MSY Now Owned by a Graphite Mining Explorer

chumlee on 05/07/2019 - 19:09

5 July 2019
ASX Announcement
Agreement to Acquire Retail E-Commerce Growth Story

The Board of Lanka Graphite Ltd (ASX:LGR) (“Company”) refers to its ASX
announcement dated 3 August 2018 regarding execution of a binding conditional term sheet to acquire 100% of the MSY group of companies (collectively referred to as “MSY”), which retail consumer electronics throughout Australia. MSY sells computers, computer parts and software online and across 28 retail sites nationally and generates
revenues of approximately $100 million per year.

Computing

Related Stores

MSY Technology
MSY Technology

Comments

              • cloudy on 08/07/2019 - 20:06

                @DogGunn: I suspect the reason they started the minimum is because their prior experience overseas didn’t have people like ozbargain who gets a kick getting something that’s worth $2 delivered to their door. Especially when most people would just pick it up on the way home.

                The packaging and costs involved can’t be covered, by such low value, so hope they can make their money else where

      • Halo375 on 07/07/2019 - 12:27

        They also have a lot more branches now so their foot traffic is spread out. With the rise of mobile devices, its likely less casual users are building PCs too so that would account for a drop in volume.

    • Helldog on 05/07/2019 - 22:17
      +23

      I'd also suggest that people are holding on to devices for longer*. For most people, any decent computer built post-2011 is probably still able to run everything they need (email, web browsing, home office) quite well. I can remember in the mid-2000s when the newest processor actually meant real world time savings. Now, not so much. Same thing is starting to happen in the smart phone market with flagship fatigue.

      (* Hardcore gamers being the exception of course.)

      • p1 ama on 05/07/2019 - 23:57
        +2

        I would even say before 2011. I recently revived an old i7 920 system from 2008 that I found when cleaning out my garage, put an SSD in there and it still flies for everything most people would want their PC to do.

        Maybe it's a function of me just getting older, but I just don't think there's all that much hype for "stuff" anymore. The i7 920 was the first enthusiast launch that I really participated in (even though I've been playing with PC's since the original Pentium 66 MHz). It was genuinely hype. People lined up outside computer stores, there were BBQs and launch parties and I was genuinely excited to be getting one.

        In hindsight, it wasn't that much faster than my Q9560 at the time, but heck, it felt like it was the future. Now it's just meh - 3rd gen Ryzen coming out in a few days, sure I'll buy it, am I excited? Not really.

        • EightImmortals on 06/07/2019 - 08:55

          hijack So has AMD taken the lead again? Last time I used AMD CPU's was the Athlon. :)

        • Dr Techno on 07/07/2019 - 16:09
          +1

          I'm still rocking my original i7 920 from 2009.. I've just upgraded the gfx card since last one just died.. currently dont have a reason to upgrade unless I want to have a mobo that supports sata 3. Im amazed it's lasted this long.. normally I would have had upgrade cycles of 5 years.

      • ngengerous on 14/07/2019 - 16:12

        Very true. I'm still using my 2012 i7-3770K with no issues so far - I can't think of many other pieces of technology I'm still using 7 years later.

  • Fuzor on 05/07/2019 - 21:49

    Holy shit…This is so similiar to Bunnings trying to acquire that mining company a month back. Something about consolidation and cost synergies with mining and officeworks lol.

    • richox on 06/07/2019 - 10:23
      +7

      It wasn't bunnings, it was wesfarmers. Wesfarmers own bunnings (and used to own coles). They are also one of the largest chemical companies in Australia, with brands such as Kleenheat, CSBP, ARG, etc in their stable. Until last year they also used to own and operate coal mines.

      So yeh, actually make excellent sense to acquire Lynas.

      • brad1-8tsi on 08/07/2019 - 15:21

        Agree.
        I think they might be seeing a big future in rare earths (????battery manufacture / sales???).

        I don't think the deal is dead in the water yet but WES is sticking to their $2.25 offer despite the share price rise of LYS into the $2.50+ region.

