If you do nothing and they get to 90% they take you out anyway if you accept you get the enjoy the BGR ride with the benefit of them part or fully owing KMD seems like a good plan givens BGRs record.
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If you do nothing and they get to 90% they take you out anyway if you accept you get the enjoy the BGR ride with the benefit of them part or fully owing KMD seems like a good plan givens BGRs record.
I wonder if the silence on this takeover is because of behind the scenes negotiations on price/terms? BGR will have known what they were prepared to pay, but maybe remaining big holders are saying no, Goldman Sachs in particular. Looks like BGR have 14-30 days to send takeover ie. 16 Jul to 1 Aug.
KMD also yet to have independent advisor appointed and approved by Takeovers Panel. Perhaps discussing whether or not Goldman Sachs is independent.
http://www.takeovers.govt.nz/assets/...t-linked2a.pdf
Relax everybody. Tuesday's AFR says the bidder's statement will be released "within a week".
Meanwhile, I might buy a few. Big fan of BGR and Rod Duke and have never quite shaken off the - often profitable - habit of buying into a takeover!
The takeover forms have been sent out.
https://www.nzx.com/companies/KMD/announcements/267426
Expecting some guidance from KMD board next week?
KMD board have only said this so far.
Would be a huge waste of paper if no one accepts the offer!!!Quote:
At this stage, shareholders are advised to take no action in response to the proposed Offer.
If it succeeds you get to enjoy the kmd ride anyway
Hey this is possibly a newbie question but does anyone know the implications of the takeover offer on shares held by the passive investors (Smartshares etc). As they are just tracking the index do they just have to abstain?
Received the offer today... quite tempting really. But I think will sit on it for a little while as it does not close till 17 Sept 2015.
Agree couta. The offer is lowball and Duke knows it - thats why he's trying to pressure KMD to release FY2015 by Aug 1. We now enter the interesting phase.
Just got the nice glossy offer document from Briscoes in the post with that nice Briscoes lady on the front and back covers, although I like her smile its not worth 10k to me. Hopefully others will see through the smile as they say.
This may encourage those reluctant KMD holders to accept the BGR bid.
http://www.nzherald.co.nz/business/n...ectid=11489208
;)
Reject recommendation including valuation data and unaudited FY2015 data.
Not surprising and imo a fair call.
https://nzx.com/companies/KMD/announcements/268006
The valuation fits with analyst predictions and I think the share price will go over $2 by year end anyway.
Your call now Rod.
That presentation is the biggest load of **** I've seen for a while. Talk about strutting your stuff when you have stuffed up big time and think you have fixed things.
Never mind this could get nasty if Rod is keen. About time we had a decent hostile takeover with plenty of name calling and things like that. Could be fun.
Rod will give a bit more ---- but not any more than $2.20
KMD shareholders should be be thankful Rod came along .....wouldn't be anything near 170 today with Rod
I doubt there will be an improved offer either, especially on the back of recent business and consumer confidence survey's recently which have been anything but stellar.
For instance, I can't see too many dairy farmers and their wives and children updating their adventure and apparel gear in the foreseeable future.
A seasoned guy like Duke will not be worried about short-term impacts from consumer confidence and business cycle news. If anything this is often an opportune time to buy up businesses (hense KMD offer). Don't forget KMD is essentially an Australian business with NZ exposure and Australia's economic environment has been questionable for a while.
There is no doubt that this takeover offer is opportunistic and $1.80 is very much a low ball offer. With the recent struggles KMD have been through it puzzles me that people forget that only in 2013 was KMD being blamed for Snowgum's demise, indicating a very strong market position.
I agree that the business has perhaps suffered from over expansion in recent years, but the good news is that it has not been over leveraged and therefore the business still holds allot of flexibility going forward.
With all that said at the right price (closer to $2) the merger could provide a great deal of synergies for both businesses. This would provide the joint business with far greater leverage when dealing with suppliers in Asia, which is often a difficult negotiation process for smaller companies within the Asia Pacific (compared to much larger US and European retailers - Cabelas and Dick's Sporting Goods only to name a few). Essentially clothing retailers these days are brand managers and any opportunity to buy the products they sell at a cheaper price is a very desirable move - the story of value creation; operation efficiency and revenue growth.
