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I thought this could be 5x or 10x over the years. Now it is sell out .... groan. I bought at 300p so I am not out of pocket but it seems a shame when such a great business can't survive.
I had a modest target on it but that isn't going to get hit.
All eyes on GXO this afternoon I think..
Not impressed with the offer. Only the same overall value 901p as last summer. We lose UK registered shares in exchange for some USA shares and current price in cash. Rather humdrum offer for a fast growing, profitable, low debt, dividend paying UK business.
M&A going to be the buzzword of the year!1 Lots of companies will get snapped up for cheap as chips . Like you said shame to lose another great UK company
I too am unimpressed by the offer (920p in total). The cash offer part is based on the average sp over the past 3 months, which conveniently for GXO, has been somewhat depressed after the highs of last year. The Clipper board may be enthusiastic, but they will need the agreement of IIs, who may not see the offer as good enough. In my view, anything less than £10 is unacceptable, given that the sp could probably hit that price within 2 years and perhaps £25 in 5 years. The only silver lining is that the GXO share offer means holders will still have some exposure to Clipper's future growth prospects.
Rogue, I agree although sutelyba depressed GXO SP is better for CLG golders as effectively they will recieve more GXO shares. Anyway, that aside it does seem that this is going cheap - of course the BoD will support and recommend this bid - they will continue in their positions with possibly a few sweetners to encourage them to recommend and come on board. II's may be a different kettle of fish who may not play ball and hold out for a better offer from the Yanks or some other entity.
Cebo. Fair point. Assuming this goes through, I will be holding onto the GXO share allocation and may even apply for a few extra (which the RNS suggests will be possible under the offer). We are certainly in a very different place to a couple of years ago, when I was cursing the underwhelming performance of the Clipper sp (which then dipped even more sharply in the Covid crash). I won't be ecstatic if the deal goes through, but nor will I be too disappointed, having more than doubled my money.
Guys,
I may be wrong but I read the exchange mechanism differently.
I read it as here was the way we (CLG) got to 920, but f the exchange rate or GXO share price drops then so does the offer total, as they quoted the 901 figure as an example? So a dropping GXO price is not good.
As I say perhaps I have got that wrong?
Roguemale1, I believe that you are quite right, as the SP of GXO drops, so does the value of the offer. Who know what the share price of GXO will be when the deal is signed? There is also the added disadvantage of paying tax on American dividends? Therefore this offer is taking CLG on the cheap, and the price is very uncertain.
I read it different
"The possible offer would be at 690p in cash plus 230p of new GXO stock for each Clipper share. "
To me for each clipper share you will be given £2.30 worth of GXO shares.
So until the offer is formalised the movement in GXO share price makes no difference. In fact you want it to tank so you get more.
Once they say £2.30 of GXO shares at $X per share you can then worry about if stick goes down you are being overcharged but that is the risk you take in such cash plus share acquisitions, lest you sell out now
agree Oracle, the value of the GXO shares under the offer is fixed, the number of shares adjusts to fit that (which is why a value is stated in the rns, rather than a number of shares).
Think you guys are wrong. The offer is for 0.034x (cant remember x number) of GXO shares per Clipper share. So ill get 9.4 shares of GXO regardless of the current GXO SP... More concerned who gets the .4 though seems a little unfair!!!
All gone very Qt !