    • [Deactivated] on 17/07/2019 - 15:17
      +2

      It’s actually a reverse takeover. MSY is acquiring Lanka’s ASX listing by having Lanka acquire MSY then rename itself MSY and replace the entire board with MSY’s board. It’s a common strategy for a company that wants to list without meeting listing rules by being acquired by a worthless company using its own money.

  • relentless on 05/07/2019 - 22:06
    +2

    That might explain why the Cannington store just started to close at 5:30 pm instead of 6:00 pm. Also no more Saturday trading.

    • cheesecactus on 07/07/2019 - 20:25
      +1

      Really? No more saturday? Good to know, almost drove out there yesterday. Would have been a rude surprise. Balcatta still operating normally?

      • relentless on 07/07/2019 - 20:38
        +1

        Google shows:

        A user suggested these hours
        Mon-Fri 9:30am–1pm and 1:30–5:30pm
        Sat-Sun Closed

        These hours are showing on their website:

        Hours:
        Monday:9:30AM-5:30PM
        Tuesday:9:30AM-5:30PM
        Wednesday:9:30AM-5:30PM
        Thursday:9:30AM-5:30PM
        Friday:9:30AM-5:30PM
        Saturday:Closed
        Sunday:Closed

        Balcatta shows they're still open Saturday, perhaps due to less competition close by.

        Hours:
        Monday:9:30AM-5:30PM
        Tuesday:9:30AM-5:30PM
        Wednesday:9:30AM-5:30PM
        Thursday:9:30AM-5:30PM
        Friday:9:30AM-5:30PM
        Saturday:10:00AM-1:30PM
        Sunday:Closed

        • cheesecactus on 07/07/2019 - 22:35
          +1

          Interesting. I wonder if theyll slowly start phasing out the cannington store…

  • argonbay on 06/07/2019 - 07:58
    +3

    LANKA GRAPHITE LIMITED - previously known as
    VICULUS LIMITED
    GLOBAL BUSINESS SOLUTIONS LIMITED
    NATIONAL DATABANK LIMITED

  • Ocker on 06/07/2019 - 08:43
    +3

    Lanka is basically broke - $5k in the bank and their last annual report was heavily qualified by the auditors as to the ongoing viability of the company.

    The purchase of MSY is to be fully paid for by the issue of new shares in LGR which are to be funded by a cap. raising at $0.05c per share, The shares of LGR were suspended in August last year and last traded at 2.1c.

    The Directors of LGR have no experience in retail and or/electronics so it is a very odd deal, to say the least

    • cloudy on 06/07/2019 - 21:05
      +7

      not really, this is basically the typical back door listing.

      Shell company with no value, is sold to MSY owners,and now MSY onwers own most of it as you said.

    • Dr Techno on 07/07/2019 - 16:11
      +4

      when u mention LGR - I keep on getting a voice in head that says Lazy Game Reviews :)

      • stemcell on 17/07/2019 - 14:04

        Greetings 🙂

  • richox on 06/07/2019 - 10:21
    +10

    most likely this is the situation
    https://www.google.com/search?q=reverse+takeover
    don't be shocked to see LRG undergo a namechange in the next 3 months

    • roddo on 07/07/2019 - 13:58

      wow - learn something new every day

  • Olokun on 06/07/2019 - 13:14
    +1

    Their Annual Report is an interesting read.

  • websterp on 06/07/2019 - 14:09
    +3

    This is definitely going to be a reverse take over. MSY is turning themselves into a publicly listed company in a roundabout way.

    Anyone interested in buying MSY shares?

  • piece on 07/07/2019 - 14:49

    Yup, back door listing. Interesting economic climate for this to take place though.

  • mrhugo on 07/07/2019 - 17:07
    +1

    What is a back door listing?

    These days my parts come from eBay or Amazon, who uses computer stores anymore. I can get parts cheaper delivered without wasting my Saturday going to MSY.

