DROPPPPPPPPPING another 5 cents ,
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DROPPPPPPPPPING another 5 cents ,
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Okay I'll say it...was trying to resist yesterday. I can see a capital raise coming and it'll have to be pitched at a huge discount to the current SP.
I think there's a real possibility this has a 4 handle in the near future.
well the 'amendments' werent agreed so obviously there is some devil in that detail. there could be 2 months of further haggling and uncertainty - though of course they might work through it sooner.
They've been known to be arrogant in dealings with suppliers, hopefully that attitude wont carry through into dealing with their suppliers of capital.
Wesfarmers fishing .... https://www.stuff.co.nz/business/103...tcher-building
Could be interesting , but could you trust FBU not to bring out more losses before they turn the corner !
wow up 11 % !!!
Nothing like a bit of takeover talk eh
Would be a good "under arm" if they did.
FBU has a record of destroying shareholders' wealth.
If the Aussie can make a go of it,good luck to them.
The Buffet saying about people with a good reputation joining a business with a poor reputation.?
The business retains it's reputation.
Certainly has been proved correct by FBU.
nothing in the australian financial review , so sounds more like nz ramping to me
Agreed. New captain at the helm of the Titanic won't make much difference. Behind the paywall article on NBR recently suggesting that analysts are losing confidence in anyone's ability to run this behemoth which is too unwieldy in its current form, successfully. Shareholder value can only really come from a break-up.
I think its a flea ridden mutt.
The new CEO is an engineer with a good reputation.
It is in AFR
http://www.afr.com/street-talk/big-d...0180412-h0ypcn
Although I am surprised AFR weren't onto it sooner to be honest... they are usually 'first in' with this kind of stuff
Soggy finish but up .50 , 8.6% on the day , this story will have many chapters !
Wonder who Ellerston are?
https://quoteapi.com/resources/da986...ial_holder.pdf
Will be interesting to see who they are buying this stake for http://www.nzherald.co.nz/business/n...ectid=12033283
http://www.nzherald.co.nz/business/n...ectid=12033283
I smell a planted story designed to get the sp up and profits via the plant.
Ellerton makes it very clear that the shares were bought in a discretionary manner for clients - not under the direction of any client!
If Wesfarmers is the beneficial owner, it would have had to disclose so - otherwise, it risks forfeiture of the shares.
Another possible scenario is they have bought for Wesfarmers but also other clients which took them over 5%...might be Wesfarmers are 4.9% and the balance that tipped them over 5% was for other clients as seems odd to go to 5.13% and thus be forced to disclose.
The stake is worth $200m+ which is a large bet for a fund manager with $5b but not out of the question if they see real value at $6...
ill try my luck on a short again on the open in aus worked nicely last week , pump and dump stories i reckon
http://www.nzherald.co.nz/business/n...ectid=12033325
"Doing what other fund managers do" BUT the media writes it up as Wesfarmers and a takeover in the offing.
NZX and FMA investigating or asleep at the wheels as per usual?
Still have the US debt to deal with which is having some issues, not as easy as they initially thought it would be. But at least some positive news flow
So $750m capital raising at $4.80
All honky dory for the future of Fletcher’s once they get rid of Formica.
Do we call this a shareholder ‘bail out’?
desparate moves by a troubled company
westfarmers confirms it does not own shares in fbu .... nice story to pop the shares
Do they need OIO approval as a good % of S Hers are domiciled outside of N Z ?
now they state there is problems with the puhoi highway, what other "problems " are out there yet to be revealed ?
https://www.nbr.co.nz/article/fletch...roup-jr-214750
Some interesting thoughts in the comments section about likely motives for the Wesfarmers story.
Do you think it will re-open around $5? Not that I would touch it at that price.
FBU to sell Formica, didn't they buy that company a couple of years ago , ideas at what price ?
$25m capital raising costs!
Desperation, thy name is Fletcher Building.
A potential billion dollar government bailout of botched EQC repairs. I can tell you that EQC arent alone. There is EQC and Fletcher's with a hand each on that particular smoking barrel. (http://www.newshub.co.nz/home/politi...ed-claims.html)
Coming out and admitting they're making nothing on the major Puhoi to Warkworth contract is quite simply pathetic. When will the bleeding ever stop ?
