approval should be a formality you would think considering its from one overseas investor to another
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approval should be a formality you would think considering its from one overseas investor to another
Globally industry leaders, intelligent and strategic investors made use of price weakness to acquire promising poultry related business over the past four months.
Examples:
- Tyson purchase of Tennessee grain elevators
- Acquisition of Nutriad By Adisseo
- Acquires of French mineral feed company by Neovia
The latest one: Tegel
https://www.nzherald.co.nz/business/...ectid=12060617
Bounty Fresh launches Tegel takeover with minimum target already achieved
Beaten down stocks will not stay at the same level. Eventually, they will go up. Exception is very badly managed companies. Every company has fair value. No company is 100% risk free. Even solid companies will have less than expected earnings in some quarters or in some period.
Absolutely. Hope it fails and i can pick more up real cheap.
I have the takeover offer of $1.23
What is meant by performance rights? $0.043 in 2017 and $0.26 in 2018
bounty still buying on market own nearly 61% now
One would have to assume this is a fairly safe bet for 7cps + up to 4.1 cps dividend (~10% gain).
Do your due diligence on the conditions of the offer which still have to be meet (earnings etc) though. With the level on buying on market I would think Bounty is pretty committed.
Presume all will be revealed on Monday ......
Results are out:
https://www.nzx.com/announcements/319121
New Zealand’s largest poultry producer, Tegel Group Holdings Limited (NZX/ASX: TGH), today reported its FY2018 results for the 52 weeks ended 29 April 2018. The company reported Net Profit After Tax (NPAT) of $26.1 million, a decline from $34.2 million, impacted by non-repeating costs. NPAT was 23.8% below the statutory 53 week comparative period and 17.7% below the 52 week comparative period. Underlying EBITDA was $70.2 million, down $1.8 million on the previous period reflecting a decline in contribution from exports. Both NPAT and underlying EBITDA were within the company’s updated earnings guidance issued in March.
While the company delivered another year of record poultry volumes and revenue, the result was affected by non-repeating costs of approximately $9.9 million in total before tax. These came mainly from industry compliance, ex-cyclone Gita and organisational restructuring. These costs were within the range previously indicated.
A qualified audit opinion has been issued with respect to the company’s FY18 Financial Statements. Tegel’s Directors have arrived at a different opinion from the company’s auditors relating to the valuation of goodwill for the year. The Directors have formed the view that the Discounted Cash Flows model consistently used by Tegel arrives at a more accurate estimate of the value of the business, and therefore goodwill should not be impaired. In addition the independent adviser’s report, commissioned to assess the takeover offer for Tegel, includes a wide range of valuation modelling, the upper values of which are consistent with the company’s view of goodwill. The qualified audit opinion has no impact on the takeover offer for Tegel.
Tegel CEO Phil Hand acknowledged that while it had been a demanding year for the business, underlying performance remained strong and the company had made a number of investments for the long term benefit of the business.
“While it is pleasing to be able to deliver results within our updated forecast range, there is no doubt that it has been a demanding year on several fronts. We have stayed focused on delivering a strong operational performance, and our increased volumes and revenue reflect this. Tegel has a very strong domestic position, and we are determined to achieve strategic and sustainable export growth,” he said.
During the 52 weeks the company achieved highest ever poultry volumes of 99,908 tonnes and revenue of $615.4 million (2.0% ahead of the 52 week comparative period for FY2017 and $1.4 million ahead of the 53 week comparative period), underlying a solid domestic performance. Domestic revenue growth continues, driven by strong and increasing demand for poultry as a meat protein in New Zealand. Domestic revenue grew 3.9% to $467.1 million on a 52 week comparative basis and $9.3 million ahead of the 53 week comparative period. Revenue increased at a higher percentage than volume growth mainly due to a higher proportion of free range and value added products. Growth in domestic sales was further bolstered by new product innovation and growth in convenient meal solutions, particularly in Tegel’s Free Range products.
Tegel continues to strengthen its position in its established export markets, and CEO Phil Hand recognised the progress being made to establish a greater presence in Australia.
“In Australia, Tegel’s strategy to diversify across channel and customer mix and reduce customer concentration is starting to deliver results. During the year we increased volumes in both retail and foodservice, adding customers across all channels including QSR. This year we introduced 41 new products to our Australian customers and we will continue to drive innovative new product development into this market,” he said.
CEO Phil Hand said growth in free range products remained strong, and the company is aligning the business for further increased free range demand.
“Consumers are continuing to move toward free range product options, and the business is responding to this. Over the last 12 months we have increased free range capacity by 169%. This represents an additional 80,000 square metres of farm capacity. In future all new Tegel grower farms will be free range,” he said.