    Maybe 10 years ago I was MSY best customer, funny how times change.

    • [Deactivated] on 07/07/2019 - 17:13
      +2

      Yea got my shit from amazon recently. The postage wait wasnt great though.

      AusPost just card you so you have to bloody wait at the post office which is worse than msy "queues"

      • cloudy on 10/07/2019 - 22:20

        That's assuming Auspost even get your address right. I'm lucky my neighbour knows me and brought me the parcel that was left on her door with my name and address on it.

        AP are so bad I loath online shopping lately.

    • happydude on 07/07/2019 - 19:09
      +42

      Very simplisticly there are two ways to get on the ASX.

      An IPO - that would be MSY offering shares and then listing on the exchange. Often this is expensive and has a number of requirements that need to be met.

      A back door listing goes a little different. A company listed on the ASX that is total garbage suggests to a company that they let them buy them. So garbage company buys the good company. Obviously garbage companies have no money so to pay for it the garbage company issues more shares.

      So you will buy shares in the garbage company so they can buy the good company. In effect you will then own the good company.

      The garbage company will generally then change it's name to the good company's after the deal is done.

      Usually the management of the good company will replace the garbage company's management. Hence the name "reverse take over" as the company takes over their owner.

      Why do this if you are the good company? You get around the cost and hassle of meeting listing rules and going through the expensive IOP route. There is a lot less red tape and it can usually be done quicker.

      Why do this if you are the garbage company? The garbage company will generally have owners that have lost all of their investment. The new shares that are issued means there ownership is diluted which leaves them with a tiny share of the good company. A tiny amount of good company is better than a big share of garbage company.

      • mrhugo on 07/07/2019 - 20:53
        +3

        Thanks for the great practical explanation, very interesting.

        hmmmm…why would a small computer shop want to be on the ASX, seems to me that this is the beginning of the end for MSY.

        • greatlamp on 08/07/2019 - 07:29
          +4

          It's a good way to sell your company

          If they wanted to sell the business privately, there aren't many people interested in purchasing a 20 million dollar retail business.

          This way the get a better price

      • cheesecactus on 07/07/2019 - 22:34
        +1

        Excellent write-up, thanks!

      • MiniMoo on 08/07/2019 - 02:03

        Great explanation. You've made me a happydude. (groan)

        Was wondering why their prices haven't been as good as before. They have also been doing over the past few years big exhibitions/gaming tournaments and PC build shows (see their Facebook posts) that look like they are spending a lot on. They may be looking to reposition themselves away from the budget PC parts store, perhaps more like a JB Hi-Fi(?). Hopefully they won't be the Harvey Norman of PC stores.

      • tessel on 08/07/2019 - 07:37
        +2

        Then will they do a dicksmith? Sales, banners amazing deals! Turn over through the roof, share prices sky rocket…. then bust it's all over?

      • richox on 08/07/2019 - 11:55
        +1

        I thought the ASX/ASIC really frowned on this when businesses are crossing industry sectors? This is mining/exploration across to retail.
        EDIT: I did some reading, turns out they don't care about sector as long as all listing requirements are met.

  • Kamsi on 07/07/2019 - 18:22

    So MSY is sold! not wonder there price is not that great as it was before.

    • CalmLemons on 07/07/2019 - 23:33
      +2

      Read the comment above. MSY are just going IPO, without the expenses of an ASX listing. Most likely same owners.

  • kaleidoscope on 07/07/2019 - 18:28
    +4

    This store is currently BANNED from store representative posts.
    Reason: Sockpuppeting (Rep only) Expiry: permanent

    🤔

  • trevor99 on 07/07/2019 - 19:23
    +1

    MSY was the original low margin seller, gutted competition and forced efficiencies from others.

    Anyway job done now in case they start price jacking it'll be no worries.

    • relentless on 07/07/2019 - 20:39

      Ah the old back the market into the corner technique.

    • Dr Techno on 08/07/2019 - 18:54

      may not matter if they price jack coz out of stock.. NEXT!

