marktime1231
10 Apr 2017
Re: Since it is national flutter day ... I did wonder how the share issue would work.If they are not available on the market or even to existing DX shareholders then that doesn't help set the new price. Of course once issued they can be traded, Menzies might want to offload a chunk to corporate investors if it needs the cash to develop its business in the new direction.
sapito
09 Apr 2017
Re: Gatemore latest From TD Direct Investing:Gatemore Waits But Opposes Proposed DX Group-John Menzies Deal[Gatemore] said although it has withdrawn its requisition for a general meeting, it is against the proposed transaction between DX Group and John Menzies.“The untimely announcement of discussions between DX and John Menzies has fostered confusion over the purpose of the EGM. Our EGM proposals were brought to address the urgent need for effective leadership and to improve the governance standards of a suboptimal board structure. Our proposals were not designed to act as a referendum on an ill-conceived transaction that has been negotiated from a position of weakness,” said [Gatemore]“We oppose the proposed transaction between DX and Menzies as it stands, for reasons we explain below. Furthermore, we believe that together with a group of like-minded shareholders we have sufficient votes to block a deal,” [Gatemore] added.[Gatemore] said there is a mixed mood among DX Group shareholders at present – some that have “reached the point of fatigue” looking for an exit, those that believe the current deal is “unattractive” with a view of installing new leadership as soon as possible, and those in the “middle ground” that think the current deal is “suboptimal” but that the existing process should result either in new bidders coming to the table or the negotiation of more attractive terms with Menzies.“Nonetheless, in the spirit of collaboration, we want to give room for the ‘middle ground’ view to be tested. If a substantially better deal does not emerge, we believe the current one will be blocked, at which point shareholders will coalesce around changing the board. We have built our position in DX with a long-term view and are willing to be patient to achieve full value,” [Gatemore] said.The shareholder went on to say the proposed deal with John Menzies “has only exacerbated the mistrust”, criticising the fact DX Group has announced a deal without securing any definitive agreement, leading to its shares being suspended until the deal collapses or a firm one is signed.“No binding agreement has been entered into, and the announcement implies an admission document may be months away. All the while DX shareholders are unnecessarily tied down,” said the shareholder.[Gatemore] has engaged AlixPartners to provide third-party support to its assessment on the proposed deal. The shareholder also said the four directors it has proposed to be appointed to DX Group were all independent – stating it would be “undeniable that they would constitute one of the strongest boards in the UK transport sector.”“We believe DX has substantial unrealised value, with a strong brand and leading positions in document exchange, secure delivery and IDW freight. As such, we are naturally cautious about a transaction which adds a significant amount of debt and dilutes shareholders by 80%. We are also cognisant that any merits of the proposed transaction with Menzies rely on achieving meaningful operating synergies which have all too often been elusive in this sector,” the shareholder said.DX Group shares remain suspended, while John Menzies shares closed down 1.4% on Friday at 668.50 pence.---------- ---------- ---------- ---So it's not just the weather that's hotting up! If pressure from Gatemore brings about an improved offer, great; I just hope at the end of the day there IS a deal.
sapito
09 Apr 2017
Gatemore latest From Scottish Herald today:"....while Gatemore is still opposed to the proposed transaction “nonetheless, in the spirit of collaboration” it does not want to stand in the way either of new bidders entering the fray or John Menzies improving its offer."DX’s board said it plans to continue to pursue the John Menzies deal, which is scheduled to close in June".So as early as June, not July.
sapito
08 Apr 2017
Re: Since it is national flutter day ... I'm going to say 33p, but I don't think there'll be an offer price as such, because there won't be for example a public subscription, just the issue of 800m new DX shares to Menzies holders in exchange for the transfer of the goodwill of the Distribution Division business (the tangible assets having been transferred at book value). So on the first day of trading in the new shares, I'm guessing that they'll open at 33p. But in anticipation of that opening price, logically the existing DX shares will also have been trading at around 33p in the days leading up to it.Of course, a lot could happen between now and July, including WWIII.....
marktime1231
08 Apr 2017
Since it is national flutter day ... I wonder what everyone thinks will be the offer price on the new shares in a combined DX-Menzies distribution business. Looking at the outline proposal there will be 800 million new shares issued in maybe July this year - at what price though?Somewhere between 20p and 60p is my broad guess, but I think sufficiently discounted from nominal value to ensure market interest. Put me down for 30p.
sapito
07 Apr 2017
Re: RNS today Gatemore have some explaining to do having backed down just 7 days after their hypercritical knee-jerk reaction to the merger news. I'm not holding my breath though.Anyway looks good for DX, but we may have a long wait for further news.......
marktime1231
07 Apr 2017
Re: RNS today Maybe Gatemore didn't have a plan and are content that it has flushed Menzies out in the open. No point in the EGM if Fidelity being in favour trumps Gatemore against.We will just have to sit tight for the proposal details. Meanwhile the shares will be suspended for a month or two? So that prevents Gatemore or anyone else from buying in with a new plan. And stops us from trading our shares, or not, on the merits or otherwise of what has been outlined.The trick of a reverse takeover seems to be just that.
