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@ hurtsparrow.
In one breath IDS are saying accept the offer, and in the next (according to The Guardian) they are denouncing the offer.
Am i missing something here?
I wonder if IDS now think that 360p is too low.
I cannot wait to see the market reaction on Tuesday:
1 - To the results
2 - To The Guardian piece
It is all very bullish in the wording and they clearly have a lot going on. Daventry cleared almost a 1m parcels in one 21 hour shift. If they were to replicate that across a whole year (admittedly unlikely) that might be processing some 30% of RM domestic parcels.
One point that does not come out is letters. Letter volumes have declined 9% for the whole year.. It was 8% for the nine months to 31 December 2023 at Q3 (was 8% I think for 2022/23). Of course thes numbers imply a much bigger drop in the Q4 three months. I make it over 12% with no material rise in revenue because of price increases (£895m v £872m). I rather expect letter volumes to start going down much faster and so outweighing. the benefit in revenue from price hikes.
You couldn't make it all up, I have never seen a shambles like it thankfully I sold up a £3.22...
I now rather expect that it was the going concern statement that held up the financials. It is the sort of thing that auditors obsess about. The Guardian article does not grasp that it is a rather technical issue. Sure, there is as normal, a change of control clause in the facility agreement which means that the facility will need to be renegotiated on acquisition or replaced but the facility is undrawn and only needed in a downside scenario. If Kretinsky buys he has the resources to provide any neeed funding.
Neeed = needed
Hounddog, thanks for putting some context onto the guardian article. I've had a look at the sections "Consideration of non-binding proposal by EP Group to acquire IDS plc" and "Going Concern Statement" , and how the guardian use them to create an article on financial risk warnings from IDS re Kretensky's bid.
When you see these ' financial warnings' in context it becomes apparent that they are clearly just standard due diligence that one would expect KPMG to highlight in the context of a change of ownership, and hinge around the current debt facility, and the question "whether the new owners would be able to maintain existing loans and secure fresh funding?". I believe kretensky is worth around £8 billion. I'm pretty sure the creditors would be delighted to continue extending the loan facilities to him in return for the annual payments he will be making for loan facilities which he will probably never use. Guardian hyperbole and bluster which can be comfortably ignored.
Isleworth, the guardian article is a cartoon of journalism. KPMG would have been negligent to have ignored loan facilities when the ownership of the loan will obviously change when a company is being taken over; dotting the i's and crossing the t's is their job! The loan facilities have never been used. Kretensky could afford to buy IDS twice over. IDS is at no financial risk with his ownership.
@simx - agreed, the guardian is a nothing article or an article designed to swing the market for their cronies in the city, nothing more, they have cherry picked words from a conversation which would of course raise concerns relating to due diligence and the buyers ability to keep up with debt repayments. DK is the perfect buyer here he is not scraping the barrel with funds and isnt going to be leaving himself short with plenty of financial backup. I couldnt think of anyone else in a better position to take on this business with his wealth and experience.
@Bres well done on selling up at £3.22 but you should have been buying back sub £3.10, personally i am not trading this just waiting for the buy out as im sure DK will get it
Sims - yes, you summarise it well.
That was my third sale of these shares since Oct/2023; having bought and sold them three time's and earning well on each purchase.
So just sitting back now to see what happens, on this coming Tuesday?