Honestly I would not put my hand up for some even at $4.80 even if the rights were given to me for free. Plenty more skeletons to come out of the closet yet, as sure as night follows day...
How many ways can you say 'dog', Beagle? Bottom feeders are already buying up the potential future, so maybe it's the bottom or thereabouts already. No point in ignoring the future when one has some inkling that informed (smart?) money (major assumption on that) [since December 2017] has been buying huge dollops sees a profitable future. Ma and Pa shareholders as always are last into the tops and the bottoms, they need clues and there's a few big ones emerging already. The 'dog' rhetoric will look hollow and misguided if it's issued around the point in time when the smart money takes a very large position and the dumb money are selling to them.
Just saying, best to have an open mind and eyes on.
Underwriting fee of 2.0% and a management fee of 0.6% takes most of the $25m expense. Thats not unreasonable in the circumstances. The circumstances are what I find unreasonable!!
I've been negative on FBU for years and laughed when several Aussie funds buying pushed them to $10-11 about 18 months ago. But I just bought in at $6.05 because despite all the cockies and negativity they have some very good assets and the uncompetitive CEO is gone (Norris will be soon too) along with too much negative sentiment after the stock has fallen 40%.
Of of course I could be proven wrong but at $6.00 I think FBU is too cheap and in 12-18 months they will have substantially recovered.
No dividend for the rest of FY18 either. Whose to say these will return next year to previous levels?
If this drops to $5ish after the cap raise I would be interested in having a little stab.
Ironical but in the older days when FBU raised new capital to acquire Formica ($1.3 billion) and Crane (another $1.3 billion), the sp actually rose after the capital raising.
Guess the market believed in the management and the company then.
$750m is a big capital raise for any NZ company so I suspect the sp will come back down to around $5.25 - $5.50 as shareholders in NZ and Oz sell down to pick up the rights, when trading resumes on Friday.
Note that the institutions get the first bite of the $4.80 shares so the successful ones will have a chance to crsytallize any premium above $4.80 from Friday.
Retail investors/shareholders will not have their spanking new shares until mid May!
Yup.
Meanwhile, SMH which 'broke' the Wesfarmers story still cite 'sources' that Wesfarmers still has FBU in its radar!
https://www.smh.com.au/business/comp...17-p4za30.html
FBU, Underwriters and whoever planted that story thank SMH for its service to FBU!
I see on NBR that NZX and FMA have got their wet bus tickets ready to unleash on whoever was responsible! :D
I wonder how many of the instos that hold FBU are in the money after holding their shares from 2000 ?
when fbu sell formica the sum value of fbu will be much lower - less assets , less revunue and profit , less dividends one day so i would be very surprised to see the shares trading higher
A little off tangent but I see some secret letter has appeared in front of an MBIE enquiry into Statistics House partial collapse after the North Canterbury earth quake
https://www.stuff.co.nz/business/103...atistics-house
Fletcher were the construction co.
There is still considerable anger than no one has been held to account for the Christchuch CTV building collapse.
No, it's not "right", but that's the usual way that these accelerated capital raisings seem to work these days. An institutional "book-build", followed by either an SPP or a rights issue. I think that companies and underwriters justify these by claiming that the amount of capital required is beyond the capacity of shareholders via a full rights issue. Maybe.
Just noted this from behind paywall, re the comments that Fletchers had booked no profits on the NX2 Puhoi job:
"Somehave taken comments about the infrastructure unit of the construction divisionas signalling that the rot has spread.
Fletcher probably caused this incorrectinterpretation by noting in its presentation on Tuesday that “at this point,Fletcher Building is reporting a nil margin” for the project.
But as chief executive Ross Taylorexplained to analysts, Fletcher’s practice is not to book any profits on suchprojects until they’re at least 20% complete so the nil margin is what it wouldhave reported for this year, even if the project was going swimmingly, becausethe project is only 8% complete and has another four years to go."
https://www.nzx.com/announcements/316915
So 98% of eligible institutions took up their entitlements, $500m, leaving $10m shortfall for the 'auction' which took place today.
Strong support, says FBU. As if any institution would not participate in a 22% plus ($1.56) discounted share issue!
