Form 8-K for BEBE STORES, INC.
Change in Directors or Principal Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously disclosed, Manny Mashouf has rejoined the management team of bebe stores, inc. (the "Company") as Chief Executive Officer, effective February 18, 2016 (the "Effective Date"). As of the Effective Date, in connection with his appointment, the Company has agreed to provide the following compensation to Mr. Mashouf: (i) a base salary of $850,000 (prorated for any partial year of service); (ii) eligibility to participate in the Company's bonus plan at 100% of salary level, subject to the terms of the Company's bonus plan, beginning in the Company's next fiscal year; and (iii) $8,000 per month toward the cost of housing in Los Angeles.
Sentiment: Strong Sell
More likely a short squeeze. Last time I checked, about 65+/- million shares (20% of float) were sold short. It has been oversold and was due to bounce back. However, I'm surprised at the big jump over the last few days.
Do you think the registration filing is effectively a move by Manny to put the company up for sale? You don't think he'll really sell his stock at such a low price do you? If he does, won't it be a long term positive for the stock since management will be free to run the company without interference and his meddling? Dennis Wilson is selling his 12% in Lululemon for $1.2B. Maybe he is looking for a new challenge? Dov Charney at American Apparel also is looking for something new to do. What better place than Bebe and all the hot chicks it attracts?
Most of the US North America natural gas production is hedged for 2014 and 2015, which is the siginificant piece. The Canadian natural gas production is really not hedged. Most of the other naturgal gas production is in SE Asia and most of this is linked to oil prices. Effectively, TLM has about 55% of its production in liquids or natural gas that is linked to oil. The other 45% of its production is North America dry gas -- Marcellus (~65%), Canada (~25%) and Eagleford (~10%). I don't see any big pop in cash flow if natural gas prices shoot up due to the hedges already in place that limit the upside at maybe $4.50 mmcf/d.
Didn't Carl sign a standstill agreement with the company last year as part of nominating two board of directors? I don't think he can increase his stake.
TLM already has already sold $200M non-core Canadian assets, which counts toward the $2 billion. It is apparent that TLM will sell its midstream assets in the Marcellus. My hunch is it might receive $800M+/-. TLM said on the conference call that it was expecting to announce 1 or 2 asset sale transactions in the 4th quarter.
Thanks for your feedback. I've been very unimpressed with Hal. He screwed around way too long trying to sell assets and deemed offers received too low. I wonder what kind of offers (if any) Hal can expect now? He's really put TLM in a real pickle. Spending big capex way above cash flow with little too show in the way of return. So much for "...living within our means."
You've been spot on regarding your view of the company, which is well documented on this board. Is there a price that gets you excited at all? Or is this a stock to completely avoid at all cost?
Appreciate your thoughts.
What did you think about the dividend cut? I thought it was pretty surprising since Bebe still has a big cash position and it reduced Manny's dividend from $4.6M to $2.76M per year. What was your take on the rumor through Bloomberg earlier this year about Bebe shopping itself around? There was a big spike in the stock to $7 before beginning a slow slide back down before it really tanked with Birkhold resigning. Very strange set of events....
As part of the sale of its 49% sales to Sinopec for $1.5B and offloading 50% of the abandonment liabilities (50% of $3B, undiscounted) in late 2012, TLM agreed to invest $1.9B from 2013 to 2016 to upgrade the existing North Sea UK facilities and expand on infill opportunities particularly its Montrose project (~$800M). It has probably has spent about 1/2 the $1.9B so far. Montrose is supposed to come on line in 2016. The free cash flow from the SE Asian operations is going to fund much of the UK work, which does not generate the necessary cash flow to fully fund the capex in the UK. After this big spend is completed, cash flow can be diverted to higher value projects with better returns, pay down debt and/or buy back stock.
Look closer at the SEC filings, Ichan's basis is closer to $12.50 per share. Ichan acquired most of his stake (all common stock, not preferred stock) mostly through deep in the money call options, but also purchased about 4M shares of the position directly buying stock. He has a standstill agreement with TLM, which allowed two of his appointees to the board. He can't raise his stake and agreed to support the nominees to the board back in May. I believe this standstill runs for about 1 year.
Interesting price action. There is a possible sale announced and then the stock does effectively nothing for weeks then all of a sudden there is a surge from $6 to $7 per share in a one week period. I've assumed there was a leak about a possible deal. When this doesn't materialize, then the stock gradually pulls back to $6 per share. Who said the stock market isn't rigged ??
I believe as part of the agreement to add two of Carl's people to the board, Icahn agreed not to purchase any additional stock. He's in the stock at about $12.50 per share if you look at the SEC filings.
One point of clarification that TLM's investor relations department has so far not confirmed despite my questions --- Is the $1.9 billion spend for the entire JV (i.e. TLM's share is only 51% of the $1.9 billion) or is TLM's share $1.9 billion? It wasn't very clear. I hope it is only 51% x $1.9 billion = $969M. If so, still a big commitment of cash to a very poorly operated part of TLM's business.
I believe TLM already hedged a big part of their natural gas output in 2014 / 2015 before the recent big run up so it won't get as much of the benefit as you think.
I don't disagree with your comments regarding Manny. Manny is one of the reasons Bebe has been struggling, especially over the last 5 years. This is why I was excited to see Steve take over. Manny is not involved and stepped aside to let Steve run the show and make changes. It is still early and it will take time to see improvements. There is a lot to fix. I attended the investor day in New York in Fall 2013 and was impressed with the new management team. This company will see sequential improvement over time, but it won't happen right away.
We are in the very early stages of a restructuring. The last time Bebe was able to show results from improving operations over several quarters, the stock increased to $9+ per share in early 2012. The same thing can happen again. This is why I find the timing of this news report very strange. Why now?? There is no pressure to sell. Bebe has $165M of cash on the balance sheet with no debt.
My hunch is somebody has approached Bebe with an offer, but before responding Bebe is gauging interest from other interested 3rd parties. What would be very surprising to see -- Manny doing a Michael Dell with Bebe. I wouldn't rule anything out at this point.
Where the stock price is right now, I think there is a better opportunity for Bebe to improve operations, which will drive the stock price higher than what it can get by selling itself right now. This assumes a buyer can even be found.
Just my thoughts.....
Reuters article posted late Friday indicates Bebe is exploring sale of company. I'm very surprised that it has decided to explore this option now in the midst of the new management team in the early stages of repositioning the company. Very curious timing. Why now?? This would help explain the recent SEC filing amending the senior officer employment agreements regarding change of control.
I read the article to mean GDF made an offer of $17 per share for the whole company, but when that was rebuffed by TLM, then offered to buy certain assets. Interesting that this is leaked out now. I wonder if this was done to get TLM back to the table to negotiate. Too bad Icahn has a standstill agreement with TLM right now.
I'll gladly sell my sharess at $17. It is either this or wait several years for the operations to improve. I don't think investors will be happy to hear TLM passed up this deal. There aren't too many buyers for oil & gas companies. This turn up the heat on TLM management. Do you suppose Icahn got wind of this, which prompted him to buy shares? It will be interesting to see how this plays out.