nk1999
07 Apr 2017
RNS today My interpretation in summary:- Gatemore withdraws AGM requisition- John Menzies discussion continuing- Shares to remain suspended till the conclusion of discussion - either documents published or discussion terminated.Please see RNS for full details.nk
sapito
05 Apr 2017
Re: What Fidelity thinks... I don't think £50m operating profit on £1.5bn turnover is that wide of the mark, given the £10m pa synergies. Interest cost on debt - as increased by £60m - and pension costs should not take too big a bite out of that.But we're all in this together, so why can't we have the best of both worlds, ie do the deal, AND benefit somehow from Gatemore's ideas - whatever they are - for the (enlarged) business? It would be nice if Gatemore could work together with both DX (minus Cvetkovic it seems) and Menzies, therefore, in a spirit of cooperation to thrash out the best way forward. Or is that fanciful?
TX2
05 Apr 2017
Re: What Fidelity thinks... £50m earnings....in your dreams if you mean net profit after tax!I think this means the EBITDA figures on a good day,that means earnings before inconvenient truths like interest,tax,depreciation,amortisation not to speak of exceptional costs,pension contributions,the deal is bringing with it an under funded pension plan.I don't think the Menzies distribution business is in any way badly run but its problem is that its core business is the distribution of Newspapers & Magazines to Newsagents plus things like Travel brochures to high street agents,this is a business in gradual decline.Menzies is the smaller of two businesses now left in this field,the other being Connect(previously known as Smiths News-once years ago part of W H Smiths).This is why Menzies would like to off load the business,its aviation related business is the one with prospects.If the merger happens I think DX shareholders would be in a better place than presently,not difficult, but not in my opinion at greatly higher than present price because the resultant business would only be at best worth around nine to ten times net after tax earnings proved it could pay the bulk out as dividend.
marktime1231
05 Apr 2017
Re: What Fidelity thinks... I would be surprised if Gatemore did not already have a plan in mind for what it wants to happen to DX, and I would like to hear it before trying to judge whether the complicated Menzies deal is better value. I agree the Gatemore statement was rather wild, it would be more helpful to hear what they have in mind for the business before rubbishing other plans.It would be useful to study the Fidelity comments to understand what they find appealing. A combined business generating £50M earnings on trade of £1.3Bn is the prognosis - does that restores the DX share price back up to the levels where Fidelity bought in? Or get us to 20p or 40p compared to the 10p today?At the moment of course it is impossible to judge whether the market likes either idea, because the shares are suspended "temporarily". The longer shares are suspended the more I will suspect that the Menzies plan was hurriedly announced.
sapito
02 Apr 2017
Re: What Fidelity thinks... I didn't intend to include any buy/sell opinion in my posting - I don't know how that happened.
sapito
02 Apr 2017
What Fidelity thinks... According to Saturday's Times, Fidelity is in favour of the Menzies deal. They hold around 10% of DX, against Gatemore's 11%, so there could be an interesting battle ahead, but Fidelity can at least count on my 0.1% for what it's worth! Before the announcement of the deal, I welcomed Gatemore's intervention. However, I wasn't impressed with their rather intemperate press release last Friday, pouring cold water as it did on the deal without giving any real justification. They've had the rug pulled from under their feet, and they don't like it.However, the deal does give Gatemore the change of management they were pushing for, albeit not with their own nominees, and creates a much more viable business going forward. The synergetic benefit of c£10m pa itself is worth perhaps £100m to the combined business, and cannot be ignored. I don't think it was any coincidence that Menzies' shareholders' proposed 80% share of this benefit more or less matched the jump in the Menzies share price on Friday. I don't think that jump was because the deal was perceived as loaded in favour of Menzies: for example, the 80:20 split almost exactly matches the £1.2bn:£300m turnover split - and therefore profit-earning potential - between the two businesses. It is precisely this recognition of the worth of DX's revenue - despite its currently yielding zilch in terms of operating profit - that makes it a good deal for DX, and which should propel the shares back to above 20p in the short term - fingers crossed!Maybe Gatemore should just gracefully back off now and come back, say, 18 months following completion of the merger if things still need shaking up...
TX2
31 Mar 2017
Re: What Gatemore thinks ... I suspect John Menzies want to dump their distribution division & part of their pension liabilities what I don't understand is who will be mad enough to lend the new outfit another £40 or whatever particularly when DX is loss making & has negative tangible assets .......Two mongrels won't make a pedigree!I hope your conclusions are correct however for the sake of the unfortunate shareholders here.
sapito
31 Mar 2017
Re: What Gatemore thinks ... Looks like Gatemore need more than 20-30pps to make them happy. Presumably they bought in at much higher levels.