With Duke owning 80% of BGR it is in his best interests to low ball KMD at the begining. Who would want a CEO excessively invested in the company he managers not trying to maximise his wealth through the business - I wouldn't! If this is truely the price he values the company then he was stupid to not start off lower.
You might get your wish winner. Messr Kirk gently unloading a little on Duke here. Handbag stuff but hopefully provokes an escalated response!
http://www.nzherald.co.nz/business/n...492934&ref=rss
Hostile it is !! Duke scoffs and talks in a fairly derisory manner and basically says "put up your dukes"
http://www.sharechat.co.nz/article/c...as-too-lowhtml
Love it... stand back everyone, they have their gloves on and dukes up and we are in for a good battle here :)
I'm just gonna leave this here in regards to KMD boards response.... :t_up:
Go Team Briscoe, stick it to the dreamers at Kathmandu
Good response but not pointed enough,stronger language next time please. PM me and I'll point you to a real response rubbishing a crappy company defending a takeover
https://www.nzx.com/companies/BGR/announcements/268091
Still just the preliminaries, winner.
Love a good takeover tussle. In the old days I made a habit of buying into these. Generally there were good odds on the first offer not being the last!
;)
Entertaining stuff isn't it mate. For my money I'd back Duke's assessment of the situation any day of the week and twice on a sale day. I think Duke will get his boots filled and will have his hands very full turning around some intransigent management thinking in KMD. I wish him luck...if anything I think he's paying too much for a tired old brand with a cost structure that's simply too high for today's market. I won't buy either company at present prices.
http://www.sharechat.co.nz/article/e...ptimistic.html
That guidance from KMD implies a Gross Margin of 67% of sales over the 2nd half of the year
Highest ever for any period ever by looks of it. First half of year was 55% but we know they stuffed up big time. Half 2 last year was 62.6%,
Astounding recovery .... if sustainable valuation should be $3 plus .... but then they stuff it all up by forecasting reduced margins next year .... go figure
hmm
KMD directors are dreaming mate. Look where the currency is. Duke is dead right and KMD would be plumbing new lows if it were not for his offer. Probably lower than the lowest in the last 12 months which is $1.25. Maybe $1.00 without Duke's offer ? You never pay for value you create yourself, Duke knows that. KMD directors out too lunch ?
We will have to agree to disagree on this stock Roger, personally I believe it would only take a good year to bring it back to a $3 stock so not happy to sell for peanuts and take a loss.
With all due respect, what you paid for the KMD shares is not that relevant to what they are worth today, or might be worth in the future, or how you assess an offer of $1.80
The real question KMD holders should be asking themselves is, given their personal investment timeframes, which strategy is likely to yield the best return. Effectively that is a question of whether you think that the KMD board can define and execute a strategy better than Rod Duke can.
Personally, my money would be of Rod at the moment, and you would have to agree with his assertion that without his offer on the table KMD would not be trading anywhere near $1.80 today. I mean you could say that he has already returned KMD holders more that 25% since he made the offer.;)
(Discl. Long term BGR holder not 100% convinced I want to inherit KMD ownership)
Mate, get on the ANZ securities website and bring up a chart for the last few years of KMD and BGR and ask yourself this honest question.
Who has the runs on the board and has earned respect in the retail sector...anyone can talk, look who's actually delivered the results for shareholders.
KMD make good gear but its been a poorly managed company.
The ask yourself this question. What's going to happen to the KMD SP when Duke's offer has run it's course :eek2:
Final question...would you like more losses to go with your existing ones this year ? If not, back the man that delivers results, not the directors that deliver excuses.
This post can be summed up with the saying "Talk is cheap". Buy proven results, not B.S. promises and talk. The takeover will run its course and Duke will get plenty to add to his current 20% and there will be blood on the floor at head office with massive personnel changes, you mark my words.