On 28 May 2018, a full Takeover Offer for Tegel was made by Bounty Holdings New Zealand Limited, a wholly owned subsidiary of Bounty Fresh Food. The Offer period runs until 25 August 2018, unless extended under the Takeovers Code. The Offer remains subject to a number of conditions including Bounty receiving approval from the OIO.
Tegel’s Board have approved a fully imputed final dividend of 4.10 cents per share, taking the total dividends for the year to 7.55 cents per share. The final dividend will be paid on 13 July 2018.
To the very hand the Directors reckon the company is worth zillions ...even though the auditors don’t agree .....nice to see
all in line with forecasts - tick
Rec'd some paperwork in the mail re Bounty takeover. Do we need to complete and accept the offer? What happens if I do not send in the paperwork?
At IPO, didn't they talk about how they are a growth company because of the export operations? which were to provide bigly growth?
Or some sort of growth, not go backwards 11.7%
Lucky (if not slightly surprising) that get out of jail free card is still on offer.
i intend to not be acquired, pick up more shares really cheeply and wait patiently for the cycle to change, and it will ,imo.
Just to clarify my mind, can some one confirm that should I Accept the offer after the Xdiv date, I will be paid in full within 7 days
I'd hate to completely lose this company to foreign ownership and poor NZX can't lose another company in the sorry states it is in now. So would 10.1% of shareholders at least refuse this offer and keep this on the market.
Soon this company will go from NZX to X-NZ, see what I did there =P
Bounty back buying again after the results. Upping their price to $1.19. This confirms they are 100% committed to the deal.
@ $1.19 Bounty also score the dividend of 4.1c a considerable discount from offer $1.23+4.1c = $1.271
opportunity cost - want to allocate the money elsewhere rather than wait around till bounty pay out
Bounty offer still conditional - It is not certain......
I am thoroughly disgusted at Tegel and the board of directors.
Their IPO listing was at $1.55 in mid 2016. Barely 2 years later, Bounty Fresh makes their takeover offer at $1.23 and the Tegel board unanimously recommend shareholders to accept the offer. What a bunch of bloody crooks they all are. At their AGMs, they've mentioned "The Board continues its commitment to maximising long-term shareholder value". A complete failure of creating shareholder value!!!
Shareholders accepting the offer means anyone who bought into the IPO will sell at a capital loss. This is not in the best interest of shareholders and shows the board don't give a damn.
They get bonuses by accepting i think.
Best way of ‘Maximising long term shareholder value’ from where they were at the time of AGM probably is the takeover. Huge premium and ‘long term’ the share price might never get to $1.23 without the takeover.
Buying things from glossy sales brochures and promises about the future always fraught with danger ...some turn out pretty good and some turn out bad.
Remember the deal was so good sone punters bought in 170s
Shareholders are very very very lucky to salvage imo something from this hogget dressed up as lamb.
They could have lost everything like the shareholders of Feltex, Wynyard, Credit Sails and South Canterbury Finance pref shares - Forsyth Barr being the common denominator.
Would imagine some key Tegel Management & Directors would be looking for jobs shortly.
just under 50% now soon have majority control no matter what
Ok I’m going to admit it - I’ve been a bear on this stock since the IPO because it was overpriced, everyone bought into the growth story on an unproven export market, low grain and transport prices. Despite this the shares were oversubscribed.
Have a look through this thread, lots of the bulls on this stock were accumulating at $1.68 without heeding warnings about oversupply or understanding about FMCG and how chickens are grown - there were even “informed” comment about how hormones were used to grow the chickens faster.
One post dismissed comparisons between Dick Smith and Tegel as the difference between a cut price retailer and a #1 food producer - I’d opine that Cadbury were once the Readers Digest most trusted brand as well but the performance of that brand has tanked compared to Whittakers because someone took that position for granted, Tegel isn’t dead but I find it astounding that folk thought a PE for a recent unproven IPO at 30 is okay but RBD at 25-odd with a much better recent track record is too expensive.
It’s a good case study on lots of people being convinced about this stock and the dogma - there’s even a post which I hope was tongue and cheek about low margins in the industry being a barrier to entry.
There’s a theory that once a human makes up their mind they will feel affirmed by any sort of news that they construe fits their paradigm or world view and dismiss the rest. Maybe like RBD after a while the stock could have showed value - certainly the Board of RBD thought so by hanging in there whilst resisting entreaties from PE firms and turned a $1.10 share around (although subsequently Tower dumped 10% at 0.55) to be the $8 share it is today. But we will never know because the Board have simply chucked it in - and I guess that really is the inditement of this whole sorry affair.
With over 67% held by Bounty appears only OIA approval is the only issue
With 1.19c share price and 4c dividend = $1.15 and $1.23 offer what are the traps ???