So retail shareholders represent $250m of the capital raising - and yes, they are treated indeed as second class shareholders!
https://www.stuff.co.nz/business/103...by-nzx-and-fma
So NZX and FMA are investigating.
"The Sydney Morning Herald reported on Friday that Wesfarmers had built a stake of between 3 per cent and 4 per cent in Fletcher Building, citing sources close to Wesfarmers."
Sources close to Wesfarmers? Could not be further from the truth so one guesses that NZX and FMA have ordered another batch of bus tickets, ready to soak in rainwater for the spanking to be administered?
Yes - the institutions will get their $4.80 shares first and can sell to lock in any gains if they so choose.
Be interesting to see how this plays out - will many retail investors sell shares to pick up their entitlements or are they content to take their chances with the auction for shares not taken up.
Just face it, this is a big money game, always has been, probably always will be. The minors are insignificant minnows, you'll all be subjected to being second class citizens and the treatment that goes with it. Screw equal shareholder opportunity, it's a pipe dream, a fallacy, improbable and not worth worrying about.
To get with the big game, which is whether your holding or entry is at the lowest price possible, you'll either sell out, top up, or buy in while the company prostitutes itself for capital raising, some of that opportunity will come your way albeit a small percentage in the scheme of things. The situation is fairly obvious, you just have to do what you think is the right thing for you to do. Make a decision, follow the big money into the bottom or whine about the process and being hard done by as a minnow.
Follow the money. Best example on the NZX right now as far as I can see. The FMA and NZX regulation stuff is a sideshow, it will unfold way after the opportunity for shareholders or wannabe shareholders, to make some decisions, right now.
Institutions operate always with cash as part of their portfolios - so they are in good position to partake in capital raisings.
Retail investors, especially those who invest for income/dividends, tend to have to sell shares to partake.
So many will sell existing shares at above $4.80 in this case to pick up the 'new' shares - and they get picked off by the institutions who can sell first and buy off al lower prices from them.
Anyone planning on picking up some today?
Aren't the shares trading ex rights when trading resumes. A retail shareholder can simply sell the number of existing shares equivalent to the number of rights they receive. This money is then put in the bank for three weeks and part of it is used to buy the rights at $4.80. It's a slightly better cashflow than the "first class" institutions. It may even be more tax favourable.
https://www.nzx.com/announcements/317011
2.2m shortfall cleared at $6.15.
I have shares in FBU and want to take up my entitlement(I think).Will FBU send me out a form to fill in or will I have to contact ASB my broker.
Should I do this now or wait a couple of weeks to see how things go or is it first in first served.Thanking you in advance
You should get sent paperwork and forms from Fletchers
You are entitled to your 1 share for 4.46 held no matter what ....not first in first served
Looks like you can apply on line https://www.fletcherbuildingshareoffer.co.nz/offer/
OK. I'm half stunned with drugs and alcohol and nasty falling trees in the past few weeks but I purchased 8,000 shares at 628 recently in the belief that they might just rise rapidly and make me a bob or two. Today I discover that my 628 is 620 but its marked as a rise? Firstly I thought that it might have paid a dividend. Now on this forum I seem to be in line for an issue of shares at 480cps on a one share for every 4.4 shares I own? That seems to be i800 shares to sell at market? Is that correct or should I go off the morphine and just stay in bed?
I purchased 8000
I still think there's plenty more skeletons in the closet and the new CEO has an awful lot of systemic issues to fix in the company, (if he ever can), so No I wouldn't be an investor in this going forward as this is like a large ship with a couple of very small rudders. Perhaps not like the Titanic anymore now they may have stemmed the worst of the leakage but it still looks like a cruise to nowhere with below par food, (dividends) along the way.
This doesn't pass the hounds sleep test, do I feel confident tucked up in my kennel / cabin at night thinking the captain and crew know what they're doing and the ship is sound and operationally fine...no way !!!
Some might even be so unkind as to suggest this is just a rearrangement of the deck chairs on the Titanic...surprised the institutions lapped up this rescue effort, haven't they been bitten by this mutt enough already ?????
Still...what would I know...thankfully enough to avoid ever getting bitten by this dog.