Goldman (13%), Kinetic and Watermark Funds have 'publicly' rejected the offer as it stands
They have fallen for the Kathmandu story
Goldmans Chinese Walls working I presume - advisor to KMD as well as well as wealth management side involved (and they were part of the original IPO sell down)
C'mon Rod - make them suffer and wait - they prob only want another 10 cents
If Rod does not offer anymore and the bid fails. I would think the share price would head down again.... could he come again in 6-8 months time and offer even less say $1.75? Do you think in 6-8 months the SP would recover to more than 1.75?
Subtle sometimes is effective, but apparently I'm no good at that...my parents should have shelled-out for private schooling and a Swiss finishing school, bloody misers lol
Blood letting commences. Best bit of hostile take-over entertainment we've had in years. Holders who don't take up Rod's offer are going to get a bath when it expires in my not so humble opinion.
Well its an interesting point in time for a chief operating officer to chose to resign isn't it. Jump before Duke pushes you so it looks better for your career ?
One can only imagine that as this hostile takeover runs it's course Duke will end up with a minimum of 30 something percent, (already has 19.9% in the bag remember after institutional buy-up) so he's going to be in a very strong position to throw his weight around with the board and will no doubt want to use a brand new broom on their tired old floor.
Based on what I heard on RadioNZ today it seems like a stalemate, Rod Duke thinks hes paying fair value and won't budge; large institutional holders feel hes offering a low price and they don't really want to sell.
I do feel Rod Dukes comments have a fair view that 20 million for the financial year is a bit on the low end and KMD's optimistic 40% increase in underlying profit is pretty optimistic given the trend of its shops, but new management and a new direction could be the turn around it needed, who knows. Happy to watch and see how this pans out. I'm not a holder just a bystander with a word to say.
Go Rod
http://www.nzherald.co.nz/business/n...ectid=11494994
Note that GS may change their mind about not accepting 'in best interests of clients'
Deutsche man on radio this morning says fair price ....and mentioned those record margins that have been forecast. Impact of going back to normal margins alone is quite a lot.
Th story also suggested Rod might just dump his shares if the bid failed.
Just got my 140 page target company statement plus 12 page interim report, the large document has Reject Briscoes offer in bold on front cover, gotta love that optimism, will be skim read only methinks.
I wondered whether he has substantial shareholdings. If it were large enough, I personally would consider resigning which would allow me to sell shares without having to disclose to the market, whereas he cannot do this while a director. If he knows he is a goner anyway, then why not sell the shares - something he can't do while a director.
This musing I had in the shower seems a bit far fetched to me, but thought I'd put it out there.
GS
What a waste of money to have all that paper printed. Online version http://www.kathmanduholdings.com/wp-...INAL-05.08.pdf
Believe it of not emveha, I still prefer paper versions of documents as they are way more user friendly and so much easier to browse, make notes on where appropriate and to toss to a mate to "check this bit out". So most of the company/annual accounts research I do is with paper.
GS are slippery aren't they? (checks dictionary definition of slippery....yep, picture of GS there) :-)
Person who wrote that story also needs head read; Rod would surely not be so stupid as to "dump" shares if bid unsuccessful? and blow millions as well possibly affect BRG shares?
I also note that most media commentators missed the fact that when KMD said reject, the shares of BOTH KMD and BRG rose 3-4%.
If Rod really wants KMD he's going to have to up his offer to at least $2 - he can still effect the changes he thinks necessary with 60% holding, just like he would have at BRG.
Rod didn't come down in the last retail shower. He plays hard-ball and sticks to his guns. I reckon he just lets this thing run its course, he doesn't need any more than about 40% to make major changes and he'll get that in a canter. What's the bet he simply extends the offer when it expires in mid Sept with a repeat press statement that it represents fulsome value in this highly challenging environment.
No way there's another counter offer for this fiscally challenged company with pie in the sky dreams about how easy it is to grow their earnings in a tough economy...so no way Rod needs to up his offer. In fact quite the contrary, he may take whatever he gets in the first tranche and let the offer lapse and then watch the SP collapse back down to $1.25 or thereabouts for a while and then come back later with an even lower offer to mop up the rest. That would be what I'd do if I were him.
