Indicative, Non-binding proposal. Offer price is $11.75. Owns 14.9% already through derivatives contracts.
Subject to due diligence, exclusivity and approval by ADM board.
Currently trading at $12.41.
5.61% above the terms.
No touching this one yet.
Monday, October 22, 2012
Friday, October 5, 2012
Billabong takeover...revisited
So the saga continues..Billabong was forced to announced that the potential acquirer, TPG, had "concerns" about its A$694 million bid. These "concerns" were not elaborated by Billabong.
Lets have a short recap here to keep the facts fresh in mind. Earlier this year in February, Billabong rejected an offer of A$3.00 a share from TPG. Billabong then proceeded to negotiate the sale of its Nixon brand to Trilantic Capital Partners. Not put off, TPG came back with the same offer of A$3.00 which was later raised to $3.30. The company still fought off the takeover with founder and major shareholder, Gordon Merchant stating they would not consider a bid less than $4.
Share prices continue to drop and hit below A$2.00 in June. The company then decided to increased its issued capital by 86%, issuing shares at a heavy discount to raise A$225 million to pay debt. The placement was done at A$1.02 and the take up was only 79%.
In July, TPG again made a bid for Billabong at the share price of A$1.45. There was another unconfirmed party that showed their interest in bidding for Billabong as well, rumoured to be Bain Capital. They have walked away from the deal last month.
Share price for Billabong is now, A$1.06
If we calculate the returns using MA Manager,
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We would get fantastic returns with very low risk, however we must keep in mind that the performance for Billabong has been deteriorating with the most recent a reported loss of A$246 million. This is the first loss since its listing in 2000. So it would be prudent to assume that Billabong's share price would take another huge dip if TPG walks away.
I would think that TPG would not want to walk away given the time and effort they have put into this. Someone must love this brand from within TPG, else it would not have made sense to me. However, I believe TPG will try to negotiate a lower price for the takeover circa -20-25%% of current takeover prices.
I will be taking a position in this.
Lets have a short recap here to keep the facts fresh in mind. Earlier this year in February, Billabong rejected an offer of A$3.00 a share from TPG. Billabong then proceeded to negotiate the sale of its Nixon brand to Trilantic Capital Partners. Not put off, TPG came back with the same offer of A$3.00 which was later raised to $3.30. The company still fought off the takeover with founder and major shareholder, Gordon Merchant stating they would not consider a bid less than $4.
Share prices continue to drop and hit below A$2.00 in June. The company then decided to increased its issued capital by 86%, issuing shares at a heavy discount to raise A$225 million to pay debt. The placement was done at A$1.02 and the take up was only 79%.
.PNG)
.PNG)
We would get fantastic returns with very low risk, however we must keep in mind that the performance for Billabong has been deteriorating with the most recent a reported loss of A$246 million. This is the first loss since its listing in 2000. So it would be prudent to assume that Billabong's share price would take another huge dip if TPG walks away.
I would think that TPG would not want to walk away given the time and effort they have put into this. Someone must love this brand from within TPG, else it would not have made sense to me. However, I believe TPG will try to negotiate a lower price for the takeover circa -20-25%% of current takeover prices.
I will be taking a position in this.
Thursday, September 27, 2012
F&N shareholders : Latest statement by Mr Charoen
Mr Charoen declared that him and his entities, will vote against the capital reduction scheme proposed.
This will leave shareholders in the company at the whim of Mr Charoen, if he successfully get his 50%.
His actions will likely aggravate Kirin and other shareholders and potentially open up the board members to other proposal ie from Coca cola. However, as time passes, the chances of a suitor/bidder emerging seems to diminish. Unless of course the board actively looks out for a white knight.
Again I must say, the board have been punched left right and centre. Its high time they become more proactive and help safekeep the interest of the minority shareholders.
This will leave shareholders in the company at the whim of Mr Charoen, if he successfully get his 50%.
His actions will likely aggravate Kirin and other shareholders and potentially open up the board members to other proposal ie from Coca cola. However, as time passes, the chances of a suitor/bidder emerging seems to diminish. Unless of course the board actively looks out for a white knight.
Again I must say, the board have been punched left right and centre. Its high time they become more proactive and help safekeep the interest of the minority shareholders.
Saturday, September 22, 2012
Charoen bids for Fraser and Neave F&N
So Mr Charoen finally shows his hands. For weeks now he has held his cards close to his chest and the final outcome was a bid for F&N at $8.88, pulling in Heineken to not make a counter offer for F&N.
The question now will be, will there be any other surprise bidder for F&N minus APB?
To me it seems like, Heineken has gotten what it wanted and is happy with it. Mr Charoen seems to be getting the game to go his way. But I wonder how will the board of Directors at F&N feel. They must feel like a silly bunch going round and round and not knowing what is happening. If Mr Charoen does get his hands on F&N, it will be a very good deal. If you strip out the crown jewel APB, the rest of the assets are at a discount of roughly 30%. To me, Kirin would seem a natural buyer if they can expand their balance sheet.
Right now, Mr Charoen through his affiliated entities are holding slightly more than 30% of F&N's shares. The only other shareholder with a large enough stake is Kirin with 14.7%. Mr Charoen has made his mandatory takeover offer just conditional upon 50% of acceptance including the stake they already have. So this translates to roughly just another 20% acceptance. Not much risk there.
At this stage given the time constrain, it would be highly likely that Mr Charoen gets what he wants. Now the one yet to show their hand are Kirin.
Finally, another point worth mentioning is that if APB is sold to Heineken, Mr Charoen would be definitely pushing for the cash to remain in F&N instead of a distribution back to shareholders. This would give him more cash to play with as he eyes potential takeovers and expansion plans.
The question now will be, will there be any other surprise bidder for F&N minus APB?
To me it seems like, Heineken has gotten what it wanted and is happy with it. Mr Charoen seems to be getting the game to go his way. But I wonder how will the board of Directors at F&N feel. They must feel like a silly bunch going round and round and not knowing what is happening. If Mr Charoen does get his hands on F&N, it will be a very good deal. If you strip out the crown jewel APB, the rest of the assets are at a discount of roughly 30%. To me, Kirin would seem a natural buyer if they can expand their balance sheet.
Right now, Mr Charoen through his affiliated entities are holding slightly more than 30% of F&N's shares. The only other shareholder with a large enough stake is Kirin with 14.7%. Mr Charoen has made his mandatory takeover offer just conditional upon 50% of acceptance including the stake they already have. So this translates to roughly just another 20% acceptance. Not much risk there.
At this stage given the time constrain, it would be highly likely that Mr Charoen gets what he wants. Now the one yet to show their hand are Kirin.
Finally, another point worth mentioning is that if APB is sold to Heineken, Mr Charoen would be definitely pushing for the cash to remain in F&N instead of a distribution back to shareholders. This would give him more cash to play with as he eyes potential takeovers and expansion plans.
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