TWOC - Trans World

[JanSvenda]

Another low-ball theft in the OTC world. Someone might be interested in buying shares and pursue appraisal. While not as crazy as WXMN, it still is obvious.

 

Some Hong Kong Co. is buying the company (hotels and casinos in Central Europe) for a max consideration of $42 million (the co. expects to pay around $35 mil actually) which is a joke compared to $51.5 million tangible book. They have also been able to earn EBITDA of $5.8 million in the past nine months.

 

This is slightly contracted due to new gambling regulations which might not lower the profitability of the operations forever. Therefore they might be able to reach the 2016 EBITDA of $11.45 million in 2018/9. Their BS is also relatively liquid as they have $8 million in cash and only $12 million in debt.

 

In any case, this is a company that is able to earn FCF in the long-run. The current market cap is $34 million.

 

The merger doc is here -

http://www.hkexnews.hk/listedco/listconews/sehk/2018/0305/LTN20180305007.pdf

 

The entity is in Nevada and thus it might be harder to pursue appraisal - https://www.appraisalrightslitigation.com/2015/09/28/mining-for-gold-in-the-silver-state-nevada-appraisal-rights/

 

The reason for the acquisition is likely tied to the insiders who were in the company for a prolonged period of time and probably wanted out.

 

I want to single out Wynnefield fund, run by Nelson Obus. He did the same with Breeze-Eastern (BZC). Appraisers, there were able to win a significant amount due to a technical 'takeunder'. If you stumble upon a company with him being an insider bear these stories in mind.

 

Lloyd Miller III. funds are also involved. It seems that Mr. Miller has recently passed away as per this 13D - https://www.sec.gov/Archives/edgar/data/914577/000114420418003435/tv483913_sc13d.htm. This could actually have implications for several other OTC stocks as he was a frequent investor in the space.

 

I also wrote this up in order to track the situation and perhaps learn something new.

[Gamecock-YT]

It's been a good while since I last looked at this, but as I recall it was majority owned by 2-3 people. Are you saying the related parties are attempting a take under? Otherwise it seems like they would be acting against their own self-interest in selling for what you call a low price. Maybe I'm missing something...

 

Also sad to hear about Mr. Miller. Always enjoyed tracking his purchases on the sec website.

[JanSvenda]

Yes, it is owned by Miller, Obus and some other fund, yet they are selling out at a low price to a third party. Obus and the other fund (Value Partners Ltd.) have been in the stock for over 12 years and thus have the incentive to get out. If you look at what happened with BZC it was the same case. Obus approved an acquisition to a third-party at a low-balled price. They were even pushed to sell higher just because the share price has shot up (it was unrelated to the acquisition developments).