Agree with that, Roger. Of course, a lot will depend on how Kathmandu, the business, performs over the next couple of trading periods.
Just looked at BGR group 2014 AP. 39M profit on 500M turnover.
KMD is talking 20M profit on 400M turnover.
I would argue it wouldn't take that much to sort it - Rod could do it easily. But then so could someone else. Xavier just might.
Furthermore, BGR is at $2.95. And Rod is pushing for $1.80 on a company that will double his turnover o/n and he expects people to accept him to pay only 61% equivalent for that 100% increase?
Tell him he's dreamin.........
http://www.nzherald.co.nz/business/n...ectid=11497421
Keep at it Rod .....they need fixing big time
If need be you could always ask how his little baking venture went a few years ago
Thanks mate and welcome to the forum. Yes good point and such conditions are quite common but I am sure, (without reading the full offer document) Rod retains the right to waive any conditions he chooses.
I guess much will depend on how well the company trades over the coming months. He probably has the right to extend the offer at least twice, (that's a common feature of these sort of offers), so he might exercise that right and play the long game and just see how KMD trades. I think people holding their breath for an improved offer better have a very strong pair of lungs :)
Any angle you look at this situation this is the best hostile takeover we've had on the NZX for years, complete with thinly veiled insults and all !!
Very condescending from Kirk ....
This wasn't much of a success either ...any others ??
http://www.stuff.co.nz/business/7491...vid-Kirk-quits
David a quiet polite chap and doesn't seem to have too much 'mongrel' in him. Probably his background. Even more credit for what he did as an All Black - after all for a long time he was the only AB captain to hold aloft the World Cup.
Rod a nice bloke as well but he has some mongrel in him. That's what needed to win in retail.
I like mongrel...a few people have even implied that's a fit and apt description for me lately, lol
Mongrels are gritty and determined types and while its never pretty they're the ones that get the business done.
Gonna lob a grenade here and bet my Kathmandu thermal undies that Rod's gonna have to a) extend or b) up his offer.
BGR now at $2.80 which would make an instant 3% loss for any takers. KMD is actually making money albeit not as much as it should.
Messr Kirk is well connected via his independent directorships on KMD and Forsyth Barr and will be working for best outcome.
Rod will get nastier (which is awesome) but I can't see it working at the moment.
The timing of the full year too will be influential given how skittery the market is at the moment.
My 2c anyway.
I was thinking $1.25. I'd like to have a bob or two on Rod telling all KMD shareholders to get stuffed and let his offer lapse. He's clearly unimpressed with the independent valuation and is calling B.S. on that score and I don't blame him. Consumer confidence survey out today and its at a three year low. Very tough retail environment for KMD directors to hit their blue sky targets for FY16...dreamers ?
Don't think so, if the offer falls over and they tank to $1.40 then Rod loses $16M and he won't want to be selling one would think. Who'll be pleading then? Its clear that Rod is walking a fine line here - good luck to him and I like it a lot, but he doesn't need the lot to run the company. He can spend the same amount and get 60% (ie. 7/9 + 0.25 p.s.) and make it work. Hopefully sense like that prevails.
Roger your not tuned into the right circle, I hear sales have been very robust both here and in Aussie this winter, just need another good one next year aye, retail may be tough but snow/mountain and outdoors lovers have loose purse strings.
Wonder what Rod will come up with this week
Best quips so far
“…to be brutally honest I’m not sure that Dave is enough of an expert to make any comment at all.”
“Kathmandu’s board is asking shareholders to take a huge leap of faith in trusting them, with an untested management, to remedy a number of key issues and to drive the forecast 40 percent lift in earnings.”
Bold my doing
You can tell this written by a PR person, plenty of nice warm fuzzy buzz words. Probably double Dutch to the biggest shareholder - if he gets the gist I'm sure that big shareholder could have said it in less words and more succinctly as well.
