With FBU the usual benefit from the lovely synergies and rationalization is a 'non-cash' write down of goodwill :eek2:
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With FBU the usual benefit from the lovely synergies and rationalization is a 'non-cash' write down of goodwill :eek2:
Just need another company to pop in a takeover offer and its game on.
https://i.stuff.co.nz/business/10757...uy-steel--tube
Fletchers sound fairly keen on STU some of those premium figures quoted seem a bit disingenuous re being a .... premium over the CR price - not sure that means much to most holders ....
Well..if the market thinks STU is worth more than $1.70...then it should trades more than that..so time will tell....wait and see ...next couple weeks. AGM is in 4 weeks time.
assumes you are selling, could be closer to 2 months wages if fletchers really wants in .....
https://www.nzherald.co.nz/business/...ectid=12136404
Fletcher dropped 1.5 per cent to $6.48 after its initial bid for steel products maker Steel & Tube was turned down as too low. Fletcher offered $1.70 a share, or $284m, and has the support of shareholders with 20 per cent of the company's stock. CEO Ross Taylor says he will keep pursuing the company, but was coy on whether he'll raise the bid.
Lindsay said the takeover bid was a surprise with other firms seen as more likely targets.
"The market was quite surprised that they would look to spend quite a lot of their capacity in bidding for Steel & Tube," he said.
Steel & Tube, which is outside the top 50, climbed 16 per cent to $1.56, still below the non-binding offer.
Yes interesting wording from the FBU announcement "Through this process shareholders, who collectively own more than 20% of all Steel & Tube shares on issue, confirmed their position that the Board of Steel & Tube should, in good faith, progress the development of the proposal with Fletcher Building, with a view to it being put to Steel & Tube shareholders"
This doesn't say they will accept at $1.70, rather that they would be receptive to a proposal to decide on (or accept if FBU ups their offer price).
Not disingenuous boysy, only doing what you do boysy — promote the stuff that best supports your story
Isn’t 58% premium to the weighted average capital raise price of NZ$1.07 tremendous return in such short time. Cool eh and many of us on here happy it eventuates.
What you make of the transaction multiple of 12.3x FY19 EBIT guidance when the average over the last 5 years of 9.2x. Without a takeover on the table you’d be rapt with a share price of $1.70, even with the touted improved performance that still has to be delivered in future years
Anyway we might get a bit more or we will have a chance on STU performing ...or take the money now and run
What you doing Blackpeter?
http://www.sharechat.co.nz/article/e...e-pursuit.html
https://www.nzherald.co.nz/business/...ectid=12136277
"Asked if the price might increase, Taylor said Fletcher hoped to continue to talk to Steel & Tube but "we "think it's a good offer and would like to see it put to shareholders. We'd like to continue discussions with Steel & Tube."
Body language says FBU is ready to increase offer and STU wants a higher offer.
GAME on!
Yes fletchers arnt doing much of a poker face are they ...
http://www.sharechat.co.nz/article/e...e-pursuit.html
STMOD: Do not copy & paste entire articles!
So if STU could stump up with say a quick $7 bil we could be on for a reverse takeover!
Steve I couldn't stop laughing.
The mice(Fletchers) offering to guard the cheese in the merchant steel market again.
The Commerce Commission would be unwise to let this takeover proceed without deep scrutiny.
Boop boop de do
Mariiyn
Sort of a hint they are out looking for other suitors
http://nzx-prod-s7fsd7f98s.s3-websit...082/288335.pdf
Well...$1.70 is a no...current sp is 1.48..what a bargain...might top up a bit today. Confirmed to resume dividend this financial year...so assuming STU is paying the same amount of dividend...the yield that I got is almost 12%:eek2:...better than my rental property!
Does make you think that the Board see’s the path to delivering ‘best value to shareholders’ is to sell the company
That alone is reason to hold in the meantime .......if that process drags out to next year time to move on. Would be a brave person to rely on STU delivering those touted bug profits
With EBIT of 25 million and a 70% of NPAT payout ratio (policy is 60-80%), over the 166 million shares now on offer we can hope for about 7.5c dividends, assuming 28% tax rate and negligible interest. Rising to 10.5c if they achieve 35 million. Unlikely to get back to previous dividend levels any time soon.
I'll be crossing my fingers for a higher offer from somewhere.
Got the letter...saying that to hold the shares tight as the sp will double in the future:t_up:
Steel is one of the central commodities in the current trade war which is supposed to make America great again.
