6PM: ‘Substantial shareholder’ receives interest for sale of shares

A meeting of the board of directors of listed software company 6PM was convened Monday 29 March, after one of its main shareholders said it had received interest for the acquisition of its shares.

“The board was informed by shareholders holding a substantial shareholding that interest has been shown in the acquisition of their shares. Subject to the satisfactory conclusion of a due diligence exercise, it is the intention of the interested parties to launch a voluntary bid for the acquisition of the issued share capital of the company,” 6PM said in a company statement.

6PM will convene an EGM for shareholders to consider whether to furnish in confidence unpublished price-sensitive information to enable the offerors to consider their offer.

6PM plc recently acquired its remaining shareholding in the electronic and mobile care provider, emCare360 Limited from CareMalta Group Limited. EmCare360 provides electronic and mobile care to individuals offering independence and peace of mind and to organisations offering accountability, efficiency and visibility through its solutions.

EmCare360 manages an Electronic Medical Record (EMR) service which includes running Telecare Service in Malta in collaboration with GO plc since April 2013, servicing just under 10,000 households. EmCare360 has also introduced a Vital Signs Monitoring service and this is being implemented and adopted by care providers in Malta, Italy and the UK.

RS2 share price growth, then panic sale

Shares in RS2 company suffered a substantial loss of 13.6% in just a few days of trading after reaching an all-time high of €4.05 in mid-March.

The fast growing Maltese company runs a payment services product that can process up to 40 million transaction per hour, and Barclays Bank is one of the major shareholders of the company owning a stake of 18%.

On 10 March, RS2 Software shares peaked at a record high of €4.05. By closing on 17 March, the share price fell to €3.50, a loss of 13.6% in just one week.

University lecturer and asset manager Steve Ellul has blogged that in mid-March, RS2 shares that were worth an average €1.5 million by mid-March were “sold off in panic mode at an average value of €1.3 million” with shareholders losing almost €200,000 in aggregate in less than in 7 days.

RS2 price has had a long rally of strong price growth since the company issued shares at just 33c back in 2008.

Ellul said investors had got used to the stead price growth and were expecting to sell shares hoping that the price will reach a specific value in the future, “usually the next round number... This is often the case when investors know very little about the company but take comfort from the consistent positive trend in the share price.”

“I believe that many investors in RS2 Software could have placed a mental target to sell the shares once the price reached the next round number which happened to be €4.00. Indeed, that price was actually achieved and surpassed in the beginning of March when sellers started to get into the market,” Ellul said.

“The problem is that for you to sell at €4.00, someone will need to be ready to buy at that same price. If everyone anchors his price target to €4.00, no one would be ready to buy at that price because there is no profit to be made.”

In fact only a few number of shares were sold at first at a price of €3.95. Ellul believes that investors panicked at seeing the price fall below €4. “This is why many investors started to rush into the market and decided to sell at the best price available. The modest demand coupled with the sudden high supply naturally had a toll on the price of these shares and as explained before the price dropped to a level of €3.28.”