Good stuff couts et al ....Xavier doing the stuff for you, I think it means this will result in more profit
KATHMANDU HOLDINGS LIMITED
ASX/NZX/MEDIA ANNOUNCEMENT
26 August 2015
Kathmandu Announces Structural Review
Kathmandu Holdings (ASX/NZX: KMD) today announced an immediate review of its Head Office structure.
The company will closely review costs and structures in recognition of a significant reduction in profitability in FY2015, compared to FY2014 and previous years.
Kathmandu expects the review may result in reduction of up to ten per cent of employees in its Australian and New Zealand Head Offices.
Kathmandu’s Chief Executive Xavier Simonet said the company was taking decisive action to address the recent underperformance in sales and profit and was looking at all areas of the business.
“I am confident the outcome of the review will enable us to continue to invest in our growth strategies and deliver improved results for our shareholders, “Mr Simonet said.
The company has already identified a number of key areas to improve performance, including:
• Increased efficiencies with cost reductions in all areas of the business
• Increased focus on innovative and distinctive products
• The optimisation of the existing store network
• The activation of Summit Club members
• Improved digital and social media communication, and omni-channel trading functionality
• Leveraging the capabilities of new systems and infrastructure
• The identification of international opportunities through a capital-light model and leveraging of the online platform
Mr Simonet said by focusing on these areas the future potential of the Kathmandu brand could be realised.
The review will be completed by the end of September.
Please direct media enquiries to:
Helen McCombie at Citadel
+ 61 2 9290 3073
Wow a whopping 10% reduction in head office costs...yeah that'll make all the difference lol...Rod will be thinking its not too early for a couple of Tui's.
Yeah lots of buzz words...some of them meaningless. I especially like The activation of Summit club members. What's the bet you get absolutely bombarded with marketing e.mails so often its almost harassment already ? would I be right W69 ?
It was Price Sensitive as well
No wonder NSX reviewing what constitutes a price sensitive announcement
I particularly like the "capital-light model" phrase. Havn't heard that one since Feltex went under - or was it Fortex?
;)
Gee, KMD up 10% today
Surely not on Helen's words I thought
No the share price had already gone up ...in Aust share price went down after the announcement
Wonder if Rod has worked out what it means yet, I have offered my services to him.
Sorry w69, I think he already has when he said in the Herald back in early August:
"We believe that Kathmandu is a great brand and has good products, but by its own admission is failing to execute basic retailing fundamentals.
"Nothing in Kathmandu's Target Company Statement provides confidence that management is able to deliver a turnaround and achieve its lofty earnings forecasts."
"By Kathmandu's own admission in the target company statement, its key failings relate to the fundamentals of retailing, including confusing pricing decisions and repetition of non-innovative promotional activities over key promotional periods in FY15, poor inventory management and operating cost overruns.
"It is these key pillars of effective retailing which are Briscoe Group's strengths and a key contributor to its strong performance over a number of years."
Gee this thread looks like its heading down the Peb route, full of knockers/downrampers and non holders, another waste of space coming.
C'mon now couta - I am an interested party in all this
Even you would have to say that was a stunning announcement and worthy of discussion
Good that jmsnz did the right things and asked for a translation in a new thread. That might have been a waste of space on this thread (but worthy of its own for educational purposes)
Couta1,
I assume that was aimed at my posting. I don't really know what the 'Peb Route' means. I am not a holder in KMD and never have been because I have always translated their pricing model as 'don't buy today, it will be cheaper tomorrow'. I am however a holder in BGR and therefore very interested in KMD and what its shareholders views are, given the recent events.
Regardless, in terms of the elegant and concise use of the English language, that KMD announcement was dreadful.
In the absence of any SSH notices I assume hardly anybody has sent the forms back (accepted the offer)
Rod, they are rejecting you. Come next week you need to stir things up a bit
Indeed, Rod needs to front up now. There is limited chance KMD will initiate of their own accord. He can always extend but then he runs the risk of the sp getting away on him.
Mind you, given his sneak offer he could announce soon he has the instos sorted and could you get out of that chair please Dave......