A steel manufacturer tiring of the tariff and protectionist BS facing its internationally traded products would find a merchant steel distributor in a relatively friendly market to foreign trade an appealing distribution channel.
Cmon merger and acquisition drones there are potential fat fees in the offing here.
Boop boop de do
Marilyn
PS. I want to give some confidential advice to the Fletchers government relations drone. Has everyone else stopped reading... good I'll go on.
You want persuade Winston First to play the nationalist card and block any nasty Johnny Foreigner taking over STU.
Hey it has worked before. Remember when Petrocorp was to be sold to foreign British Gas. Richard Prebble imperiously over ruled the sale and handed Fletchers the golden ticket.
https://www.nzx.com/announcements/325268
Revised offer - $1.90 plus 5c dividend.
Game On BIG TIME!
I LOVE THIS!
Good buying in the cap raise afterall. How will mr market react this morning is the question ...
Com Com approval won’t be a problem ......Fletcher’s probably done their homework and had some ‘discussions’ with them already (on a hypothetical case of course)
How STU see market
https://steelandtube.co.nz/sites/def...x%20Letter.pdf
If acquired the resulting top 2 control a fair chunk but room for others
Further signs of ongoing FBU ineptitude I reckon. Amazing they would bid this much for this this mutt of a pup with so much uncertainty hanging over future earnings and all that before FBU have the money in the tin for the sale of their unwanted assets. Mind boggling stuff. I'd be dumping any FBU like a hot scone if I had any.
Interesting dilemma for shareholders and punters. I chose the word punters carefully because anyone buying at this level is really taking an unknown punt of Com Com approval and in this political environment you might as well flip a coin on the outcome. Heads they get approval and you get your $1.95 including special dividend in about 4-6 months time, tails you "enjoy" remaining a shareholder and look forward to hoping that STU directors with their chequered track record can deliver on earnings.
If I had cash I would have brought STU soon after the initial take over offer, this one was always on the way.
Pondered buying at cap raise time as well but ultimately decided not to (my mistake I suppose).
Congradulations to holders. If FBU bid in the low $2's, I'm sure STU would accept
Looking promising toward lifting my portfolio out of last weeks doldrums.... if only I had had some spare cash when it all went down!
Then comes Beagle's dilemma - do I cash out now and quickly reinvest in other languishing stocks, or do I hold out for Trader Jacksons low $2 offer to eventuate? Decisions decisions.
Good grief!............I actually got this one right (thus far). Acted on the gutometer and information out there that indicated (to me) this was a given. Picked up 15000 of them last week at 1.50. At 1.70 i may even buy more........still looking cheap based what we know as of today??
Food for thought. Does the current political environment have any influence on the Commerce commission ?
They are too busy trying find out why petrol prices are so high (without drawing attention to greedy govenment double dipping on tax)
Cindy thinks we're all part of her Kindy. Her hypocrisy costs her substantial political capital, no question about that but she seems keen to hammer food companies next, what's after that, building products ?
https://www.nzx.com/announcements/325313
withdrawn anyway. carry-on everyone. nothing to see here
Just another day that proves I will never understand the stock market :confused:
How did we go from a buck 50 to a buck 70 and then to a buck 40 based on that news?
I note the FBU proposal was strictly confidential (point 4). I wonder if STU actually got the okay to release the information of the revised offer to the market? If they didn't, you cant blame FBU for getting the hump and pulling the plug can you?
wow! this is a sudden reversal! Punishment of STU's arrogance/confidence?I suppose STU were just to ambitious with the price they wanted!(given they haven't yet delivered...)
I am surprised people are still willing to pay $1.40 right now, given that prior to these rumours/announcements people were barely willing to pay mid $1.20's
I suppose PEB will be the only one for today to continue double digit percentage gains
Well...party over.....sorry guys!
Brinkmanship?
A way to bring STU board to the table?
Or possibly FBU was too hasty with the revised offer. Certainly wasted no time in withdrawing it.
It ain't over yet, I predict.
Over 20 minutes later and STU still haven't announced anything...
They giving FBU a call apologising for there arrogance and begging them for a deal at $2.10?
Very odd doesn’t reflect well on either party does it ?
