2CC - 2 Cheap Cars Group

[Left Field]

Beagles are not fussy eaters and are happy to eat the crumbs that fall off the table and hang around hoping a bone falls off the table too.

Crikey.... you might have to eat crumbs...... or work harder for that bone.

https://api.nzx.com/public/announcement/476757/attachment/473213/476757-473213.pdf

The key reasons why the Independent Directors recommend that you accept the Offer are:
• the Offer price of $0.80 per Share is within the Independent Adviser's valuation range of $0.71 to
$0.90;
• the Offer price represents a 21% premium to the pre-announcement trading price of 2CC's Shares
($0.66 per Share), and a 39% premium to the volume weighted average price on the NZX Main
Board (VWAP) of $0.577 per Share for the 12 months ended 9 July 2026;
• 2CC is substantively under the control of Sena & Co;
• trading in 2CC's Shares is illiquid and the Offer presents a certain opportunity to sell; and
• no competing proposal has emerged.

[Basil]

or work harder for that bone.

I'm in a no lose situation but a $3,000 profit is something I consider to be crumbs and I'm really after a 5 figure sized bone.
The whole valuation is based upon Mr Sena's ridiculously low forecast for FY27.  A base scenario of a similar profit for FY27 as for FY26  lacks any credibility whatsoever when you have a whole years trading from their new flagship store, a whole years trading with a much more favorable carbon cost scheme and they've already made circa $1.2m in the first two months trading.  Such a claim is laughable.   Likewise the mid point profit scenario seems extremely conservative at $4m.  I see that as a VERY conservative base case.  Also the multiple the "independent" valuer has used is right at the very bottom of comparable transactions.  He admits that's subjective. In summary, the forecast supplied by the offeror is unreasonably low as is the multiple the valuer has used.

Happy to put in a bit of work to see if I can get a bone.   Will try and have a chat with ACC as soon as Percy has formally confirmed his position.  If he rolls over like an old overfed Labrador dog and plays dead then there's no point fighting this.

[Red Baron]

Happy to put in a bit of work to see if I can get a bone.   Will try and have a chat with ACC tomorrow.

I am vairly sure zhat our 'David Sena' is ze brother of retired zuperstar wrestler John Sena.  No doubt John has given hees bro a vew tips on how to 'wrestle shares away from recalcitrant holders."

Be careful Basil!   Instead of 'giving ACC a ring', you may find you and ACC both have to 'clamber into the ring' to vace your voe.    At least vith ACC on your zide, you zhould be covered eef you are "body slammed" out of ze match!

RB

[Basil]

I've communicated with ACC by email this evening and linked Lorriana into that so those two significant minority shareholders can start communicating.  If there's a better deal to be done they will have to drive it themselves but I am happy to play a support role. 

[Otago K]

I'm in a no lose situation but a $3,000 profit is something I consider to be crumbs and I'm really after a 5 figure sized bone.
The whole valuation is based upon Mr Sena's ridiculously low forecast for FY27.  A base scenario of a similar profit for FY27 as for FY26  lacks any credibility whatsoever when you have a whole years trading from their new flagship store, a whole years trading with a much more favorable carbon cost scheme and they've already made circa $1.2m in the first two months trading.  Such a claim is laughable.  Likewise the mid point profit scenario seems extremely conservative at $4m.  I see that as a VERY conservative base case.  Also the multiple the "independent" valuer has used is right at the very bottom of comparable transactions.  He admits that's subjective. In summary, the forecast supplied by the offeror is unreasonably low as is the multiple the valuer has used.

Happy to put in a bit of work to see if I can get a bone.  Will try and have a chat with ACC as soon as Percy has formally confirmed his position.  If he rolls over like an old overfed Labrador dog and plays dead then there's no point fighting this.

I agree with what you have to say here, not sure if my 23000 shares will amount to much, I'm in two minds to mop up a few more on market even at today's SP, perhaps at the least I must sit it out, not sure if it's psychological bias but my thoughts of $1.15 seems to keep coming back into my assessments on the back of envelopes whatever way I look at it.
Not overly impressed with the director's recommendation, or some of what they pass off as logical for minority shareholder's perceived benefit, percy / lorraina have always seen merit in the rate of return that goes beyond any impediment of liquidity. Hope anyone wanting to just accept the 80c levels have sold on market recently to resistant buyers like yourself. THL directors didn't support the Touchert offering, as I say I don't think much of 2CC independent director's recommendation, hope we get to see a H1FY27 reporting.
Valuations are subjective but the methodology ( technique and rates applied,) need to be appropriate to the circumstances, shouldn't need to be a forced sale for minority shareholders at unrealistic forward earnings assessments.

[Basil]

Very good to see someone stepping up to the plate this morning and buying nearly 100,000 shares at 80 cents and making a clear statement that 80 cents is not enough.  (It wasn't me)

[Red Baron]

Very good to see someone stepping up to the plate this morning and buying nearly 100,000 shares at 80 cents and making a clear statement that 80 cents is not enough.  (It wasn't me)

Come on Basil, ze optimist, you know how zhese theengs play out.    At 81c you vould have had a point.   But at 80c, and vith the offer virmly on ze table, I can guess ze acquirer's name.  Zurname beginning vith a 'Z'.   Eenitial 'D'.

Vatch out vor zhat 'Substantial Security Holder Notice', een ze next vew days.....

RB



 

[Basil]

Looks like a few weak hands have thrown in the towel already...quite possibly the independent directors among them who have already publicly stated their position.  https://api.nzx.com/public/announcement/476947/attachment/473422/476947-473422.pdf  I'm struggling to remember ever reading a lower quality "independent report"  Looks like the vast majority of it was prepared by A.I.

[Plata]

When did anyone get anything of real value from a consultant. This time we got a real treat, consultants relying on forecasting from the aquiring party in their valuation

[Basil]

The Northington Target Company report early 2025 for MCK was a very high quality document.  The difference in quality from that to what Simmons served us up is as different as chalk and cheese.

[Stockgathering]

When 2 Cheap Cars (now operating as 2 Cheap Cars Group Limited) listed on the NZX in February 2021, the company completed a direct listing rather than an initial public offering. Because no fresh capital was being raised or shares being sold by the company, no financial adviser was required to set or underwrite a public share price for the listing.For its NZX Direct Listing Profile, the company's reference share price was registered at $1.30 per share based on internal evaluations and the directors' existing valuation of the business.The corporate and financial advisers who worked on the 2021 listing included:Legal Adviser: MinterEllisonRuddWattsIndependent Valuer/Adviser: Simmons Corporate Finance.

Interesting to look back how the $1.30 listing price was decided. The company is doing well so what is the reason that Northington Target Company report comes to such a varied valuation. And very disappointing of the independent directors Michael Stiassny and Gordon Shaw to so easily accept such a low valuation.

[Basil]

Simmons has done the latest valuation for 2CC. The NZX should not be a used car lot where they listed at $X and then say to trade in your shares we will give you only 61% residual value.

I have a huge amount on my plate but hope to have a professionally written rebuttal put together by early next week.