  • GoGoGadget13 on 07/07/2019 - 22:43
    +1

    This is quite interesting. I've been having problems with them for some months now and when I'm free will probably go to the Tribunal to settle things as per the advice of Fair Trading NSW. For anyone wondering, its in regards to their horrible repair service.

    • CalmLemons on 07/07/2019 - 23:31

      Google, 'computer repair' and fix it yourself? Youtube has many tutorials. Sorry, snarking. Next time shop at harvey norman or JB, will hopefully keep MSY parts price list low…..

  • CalmLemons on 07/07/2019 - 23:29
    +6

    SIGH

    Unfortunately, here we have the needs of the 80% novice consumers basically ruining it for the 20% of well informed non-noobs.

    I've shopped at MSY for over 15 years now. It's where you go to buy computer components to build your own computer. It's not where you go to ask what ram is, is it compatible and can I bring it back if it doesn't 'fit'.

    Consumers make products more expensive.

    MSY are effectively the only reason that prevents other PC stores from charging whatever they want. Other stores charge 10-15% MORE but consumers will be the price for the better service.

    You don't go to MSY and expect it to be like harvey norman. You don't go to MSY and expect them to absorb your own intellectual incompetence on not googleing or youtubing how to install or which part you need.

    The MSY owner is a good business person, old school and very savvy.

    Businesses raise money for growth.

    • ntt on 08/07/2019 - 16:23

      but please don't forget that computer parts are good to run for a decade nowadays, hence no needs for upgrade oftenly like in the past, unless you are hardware enthusiast.

      • Roman Sandstorm on 09/07/2019 - 10:19
        +1

        @ntt

        Props for invention of new adverb: oftenly.

        • ntt on 09/07/2019 - 11:13

          thanks grammar Nazi, but I couldn't edit it.

  • star-ggg on 08/07/2019 - 10:05
    +3

    I'm going to buy a share so I can join the VIP queue instead of waiting with the plebs

    • [Deactivated] on 10/07/2019 - 22:45

      It's the same bloody queue when you order online and pickup

  • number5 on 08/07/2019 - 14:55

    That's the typical borrowing-a-shell-to-get-listed or backdoor listing scenario, hopefully MSY will raise enough money to make it better.

  • itbargainhunter on 08/07/2019 - 15:45

    All proud MSY consumers, ain't it great to participate indirectly in one of the most interesting finance takeover seen in IT channel in years?…

    According to ASX announcement on 5-Jul, Lanka (LGR) "BUY" MSY with 396 Millions new shares, value at 5c each with total value of 18.9M.
    Worth noting market value of LGR is only 2.1c before the suspension of trade this morning.

    Also based on Lanka Annual Report June 2018, Lanka only issued 108 Millions shares before the takeover .

    After this transaction, MSY will be the biggest share holder of Lanka.

    So what is next? As stated in the same 5-Jul ASX announcement, LGR is planning to raise 3.5 - 4.5M capital in the market.

    https://www.asx.com.au/asx/statistics/announcements.do?by=as…

    • [Deactivated] on 11/07/2019 - 10:44

      Any idea when the suspension is going to end?

  • Viospeed on 09/07/2019 - 15:22
    +1

    Wow they do $100 million in revenue!

    • Dr Techno on 09/07/2019 - 16:48
      -1

      hmmm surprising but they have many stores around Oz. I guess they would be making a very lean profit margin on each item I wonder what their sale volumes are in the millions ?

      • [Deactivated] on 11/07/2019 - 19:24

        What do you think revenue is Warren Buffet?

  • Snacky on 18/07/2019 - 20:37

    They got a NEW website!!!! guys jump!!!

    • Dr Techno on 19/07/2019 - 14:23

      OMG Tell me its noooooot true!!!!!! HTTP 404 error on PDF parts list.. who cares about the website :P

  • Jaduqimon on 19/07/2019 - 16:45

    new website… i had to do a double take on the URL… i thought i landed on another domain….

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