    I always assumed it was loosely tied to the shortfall in finance to build the stadium complex. Someone had to pay for it after it cost CCC around £20M to buy the land off HGB.
     
  28. oldskyblue58

    oldskyblue58 CCFC Finance Director

    Joined:
    Apr 16, 2010
    Messages:
    8,985
    Likes Received:
    13,507
    Location:
    Coventry
    Credit:
    £2,204.30
    I agree. It was not valuation based but a ransom payment. A payment that hamstrung the stadium from day one and in turn affected ccfc
     
  29. Captain Dart

    Captain Dart Well-Known Member

    Joined:
    Oct 26, 2013
    Messages:
    8,573
    Likes Received:
    3,663
    Credit:
    £2,274.79
    I wonder if the Council QC will use the statements of SISU's QC in JR1 in the defence he puts forward, it seems to me that JR2 and JR1 are mutually contradictory positions.
     
    Astute and stupot07 like this.
  30. stupot07

    stupot07 Well-Known Member

    Joined:
    Mar 20, 2011
    Messages:
    24,101
    Likes Received:
    8,330
    Credit:
    £1,252.55
    I wonder if this new valuation will have any impact on thr JR. If the valuation is to believed then the council and higgs got robbed. It also begs the question, and one OSB has been stating for sometime - when ACL were struggling why didn't they just extend the lease to create more value to ACL? Selling a 200 year extension for £1m after selling your shares for £2.7m looks terrible business and doesn't look like they got tax players value for money. (Again this is if the valuation is to be believed, and yes wasps being there adds to the value).

    Great question OSB - 50 year lease = £21m, 200+ year extension = £1m.

    The council put itself under pressure from the start by doing that with the lease.

    Sent from my SM-G930F using Tapatalk
     
  31. oldskyblue58

    oldskyblue58 CCFC Finance Director

    Joined:
    Apr 16, 2010
    Messages:
    8,985
    Likes Received:
    13,507
    Location:
    Coventry
    Credit:
    £2,204.30
    Neither of the Wasps valuations should impact on the JR, although no doubt it will be argued that it should. The extension did not exist, there was an intention yes but no actual extended lease to purchase as part of the net worth of ACL in October 2014 (extension not signed until January 2015 so was created then)

    Could ACL have afforded on its own the purchase of the extension prior to the Wasps deal? But how when they had no funds? How when by common consensus ACL was in 2014 a lame duck white elephant on the brink of going bust?

    Wasps bought ACL as it was, not as it would be under their ownership. ACL owned and still owns the leases. Only ACL could buy a lease extension, it was worthless in the open market to any other entity because you had to own the original lease to get the extension. The lease acquired by ACL was dependent on Wasps being able to acquire the Charity shares as well, which was a separate deal or portrayed as such (it can be shown to have different timing and terms). The sale by the Charity is not subject to the JR - but they are classed as interested parties in the CCC case.

    A judge will deal with what was at the time of the CCC decision, and the worth to CCC of what was in 2014 even if they got it wrong in originally setting up ACL with a 50yr lease not a 250 year lease, He will not deal with what it later became valued at under someone else's ownership or investment or what was later created. He will consider the logic, the chronology, the facts to the decision at the date it was taken. The JR deals with the procedures used by CCC in arriving at the decision, and if they were reasonably based on recognised valuation models then it will be hard to overcome the decision made

    Say the value to CCC could be based on the net present value of the additional income streams it would receive from the extended lease. I don't think they would have been receiving much, just a ground rent perhaps. For example the net present value of say £50000 over 250 years at 5% interest is £1m. instead of getting £50k pa they got a one off £1m

    Councils are allowed to value things in terms other than monetary, so was the value to CCC £2.77m plus £1m for the lease?

    What was wrong was not giving ACL the long lease in the first place. If they had done that then it may have opened up all sorts of possibilities, including for CCFC. But that has never been challenged by anyone, and it is well past going to court on that aspect.

    Even SISU's appraisal of ACL in court was that ACL was in a mess and all but worthless. The ACL situation had not improved by the time of the 2014 decision. Indeed Seppala is quoted as saying she would not interfere with the CCC sale, and never bid at that time. SISU can not have it all ways.

    It was set up wrongly in the first place imo but that set up I think means SISU will fail in their legal case

    This has been carefully choreographed to arrive at a particular outcome, with least amount of challenge
     
    Last edited: Jul 3, 2017
  32. Captain Dart

    Captain Dart Well-Known Member

    Joined:
    Oct 26, 2013
    Messages:
    8,573
    Likes Received:
    3,663
    Credit:
    £2,274.79
    I imagine JR3 will be about undervaluing the worth of the lease extension. :emoji_unamused:
     
  33. Grendel

    Grendel Well-Known Member

    Joined:
    Sep 19, 2011
    Messages:
    46,606
    Likes Received:
    14,467
    Credit:
    £1,830.32
    The shareholder value was £5 million based on associated loans.

    The confusion I suspect arises from the fact the loan was with the council. If it was the original Yorkshire Bank loan transferred to a separate provider you wouldn't think that I suspect.

    The original valuation was always low due to a short term lease and a loan that exceeded its value.
     
  34. SkyBlue79

    SkyBlue79 Member

    Joined:
    May 13, 2017
    Messages:
    78
    Likes Received:
    51
    Credit:
    £75.00
    Wasps and CCC would always argue that any increased valuation after the sale would be due to after sale investment and management, which is all subjective and therefore I would have thought be pretty useless.

    I wonder if they will ask if a professional valuation was carried out before the sale... I am assuming this did not happen, could a retrospective valuation be provided based upon the accounts at the time? Would this again be a waste of time given that they will be figures provided by CCC and include their view on future expectations.

    Had CCC increased the lease, increasing the debt to £15m, ACL would ultimately still remain as a loss making business with increasing debt (albeit a long term lease to borrow against) not providing an amenity to residents, so I wonder how much that would affect the company valuation? Could the council argue that they could only extend the lease once ACL was running as a secure company (I.e. post sale?)

    There are so much subjective ifs and buts to this argument I am not sure exactly where Sisu are directing their argument.

    Will be interesting to see what comes out on the 14th... Not long now
     
  35. Captain Dart

    Captain Dart Well-Known Member

    Joined:
    Oct 26, 2013
    Messages:
    8,573
    Likes Received:
    3,663
    Credit:
    £2,274.79
    It doesn't matter to them, as long as they can get to court..
     
    Astute likes this.

Share This Page