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RNS £1.05 offer rejected...thought we`d pop to at least that
A US private equity investment firm's takeover bid for pubs and brewing giant Marston's has been rejected by its board on the basis that it "significantly undervalues" the listed company. Two prior bids, submitted in December, have also been revealed.
The move from Platinum Equity Advisors was first outlined on Friday 29 January.
A Marston's statement to the London Stock Exchange said: "The board of Marston's has considered the proposal of 105 pence per Marston's share with its advisers, and unanimously rejected the proposal on the basis that it very significantly undervalues Marston's.
"The proposal followed two earlier proposals at 88 pence and 95 pence per share in December 2020, both of which were received prior to the Brains transaction, and were unanimously rejected by the board.
"The proposal represents a 19 per cent discount to the company's share price at the start of 2020, pre-Covid-19; and since that time the company has completed the transformative joint venture with Carlsberg to create the Carlsberg Marston's Brewing Company, which realised significant value on completion and is anticipated to continue to do so as the benefits of the joint venture are realised.
"In December 2020 the company also announced an agreement to operate 156 high quality pubs within the SA Brain estate in South and West Wales, in a transaction which is expected to be accretive to earnings in the first full year of trading."
Platinum is now required to either announce a firm intention to make an offer for the company or not by 5pm on Friday 26 February.
JP Morgan Cazenove is acting as financial adviser exclusively for Marston's.
Why wouldn't it go north? Barclays and Nordes Bank are buying 1% and 2.5% of the company shares at 87p on Friday. Jump in now. Mms not letting it go higher than 90p anyway. But when we get the first offer confirmed you will get offered 2p less than that first offer at once from market makers. Very likely to be between £1.25 and 1.50. And then 2p less than a second offer from a new bidder. And so on until they seal a deal. No-one's buying 1 and 2.5% in one go for no reason. James Spader bought in at 1% with what looks like his own money- he also works in mergers and acquisitions. Banks will probably keep buying.
No brainer.
I'm an ethical investor. I don't do oil or weapons and lots of other stuff. I put petrol in my car and I'm not a pacifist but as far as my investments are concerned I think 'do no harm' and ideally do some good. But we don't control the financial markets infrastructure. Takeovers will happen until we restructure- not looking likely is it? Like never. I would be happy with a bit more regulation myself. They won't asset strip the pubs. Marston pubs are making good money (turnover £1.17 billion in 2019 according to Bloomberg and the FT- google it) and with less post pandemic competition they will do even better. Kraft didn't asset strip Cadbury's. Chocolate bars are smaller. No-one died.
Big old buy for a very high short term return.
Barclays and Nordes Bank did not buy on friday!
They are merely advising their holdings along with everyone else because the company is in a bid situation. That is what the Form 8.3 is for.
Ah well, I spoke too soon! I expected better than that for sure. Never mind. Looks like we all had a bit of a lift so far from the whole episode.
section 8.3 notices are not new buys they are declaring how much they already own. There will be loads of these over the next few days.
What we need now is for Platinum to make an offer and then start purchasing shares in the market. They can do this if the market price is below their offer price, although why would you sell for less than £1.05 now is beyond me.
Looks like the market thinks that they might do that Adeg. Still going up.
I didn't realise that the 8.3 forms were just a declaration of what you already have. Classic lse being slow with the RNS.
Gla.
Pint only alf full the bid will go up just hold your nerve.
Hi All,
To state my position, I would accept £1.05 for my holding because it's a decent premium and I like to bank gains.
Questions for people in the know:
1) Why would Platinum, a P/E firm, buy on the open market if they cannot be guaranteed to own 100% of the issued share capital?
2) What viable options do Platinum have if management refuse to accept their offer given the fragmented nature of the shareholdings as evidence by the 8.3 RNS'?
Thanks all
Tricky - a most admirable stance regards ethical investing but personally I look for growth and dividend from my investments and leave it to someone else to regulate what’s legal or acceptable. I decided many years ago that at least you knew upfront that a bookies sole objective was to take your money off you so what makes Barclays or Lloyd’s more ethical than William hill or Ladbrokes? I am happy to invest in pubs or alcohol producers even though if their product is abused it can cause ill health and even death but I am also happy to invest in tobacco producers whose product if used as directed is pretty much guaranteed to cause I’ll health and even death. I’m not sure if my investments in big pharma is enough to offset my investments in alcohol land tobacco any more than I think my investment in green energy offsets my holding oil and airlines. Even Unilever has had its issues and my investment in associated British food effectively includes the fast fashion retailer primark along with British sugar who to my knowledge are the biggest producer of cannabis in Europe! Trying to find shares that will stand a chance of giving me growth and dividend is hard enough, trying to find one that does it ethically would be a nightmare.
That said I do give to charities, try to be generally a nice person, have no issues with vegans or environmentalists (as long as they aren’t lying in the road stopping me getting where I am going) and like I said admire anyone who can make ethical investing work for them.
If this platinum lot make a formal offer over £1.05 and it’s put to the vote I’m pretty sure I’d be a no. If I’m honest I think the board can get us to £1.00+ fairly rapidly once we are out of lockdown but it’s only once we are out of lockdown that we will feel to true extent of business failures and the associated unemployment and we already know we will need to pay for the govt support/borrowings so it’s possible that there may be additional taxes on alcohol or other taxes that affect the disposable income of our customers. So if they came in at say £1.30 I might be tempted to take my jam today.
Pmoran, well we all have our boundaries I guess though not sure what yours are, lol. The only reason I mentioned that I am an ethical investor- fully aware not everyone is- is because some posters were discussing the question of acquisitions and assuming that buyouts are always about asset stripping. I don't think they are.
On the situation Marston's are in I must admit I didn't expect such a low ball offer. I agree with the board. It's derisory. For all the reasons they have stated. £1.50 would be a steal. £1.05 is cheeky as hell. Hope they don't get it for that. Bit shocked actually. Hopefully they will up their game. The market seems to have responded with resilience so far.
Marstons is Pedigree the offer of 105 will not brew well with many large holders for sure.
£1.25 this is over £125 pre dividend most years,maybe as high as 137p sometime ago?
its just time and this business will be back to its usual.
Revolution bars to me resemble pitcher and piano bars in attraction to youth.
Revolution bars seem to be city centre affairs as I recall, Marstons are much better distributed post-Covid. Israel is already seeing very positive effects from vaccination and we’re not far behind.
Platinum’s lowball bids might have been mistimed, either they come up with a much better bid or the market will rise taking away the big margin they want.
Can you send me the link/article for the banks buying please? I can't seem to find any info on it