Shareholders who just three years ago invested their hard-earned cash into Hili Properties Plc are feeling shortchanged by the company’s recent announcement that it is offering a voluntary buyback of its listed shares.
Shareholders have until 25 March to accept the offer. They are complaining that the shares the company sold for €0.27c per share are now being asked to be sold back for €0.24c per share.
According to the latest published financial statements, the company has grown significantly during the past three years, so much so that the Net Asset Value (NAV) of the shares reached €0.324c per share until last June.
Hili Ventures is proposing an offer of some 30% less, insisting that it is paying more than the current market price quoted on the Malta Stock Exchange.
Angry shareholders described the offer as an “indecent proposal”. They criticised the regulatory authorities for not stopping this “obscenity,” while Price Waterhouse Coopers (PwC) justified this “rip-off.”
PwC, one of the so-called ‘Big Four’ auditing firms, said in a report accompanying the offer’s document: “It is true that the offer is below Hili Properties’ reported consolidated net asset value per share of €0.322 as of June 2024. ”
However, PwC underlined that “one must also consider the impact of the ongoing property portfolio management costs not considered in the reported fair value of the underlying properties.”
“The net asset value per share, after adjusting the capitalisation of property portfolio management costs, is lower than the offer price,” the firm concluded.
When Hili Properties offered the shares in 2022, the company told prospective buyers that it “anticipated” it would “distribute a 4% net dividend”.
What the same company said when it offered the same shares for sale in January 2022.
Rubbishing the offer and its justifications, shareholders insisted that the shares are currently valued at €0.322, and Hili wants them back at a discount.
They also lamented that Hili may force those disagreeing to sell their shares.
According to the Offer Document, if the company acquires 90% or more of the shares through this offer, Hili can force the remaining shareholders to sell “at a fair price.”
Veteran expert blasts offer
While local stockbrokers, who usually make a significant effort to sell shares for a commission, fell silent on the Hili Ventures’ offer, a veteran stockbroker and financial expert blasted the proposal.
Referring to a ‘financial analysis’ published by The Times of Malta, stockbroker Paul Bonello said the “article” does not mention that the public share issue for €0.27c was made only in January 2022.
“Nor does it mention that the net asset value per share as per last published 30 June, 2024 interim accounts is €0.322,” he said, saying the article was more a public relations exercise.
Harshly criticising PwC for their ‘analysis,’ Bonello said that while acknowledging this Net Asset Value, the audit expert auditors make a series of convoluted arguments to conclude that “nothing has come to our attention that the offer is not fair and reasonable.”
“You see how good the Maltese businessman is at making a quick buck and buying back shares it issued ‘yesterday’, now at a 30% discount on book value, equivalent to more than €11 million,” Bonello argued.
Contacted to explain how they had arrived at their offer and to justify the fact that they are offering a lower price for the same shares they sold just three years ago, a spokesperson for Hili said:
“Hili Ventures’ Voluntary Offer of €0.240c exceeds the current market value of €0.193c per share, representing a 24.4% premium based on the last traded price of Hili Properties plc on the Malta Stock Exchange. This voluntary offer also exceeds the volume-weighted average price (VWAP) over the past six months of €0.219c, reflecting Hili Ventures’ commitment to extending fair value despite the stock’s market performance.”
Hili Properties Plc owns and manages strategic commercial real estate for lease across Europe, including Estonia, Latvia, Lithuania, Malta, and Romania. The portfolio features office buildings and spaces, grocery-anchored shopping centres, healthcare facilities, and McDonald’s restaurant properties in key commercial districts.
Get LOST HILI PROPERTIES.
THE AUTHORITIES SHOULD INTERFERE IN THIS HADMA
We Shareholders should UNITE to fight and GET back what is OURS.
So first they needed our money to expand but now that they are doing well they do not want us to share in the profits. They simply used us. This is a warning not to buy shares in Maltese companies. MSE please note!
Avoid anything Maltese… A corrupt country with the police doing everything to help criminals
Yup – i have reached that conclusion long ago.
Those shareholders who bought the shares in the primary issue at 27c are losing money. Since the issue HILI PROPERTIES issued two dividends. These 2 dividends paid shareholders in total .02 c per share net. Now that Hili Ventures is paying 24c for every share purchased at 27c these shareholders are losing 1c per share. And not only the small shareholders have also lost the notional interest if these funds invested in Hili Properties were invested in one of the Hili bonds for example. This looks like daylight robbery.
They should say thank you for financing their future profits.
They used your money, kept the profits and are now paying you pay in discounted euros which are worth a lot less thanks to inflation.
And the investor took all the risks, while they take the profit.
Once can say, anyone stupid enough to invest and accept what is on offered locally deserve this behaviour – they are treating investors like fools.
Let them go raise money like other companies do and pay 15% to 20%, that is what these risks are worth to banks that specialize in these kind of corporate loans.
They have made far more than what their books show in profits, the dividend is in itself a sick joke. But they pay PWC their fat fees for their help in cheating investors and there is no law or regulator who will do diddly shit for investors .. again what they deserve for being stupid.
Dividend payments have nothing to do with share price in terms of establishing a value. Dividend is the risk reward the share price is based on the value of the company. Quite different.
Part of the mafia state?
Joseph Muscat was caught entering Hili’s private residence from the backdoor. There are pictures taken from Daphne’s portal.
TERRIFIC DEAL
DOWNRIGHT DISHONEST
This is just another nail in the coffin for the reputation of the MSE in the context of equities, while it still maintains a strong demand for fixed income.
The MSE is not different from shaky markets like Russia, any Latin America countries, and other banana republics.
Even the communist Hong Kong market is more reputable.
If they don’t want to lose their reputation in the market, Hili Properties still has the chance to review their position and increase the price. We remind you that Hili has about 5 bonds in the market and if they don’t review the price they might have consequences when it comes to roll-over or new issues of bonds.
Crookshop. The whole group is a pump and dump scheme. No wonder all their top people leave after a year.
“one must also consider the impact of the ongoing property portfolio management costs not considered in the reported fair value of the underlying properties.” ??? Were there no such costs when HP said that the share price was 0.29c and HP offered their shares to the public at a discount of 2c at 0.27c? The least HP can do to call their buy offer fair is to consider offering every shareholder what every shareholder paid to buy the shares. That is, if a shareholder purchased the shares for say 0.19c he gets 0.19c but if a shareholder purchased the shares at 0.27c give him 0.27c. The present offer favours those who purchased the shares below 0.24c and punishes loyal shareholders who purchased shares at 0.27c.
Why are people insisting on investing in local companies? There is no liquidity in volume. Terrible idea, especially in an age where you can invest your money into any major institution from your phone
Just don’t sell!!!
They do not care about their reputation. They are far too big and RICH for that. They even have PRICEWATERHOUSE COOPERS in their back pocket. This is the way BIG MONEY and POWER works…….they use you, abuse you and DEMOLISH YOU. Entirely YOUR FAULT in assisting their greed, depravity and INIQUITY.