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Absolutely!
As a Shareholder looking to the long term, I would rather stick with the prospect of an imminent recovery, than being mugged off by Private Equity's latest rendition of a Sale and Leaseback deal. Very rarely do they end well.
VC Groups are looking for value. The price they wish to pay has to fit their investment criteria. VC's rarely keep businesses intact as they see greater value in a break-up.
Here's a scenario, Marstons sell it's property portfolio and retain it's 40% ownership of CMBC. So in name only Marstons would continue. May sound a bit OTT, but cannot see Carlsberg being happy having just completed the JV, unless of course they are in the background!
Whatever as Trustees of Shareholder's interests the BOD have a duty to inform of any offer, which they will either recommend or otherwise to Stockholders.
Good points HarryCaul.
I think the question is 'What can Private Equity offer, that the current BOD cannot'?
The recovery in Business will happen, I suspect sooner rather than later. That recovery will be spectacular. Not just in Hospitality, but across the board.
Pubs, Restaurants will be rammed, and people will have money to spend.
You want a Holiday when we get the all-clear? Can you imagine the scrummage at the major Airports?
So, given that the 'pent up demand' will arrive at some point, the Private Equity crew will in my eyes at least have to pay up to be part of it.
Private Equity though would need to pay the right price, so this will be one hell of an exercise in pricing a Business with minimal sales at this point in time, while being attractive enough to shareholders to jump ship early.
Liberum has downgraded Marston’s to ‘hold’ after takeover speculation pushed the share price higher.
The brewer and pub company is currently considering an unsolicited approach from US private equity firm Platinum Equity Advisors. No further details have been announced by Marston’s, although in accordance with the Takeover Code, Platinum must make a firm offer or walk away by 26 February.
Anna Barnfather, analyst at Liberum, said: "Marston’s shares have risen up to its current pro forma net asset value following confirmation of a bid approach. No firm offer has been made, and hence no specific details have been provided while the board evaluates the proposal.
"Based on a pre-Covid trailing earnings before interest, tax, depreciation and amortisation of around £180m, current NAV of 87p and recent transaction comparatives, we believe an offer could come in at above 100p.
"However, this is dependent on many factors. We move our recommendation to ‘hold’, giving the upside risk balance with uncertainty over whether a final offer can be agreed."
Liberum, which previously had a ‘buy’ rating on the stock, has a target price of 90.0p. As at 0930 GMT, shares in Marston’s were flat at 82.25p.
Peaks - I don’t disagree with your point that a lowish offer that Is above current sp but is rejected by the board might still leave the sp where it is currently or it could even raise it as people speculate about how high platinum would be prepared to go.
But taking into account fairdealers very valid points about this all merely being speculation at the Moment and platinums shrewdness if the board tell them where to go and they were to show an interest in m&b instead then I would expect the sp to drop back to where it was pre offer.
I guess the point I was making when I said perhaps the first indication might be a significant move in the sp was more to do with the fact that invariably things have a tendency to leak out and be reflected in the share price, as they appear to have done on Friday, prior to comms being released.
At the moment it is speculation what if any a Bid will be. Platinum are cagey customers and know all the tactics to reel in shareholders. They could be testing the water, they are unlikely to make a formal offer until numbers stack up for them. Do not be under any illusion a VC group are not looking at the health and welfare of target Shareholders.
It is no secret the whole hospitality sector has low income and the future is unclear. This makes many companys vulnerable to a predator. Marstons now are basically a Hospitality Company who have a 40% share in a brewery Company. Shareholder should not forget this as CMBC is a separate Company. Carlsberg is the senior partner and food for thought that informal talks have taken place with Platinum??
Platiinum are only interested in assets that can produce a profit.
Pmoran, you say the first indication will be a jump or a slide in SP but in terms of downside: if the offer is higher than current SP but rejected then that is also positive/nuetral as it implies that the company is undervalued at present. Another thing to take into account is that we are only just above the recent high pre-takeover news anyway.
@Pmoran. Yes, that sounds like an accurate assessment of the state of play. it's still early doors and a more detailed assessment of the detail is required, and of course, the numbers which will of course take time. Sit back and wait for updates to see what transpires and make our decisions from there would be my strategy.
Thank you Pmoran1969, that's what I thought only the way some were reacting I thought I had missed the price offered.
Nothing is for certain in this game.
Unsolicited offer made to the board who are reviewing it. It seems that the market got wind (don’t they always) so on Friday as speculative share purchases pushed up the share price the board issued an rns confirming that an approach had been made.