That is because before these rumours/announcements, there was nothing to suggest that anyone might be remotely interested in STU. That perception has changed, especially now that we know that FBU had put an offer of $1.90 on the table. (after an initial offer of $1.70). I guess you could call the extra 30 cents a "potential takeover premium".
We have an implied value of at $1.90 per share here right - how that can be a bad thing?
Yep you wonder if FBU are looking to buy a stake and go hostile on the board .... could be an interesting ASM next Thursday ....
I can see that reverse takeover happening now STU have found the $7 billion and are just finalising the terms!!
Some advice to the Commerce Commission;
If the merger goes ahead where there are now two warehouse or distribution premises in the same area one of them must be immediately divested.
Where the premisses are owned they must be sold without any restraint of trade conditions.
Where leased they must surrender the lease when the landlord finds a new tenant even if this tenant will compete with the merged entity.
If the closed premises have any cutting, folding, machining or materials handling equipment it must be held in situ and be available for sale on an unconditional basis. Any scrapping of this equipment will require the approval of the commission.
Boop boop de do
Marilyn
What seems really strange to me is that STU has not informed the market that FBU has withdrawn its offer. That should have come out at the same time, as it would be material one would think. Or did FBU not even inform the STU board that it had withdrawn its offer? WOW!
Agree. FBU have withdrawn a proposal for a scheme of arrangement that was dead in the water anyway as it needed the endorsement of the STU board. If Fletcher walked away from any potential takeover when the targets management/board said they didn't like the offer they would never have become the conglomerate they are.
Still nothing that’s a decent long lunch those STU boys and girls are having. What a shambles so they managed to infuriate FBU from 8-30am then FBU pull the pin over 2 hours ago and not a peep from STU ...
Gosh. This is more dramatic than Shortland Street !!
Disc: I have never watched Shortland Street
I find it extraordinary that the share price is still about 20% higher than it was 3 weeks ago, all simply and only due to speculation on a potential (far from done deal!) takeover offer from only 1 company.
I know it, you know it, we know it that management have told us for months the share price is worth north of $2, and nobody believed it just over 3 weeks ago! So for FBU (a company who has a track record of overpaying) to maybe offer up to $1.95 doesn't mean that much to me, unless they follow through of course.
Not too keen to pay 20% premium for something to maybe happen, however, things are quiet... too quiet.
At least not many punters got sucked in first thing this morning
Yeap it crossed my mind to have a punt and I am really pleased I decided that this pedigree dog does not play with mutts. My investment mantra has saved me again "No if's and no but's, hold no mutts"
The same FCNZ that reckon FBU shares are worth $9 lol. The market is saying there's a VERY long road ahead for both companies to build their credibility back to some sort of reasonable level and I think the market in both cases is spot on ! One ugly sister taking over another one doesn't necessarily make a case of one plus one equals three. Some of FBU's previous attempts to extract synergies have been abysmal failures so now they have to sell them off because they can't manage them properly...but they're in a hurry to make another acquisition even before they've divested themselves of past failures...go figure.
Well that was an expensive fishing trip i went on this morning! Set out after reading the news of a higher offer for my 15k shares I bought last week. Came home (with no fish) this afo to find my $3k paper profit has disappeared......BUGGER! shudve sold THEN gone fishing. So all in all a rather crap day. Having said that tho I still believe there's 50c a share profit sitting there.......FBU have done the ground work for a slightly higher offer now ($2.10?) which Im sure the board will recommend and be seen to be playing hard ball. Clever play FBU.
Yes let's. Someone in Fletcher must have written a damn fine board paper to get the Fletcher board looking at acquisitions when they are also trying to divest assets and reduce borrowing. Are Fletcher going to abandon now? The shear speed with which a lumbering corporate moved indicates their cancellation of the offer was preplanned and delegated to a single person.
You've got to be an optimist to be a fisherman. There's an old saying, "a bad day's fishing is better than a good day at work"...although that's doesn't always hold true as I witnessed a boat not being secured properly while being towed away from the boat ramp the other day and it fell off the trailer and smashed up the engine and hull. Probably cost him more than $3,000, feel better now :)
STU directors are dreamers and they and senior management simply want to keep their snouts in the trough for as long as possible..its really that simple. What shareholders want is something that I doubt even figures in their thinking.
STU really left FBU with no choice if you read FBU's increased/revised offer to STU - which is that the proposal is to be treated as confidential and as a basis for negotiations. STU promptly released the offer on the basis that FBU has had discussions with some institutional shareholders and so the rest of the market should be fully informed.