Yep you are entitled to 1793 shares but need to front up with $8600 odd. Once you have them you can sell them
If you want to sell some of the 8000 to pay for for the entitled shares you will only need to sell about 1400 at current prices
Or you could save a lot of bother and do nothing and hope that they get a good price for those shares not taken up and then send you are nice little cheque. Like if they got $6.20 for them you would get a cheque for about $2,500 ...cool eh ...but all depends on how things go in the meantime but that’s what I would do.
Corrected earlier post ...I stuffed up the $2,500 bit
Discounted cap raise @$4.80 and the BI unit losing up to $660M by 2019 is this SP artificially high?
Rob Mercer head of research at Forsyth Barr in a behind the paywall article on NBR this morning cautions that this well timed capital raise doesn't solve the systemic operational weakness's within the company and further cautions that other's are starting to eat FBU's lunch in areas of their traditional highly profitable operations, e.g. cement and wallboards.
Can't help myself watching this super slow motion train wreck. Plenty more pain and angst to come...
FBU the gift that keeps on giving for those that like watching train wrecks.
Agree a price in low $5 might be more suitable. Their incompetence sounds deep rooted and an entire cleanout might be needed.
On the plus side they do have (for how long) a monopoly on the inefficient NZ building market. As the pressure increases on the low productivity in NZ due to the high demand for accomodation the Gov will become increasingly more hands on with regulation + $. Has anyone noted the new China construction companies building in Auckland? Are they bringing in their own China labour too?? I think this is a result of the lack of construction resource here.
This company is like a bloated old dinosaur. Very poorly managed and governed. I think all and sundry will try and eat their lunch going forward and probably with quite considerable success. A real free for all of new competition, lead by hard working foreign immigrants not afraid of a hard day's work and not expecting a small fortune for their labour either and more efficient distribution channels for building products.
I still think something in the 4's could be on the cards in the foreseeable future as this train wrecks keeps unwinding its way down the track.
Long term I see this continuing to destroy shareholder value and $4.80 might not be the apparent bargain many think it is.
From a broker :
Short covering in Australia keeping post rights issue price up.
Be interesting to see what happens after all the shorts are covered.
http://www.sharechat.co.nz/article/5...te-losses.html
Just two months ago the CEO told shareholders the convention center would be completed by mid 2019 now SKC tell us December 2019.
Probably sometime late in 2020 if they're lucky lol...the train wreck continues to be the gift that just keeps on giving (for those that like watching these sort of unmitigated corporate fiasco's from the sidelines).
Whos wearing the extra 6 months cost? Is this factored/disclosed by FBU to market? If FBU says mid-2019 then have they not informed the market of the extra 6 months costs. Avoid stock until they come clean.
Heard Rod Oram say on National Radio that another issue for FBU now is that since they announced they’d be withdrawing from the business of building buildings, they’ve seen an exodus of contractors. This could possible be partly to blame for even further delays
FBU will be wearing the cost for sure. Plenty more carnage to come in this almost endless fiasco. Bunnings in the Herald today saying they're looking to double revenue in their branded stores within N.Z. within the next few years. FBU vulnerable to attack on their lucrative profit area's of business, left right and center.
Yes Iceman. The team at SUM noted in their address that the availability of construction workers had improved since the FBU fiasco got into full swing. I just hope SUM are discerning in terms of who they hire and their new construction fraud team have clear focus.
Sorry missed this yesterday - yes, Chinese are here and they did bring their own labour force, I think the Hyatt down the bottom of town is being built by China Construction Company, 200 workers from China on board. Also was discussing markets with a guy from a civil contracting firm yesterday, he noted he is facing more competition from Australia, and I note that Europeans have picked up NZ companies over last few years - HEB Construction owned by Vinci now, and CPB (used to be Leightons) is owned by Spanish company. Lots of change to come in this sector.
https://www.msn.com/en-nz/news/natio...cid=spartandhp
Some serious food for thought in there. You have to wonder given this is arguably one of the greatest destructions of shareholder value we've ever seen in N.Z. why have we seen very little change at board level ? What's the minimum shareholding anyone ? Could be worth the price of admission to the next annual meeting which could be a real riot !