No mention of price from the board. No speculation as to the price in U.K. or US press over the weekend and no further rns from the board this morning prior to market open. So what the offer is and what the likely reaction will be is pure guesswork at the moment.
I’m not sure what to make of that. Could it be the offer made was on the lowish side so the board are formulating an outright no response? Maybe the offer is sufficient to prick the ears of shareholders but, in the opinion of the board, doesn’t take enough account of our future value? Or perhaps the offer is generous enough for the board to recommend it to shareholders but they need a day or two to pop over to Copenhagen and work out how such an offer would work with our new partners?
So now we wait and see and perhaps the first indication we will get that anything is about to happen will be a jump or slide in the sp.
Have I missed something here because I haven't as yet seen a takeover price unless I am going blind, anyone please ?
Or is this going to be another AA deal and offer say 75p.
is 60 this month(Jamuary) could it be a handsome Pension??
I know that with whatever share you own, everyone sees something like this on the cards from time to time, regardless of how remote the possibility.
Opportunistic perhaps, or a genuine offer with some kind of game plan?
I know that with whatever share you own, everyone sees something like this on the cards from time to time, regardless of how remote the possibility.
Opportunistic perhaps, or a genuine offer with some kind of game plan?
London any holder of more than 1% can and do make a declaration when a bid is in process.
AS already stated there will be other Shareholders, above 1%. Expect further declarations, over coming days. It is quite normal and nothing to do with a New holding.
Thanks for the insight.
In that case, LSV might not be a new position given the holding is less than 3%.
We only know that 5% of the total share capital were bought and sold on Friday.
@ Barchid.
Yes, I've always tried to be reasonable. I don't see any point in being rude or @rsey. you achieve nothing, other than getting up people's noses with that. All of my previous thoughts on here were just my opinions, based on what information I had available to me at that time.
As for the chap from PAS, well, he did seem to fade into the background fairly quickly didn't he.
I'm still of the opinion with him that he was fishing for something. what that, and his motives were still remain to be discovered. That said, I neither know or care of he achieved his goal(s).
All the best to you.
Parsley2. Something might well be brewing but the NFU position is not a new position taken out as a result of the possible take over they are merely reporting what shares they already have.
As I understand it anyone with more than 1% of the shares in a business need to declare their holdings when a company is subject to a possible takeover stating what their position is at the time of the initial offer so we should expect to see a number of these declarations over the next few days.
Barchid, thanks, the deal is not yet done.
It is puzzling to see a VC group making a bid, they usually look for value in assets and break-up ( asset strippers), US Funds are known for it. The puzzle being Carlsberg's agreement requires Marstons retain 50% of their Pubs, is Platinum aware ( they must be) or do they have other ambitions for Marstons Pubs which will fit the JV agreement, unless they (Platinum) know of some weakness within the agreement.
Platinum could be a "Stalking-Horse".
Whether my mascinations have any validity remains to be seen.
We are going to be here for a while yet. The first bid is rarely the last.
fairdealer
If a bid does emerge and goes through I will miss your knowledge of the industry when this board closes when the quote has gone. I suspect though, that Platinum have weighed up the chances of success by "going early" and have very possibly made a few of the bigger holders "insiders" already to assess their likely support or not, that is the most common way leaks like this appears to have been emerge.
My guess is the II's will do a dash for the cash largely due to the debt/valution issues you point out, would be very surprised if this were to be contested, for those same reasons.
Trent
Your response was spot on, the many times you have been on this board you have always been both courteous & accurate, as an aside I wonder what that old cove at the Pubs Advisory Service will be thinking with his underfilled barrels ?!
Fairdealer - thanks for clarifying. So book valuations are historic.
Beer Stalker, read the notes attached to annual report. It is correct an Official ( RICS ) valuation is required Bi-ennially, an Official valuation was due in 2020 however rules were relaxed because of COVID
This is a very well run company with a great future and if the management are considering their proposed offer it must be a decent one . They have only just recently sealed the deal with Carlsberg which was a fabulous deal , if the price wasn’t substantial they would have just dismissed it. I feel their statement was to let the world know they might be interested in selling at the right price, this has only just started and should be an interesting few weeks .
Hi Fair,
Agreed, I don't know the fair value of the brewery properties, however I also excluded cash which should also be deducted from debt.
Under IAS 40, you are not required to independently value the properties each year, however I appreciate your point of Director valuation bias but the auditors signed off the accounts which is particularly tough in this uncertain environment.
Further evidence of upside can also be gained by the near 5% share purchases by two big players as evidenced by the recent RNS'.
I can only state how I see it and I could be completely wrong.
Thanks