BikeBiz Bicycle and cycling retail news
[Uploaded to BikeBiz.co.uk on 26th September]
GARY MATTHEWS SAYS:
I have read your articles from the website. If you would like, a few
corrections (at least as I see them):
1. The Sturmey sale was handled by Derby Cycle Corp. which is the US based
corporate center. Derby USA is the US operating company…they were as
uninvolved in the sale as Raleigh UK (the UK operating company).
2. There was no US trip made by Lenark executives to discuss or ink this
deal. [Ed. I stand corrected. When Gary Matthews told the Lenark directors had visited him I took that to mean they had flown out to the States when in fact they visited Matthews on one of his trips to the UK.]
3. I was at every negotiating session—the Lenark team only wore business
suits. They never appeared in casual attire. Never wore gold chains or
floral shirts.
4. The quote from the Mail that due diligence took 6 months is incorrect.
The sale of Sturmey with the various bidders took six months.
5. Alot seems to be made on the GBP 30 price, without recognition of the
cost to move the facility and other working capital expenses.
6. On our discussion that you noted, the DCC sale to Thayer had an
enterprise value of approx. $300m, however, the question you asked me was
did Thayer put in $300m? The equity put into this deal was approx. $100m.
You then characterize the bank debt as junk bonds, which is untrue. The
bank debt from the banking syndicate is a typical revolving loan, secured by
our assets. DCC did issue bonds in both the US and German markets which are
selling at a deep discount today. The combination of the two types of debt
basically round out our capitalization. All of this information is publicly
available.
Otherwise, it seems like a fair recounting of the situation, with much to
unfold in the coming weeks. And, while we have great empathy for the
Sturmey Archer employees, and hope that a buyer can be found to keep the
business alive, all the pensions for the employees will be administered via
our program. The Lenark insolvency will not affect one penny of their
pensions.
