You are currently browsing the daily archive for September 30, 2008.

MAN Group (EMG, 316p) directors have announced the purchase of warrants in MAN, spending GBP 930,000 to give them exposure to 1.64m shares in MAN Group plc.

The warrants cost 57.59p each, and give them a return of the average share price over three years less the strike price (undisclosed). For details of directors transactions see the MAN Group plc website.

Peter Clarke CEO bought 1.12m warrants. He also owns 4.6m shares having picked up a few more last week just short of four pounds.

Kevin Hayes CFO bought 260,000 warrants, as did Christof Moller, who sold 45812 shares to pay for them.

John Aisbitt, non executive Chairman, bought 100,000 shares at 340p taking his holding to 1.6m shares.

Are these moves significant?

I see the warrants as a way to reduce risk to the downside (you only lose 57.59p if the company goes bust, not 300p+), and would prefer to see outright share purchases as a stronger signal of a directors commitment to the group.

Having said that I think these purchases say more about the directors using their experience to see a buying opportunity where others see collapsing markets.

So these purchases count a WEAK Signal.

MAN Group results (link to Dow Jones comment here  ) were announced yesterday, revealing a 40% drop in performance fees in the first half, but a reassuring statement on regulatory capital.

Serica Energy (SQZ, 58p) announced yesterday September 29th that six directors had bought shares in the company on September 26th at prices between 49p and 53p. They also announced that they had the same day (September 26th) received a written share offer from Salamander valuing the shares at 70p. Link to both announcements here.

I’ve a few questions of Serica management:

1. Did you buy shares on the 26th September before or after you had received the wriiten offer from Salamander (valuing the share offer for Serica at 70p using the September 26th closing prices of Salamander and Serica)?

2. Had you received a verbal offer from Salamander prior to the written offer? And was that before or after you bought shares for yourselves?

3. Were you in discussions which may or may not have led to an offer for the company at the time you bought shares on August 15th (see my post of  August 16th ‘Serica – Three directors invest GBP 440k’) ?

My view of August 16th was

‘I consider Fridays purchases to be more significant as three directors are buying, investing significant amounts, and increasing their positions by an average of 20%. Signal strength: STRONG’.

With now 6 directors of a board of 8 buying shares, and an offer on the table, my view remains positive based on the value of directors share dealings in Serica Energy.

Signal Strength remains STRONG.

Disclosure: I have a position in Serica Energy.

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September 2008