Funny ehh but in my experience, for the first time in a few years there was no cheap chicken at Pak n Save yest.:eek2:
No specials on drumsticks or legs at Pak n Save but fresh whole 1.9kgs chickens at $9.99 each, and tenderloins at $10.49 kg.
But, there's Mad Butcher's drumsticks last week at $2.99 kg and this week, New World and the local meat shop have drumsticks on specials at $4.39 and $4.99 kg.
Be a long while before demand catches up with the supply Tegel & Ingham have put in place.
That's not the same thing. The comment was essentially because Tegel and Ingham made @#$^ all that no-one else would be dumb enough to want to enter into the market compete with them. That isn't a compelling argument to want to invest in either of them.
And having penny dreadfuls that you can buy at under 50 cents doesn't guarantee any form of liquidity to a stock either. If you have BFW shares that are 66 cents currently, then the last time more than $15k of them shifted in a day was March (maybe) and before that January.
Last day for buying to get the 4.1cps dividend...
Any thoughts on when takeover may go unconditional ??
This can be used as a guide for a 'typical' application:
https://www.linz.govt.nz/overseas-in...ent-timeframes
well paknsave have boneless skinless breasts for under $7 a kg. Perhaps management have found out they are losing their jobs and intend to hand over a poison chalice!
Christmas and Birthdays only, when I was young.. Even though brought up on a Chicken farm.
The "man" from the ministry would come around and count them.
Therefore X amount of eggs would have to be supplied.. ( approx ).
Father placed a great many chicks into the wood stove to warm them up. Mother stoked it up to cook.
But that is another story.. Still will not consider investing into Chickens..
Not buying into this..
Paid off so far... :-)))))
With shares currently selling @ $1.14 presumably still some doubt about takeover @ 1.23 happening ...
Bounty have reached the 20% limit so can no longer buy on market. There has been a large institutional sell down and this is continuing, hence the downward price pressure. Question is do they know something we don't, or are they just obligated to reduce their exposure.
chicken farm on hold due to environmental issues and smells and maori issues
https://www.stuff.co.nz/auckland/loc...o-be-suspended
not supporting the issue but in general another example of resource management act taking fore ever to be able to do anything in nz
Just needs some koha to the local Maoris and $$$$ to the council, and many objections mysteriously disappear!
In an area desperate for employment opportunities and economic growth to wean the population off drugs and crime, the usual selfish do nothing and do gooders prefer to promote hopelessness and despair.
Modern farming methods and waste disposal take away most if not all of the issues the objectors have.
share price looking a bit soggy...OIO approval would be a timely step forward for the takeover
Surprising how quickly people forget the offer price meanwhile a little stonewalling helps to keep pushing sp lower??
Synthetic chicken and red meat has a lot of big money and names (eg richard Branson)behind it. Dealing with the humane aspects just one of many advantages.
44:21
Am I missing anything?
Buy circa $1.12, and if OIO approval goes ahead, Bounty buy back @ $1.23. (therefore 9-10ish % return).
If OIO approval is declined share price will 'plummet'.
"Tegel Foods calls for hearings on Kaipara's mega chicken farm plans to be suspended said they needed more time to respond to issues"
Believe farm not part of any approval and imo see no issues regarding OIO either but all will be revealed soon.
I see the price is sneaking up - wonder if a decision on takeover on way .......
Bounty offer closes on the 25th.
As I'm just trying to gauge the mood of TGH holders on this forum, has anyone accepted already?
disc: holding and NOT accepting, and would be happy just to be a part of the minority if in case
Also holding and not accepting. Granted it has been a rough ride so far and I'm well under water at the current price but I believe the company has a future and there are profits to be made
Accepting.
Holding...
Holding and plan to buy more if the deal falls over and wait until the cycle turns.
BOUNTY HOLDINGS .........total percentage held in class: 80.135% Not sure on rules but believe could be automatic mopping up over 80%
83% total holding today
This is all over bar the shouting....still another few days to go and very likely Bounty get past 90%.
I was happy to accept $1.23 with an average cost of $1.07 given Tegel's performance. Genuinely think it is a good buy for Bounty as they will extract more value from the company than we can as shareholders - hence the premium they offered.
85% total holding today
Added my holding to the growing numbers @ $1.30 as maybe 90% not reached this week ??
Summary for: Bounty Holdings
Getting closer.
For this disclosure,--
(a) total number held in class: 310,304,712 ordinary shares
(b) total in class: 355,906,183 ordinary shares
(c) total percentage held in class: 87.187% (rounded to three decimal places)
For last disclosure,--
(a) total number held in class: 302,443,034 ordinary shares
(b) total in class: 355,906,183 ordinary shares
(c) total percentage held in class: 84.978% (rounded to three decimal places)
OIO approval should be just a formality. Potentially a risk of it being declined for political reasons though?