What STU has done is to ratchet up the sp with the release making FBU's offer (again) look not as attractive - as if the sp has stayed at $1.50.
So FBU has pulled the offer which means that sp falls back to the $1.50 type level.
A hostile bid by FBU (nothing to stop them making such a bid) at $1.95 will look most attractive with sp at say, $1.45.
More twists and turns ahead.
Maybe possible Balance but don't overlook the political environment and Cindy's Kindy having their influence on Com Com.
Perhaps they'll suggest Com Com appoint a working group and report back in 2020 like all their other ones :D
I hear that. I was watching to see where it went after the initial flurry. I decided to drop mine on the market at 1cent above trading and not be greedy - then it all went south and I was left wishing I just hit the sell button!
Not that I am too worried about still holding them, but I see some of the shares I was looking at switching to rocket away today just to rub salt in the wound!
For sure but ask the guys who bough this morning at $1.70 + how they're feeling and they'll probably tell you that there's better odds and far more transparency at one of Sky City's roulette wheel's. At least you know what the rules and odds are, these companies seem to make them up as they go !
I'd say the people who paid up pre FBU announcement didn't pay enough attention to the "indicative" and "non-binding" language.
Question: the local Takeovers Code where I live has a 6 month cooling off period before someone who announced a possible offer and decided not to proceed is allowed to make a new offer. Does anyone know if the NZ Code has a similar provision?
First thing yesterday STU were only to happy to announce the $1.95 offer and how it still isn't sufficient... STU did not bother to try keep it a secret (something it became apparent FBU wanted) or even mention they were meant to keep it secret, and instead rushed to trumpet the new offer and how it still isn't high enough.
It almost seems STU are in denial that management have 'blown it' as there has still no announcement that FBU have retracted the non binding indicative offer.
If I were FBU, I too would be pissed off with STU's implied arrogance and follow through with not doing anything... for months, maybe several months, wait for the share price to fizz out and then accumulate. No point rushing this one, STU management are clearly so confident in their plans they clearly don't have any worries either (or at least this is how they want it to look...)
Then again, shareholders can't be worried even if management did just blow a quick and easy deal... STU's management are clearly confident
Was interesting the market didn't share such bigly confidence just three weeks ago.
Clearly FBU will now simply bypass STU management and go hostile. Will we see FBU hoovering shares on market is the next question ...
Non binding and indicative is language that's not new to me so I wasn't prepared to put my hand up for any. Really the question is should such a speculative attempt at a takeover ever been played out in public ? Clearly FBU directors think not, whereas STU directors took a different view, probably because they've been so "transparent" about their problems in the past, (sarcasm intended).
Not aware of any such provision in our takeovers code but not pretending to have a good knowledge of it either.
Absolutely, Balance, one must make a decision whether they want to get involved with the shenanigans of the inept and its even uglier cousin in the industry or stick to investing in quality companies where companies have a long and credible track record of doing what they say they'll do. One is trading and speculation, the other investing.
I merely comment because I find these sort of corporate fiasco's amusing and perhaps my warning yesterday about possible Cindy's Kindy political influence of Com Com gave some food for thought to those tempted to pay up at over $1.70 and saved someone's bacon ? We'll never know but I am sure you would agree it never hurts to have a robust debate from all different perspectives :)
I agree the investment bankers will be raking over the coals of this proposed deal like a school of hungry piranha's looking for their next juicy feed...but there's no guarantee whatsoever that the two ugly cousins will wed or that Com Com will give its blessing at the alter. Remember too that while few would argue that there's a high degree of competence at the senior level's of those investment banking firms serious questions exist about whether the boards of FBU and STU are of the very highest caliber...and then there's questions about whether people simply want to stay in their jobs at STU so they can keep their snouts in the trough as long as possible.
FBU will want to tie up the main institutional holders like harbour milford and ACC before going hostile but given the amount of shares in the general publics hands certainly a hostile takeover is on the cards.
The deal was $1.95, anything more is pure speculation on your part. Upside was therefore 25 cps but would probably take 6 months to clear the regulatory hurdles so a 14.7% gain in six months with all the uncertainty involved while facing a (probably back to where this started at $1.40) = 30 cent downside is not as attractive objectively as you suggest.
Roulette wheel with one green zero has a 2.7% house advantage. What was insiders advantage in this fiasco so far ? Level playing field for all ?