No not aimed at you specifically, more a general comment highlighting the fact that most of the posts on this thread are now from the type of people mentioned in my above post as the holders have all said pretty much all they have to say and believe the company will come right under its own steam without the help of Mr Duke. The Peb route is simply when most/all the valuable contributers stop posting and the thread basically becomes a Trolling outlet full of negativity.
I'm not a KMD shareholder either but I do have a decent stake in Briscoes and therefore more than mildly interested in this takeover offer and the way it plays out. I suppose that makes me a troll by some definitions!
I'm sure there will be plenty to comment on as this situation develops. I guess we'll just have to wear the "Kathmandu troll" label!
;)
No macduffy your posts are definately Not in the T category, its all about attitude and motives at the end of the day:cool:
Yes, feeling much better now, winner!
I can see this bid fizzling out. BGR will be left with a 20% stake and will have some influence in the KMD business. If there's no significant improvement there, the bid will be renewed at the appropriate time, probably on slightly different terms, and KMD shareholders may see the merits in going the Briscoes way. Or may not.
The words restructure = game changer.
Although one would expect these types of actions with a new CEO, the fact that a cost saving exercise is underway means that growth is off the cards. Two ways to create value 1) operational efficiency 2) revenue growth. I had previously looked at this stock as something close to $2 but now think it is more like $1.6. Their EBIT is not close to what it was and I can't see them increases this anytime soon. Still think $1.8 is a low ball offer for a well known brand and solid product offering if you take into account the ownership premium. Nevertheless, it is going to be a hard task to restructure are retail business like KMD, it is not like a finance or services company where distribution networks, store networks and decentralised staff numbers do not exist.
What puzzles me is their store positioning. In Melbourne they have a store just off swanson street and another one just around the corner. This is the same in other cities also. While this is obviously good in terms of cost efficiency with your distribution network it has made me think that KMD has fallen prey to IPO hype and store numbers leading executive decisions without strategic thoughts.
Might by back in if this stock falls low again, but sold out this morning at $1.7. Not going to play the takeover speculation game.
Note KMD is out of ASX 200, with S&P index rebalancing...
Kathmandu shareholders rejecting Briscoes' offer. No surprises there but meanwhile BGR posts another record profit.
http://www.nzherald.co.nz/business/n...ectid=11512816
And now that the takeover is certain not to succeed KMD SP is heading south @ a quick rate of knots...what a surprise (NOT). Hard to believe people didn't see through KMD directors optimistic "talk" Talking their position up to protect their position at the trough ? You be the judge.
Does anybody know since the total take over may not going to take place and to those already sent in their acceptance form to Briscoe... Is that mean Duke have bought the shares from those sellers? Thanks.
Clauses in the agreement mean any acceptance by shareholders is not binding on Duke unless he gets to the magic 90% to enable compulsory acquisition of the rest. Acceptances by shareholders normally once signed cannot be revoked.
It is possible Briscoe's may waive the 90% condition, their option, unfortunately not yours. I suspect those who have signed acceptances are going to be disappointed and when their shares are available to them to sell they may express their disgust by doing exactly that. I suspect the smart money got out when the SP was close to $1.80 as it has been pretty clear for a while the economy is cooling off and it would appear pretty obvious to everyone other than the directors of KMD that they'll really struggle to lift profitability by 50% in the prevailing economic conditions. My crystal ball says Rod Duke get's this company cheaper next year or 2017 after the directors get all sorts of egg over their faces in terms of non delivery of the promised recovery.
I could be wrong but I think the offer is contingent on a successful bid. He could lower the bid to a minimum 50% but he cant go for a % between 20% and 50%. Happy to be corrected. I am sure it would be set out in the offer doc somewhere.
Insto's normally leave it to the last minute but quite a few (ozzie ones) have come out and rejected it so it might be a mathematical impossibility.
Edit: Roger - is my statement correct. I also dont think he is allow to creep up above 20%. The creep provisions (5% per year) only apply above 50%??? So he would be required to do another full blown takeover.