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https://www.bbc.co.uk/news/business-57718738
"I think there could well be another offer or two and 280p might be seen before it's a knockout. We've talked fairly regularly about the amount of private equity money there is waiting for UK companies, which are cheap versus peers [overseas]."
Good point. Commercial property prices are depressed at the moment.
But surely freehold land will always be in demand in the UK?
I will be amazed if Amazon doesn't come in on this they have hovered around Morrisons for a long time.
The value of assets is clearly visible in annual audited reports,
Balance sheet also shows residual equity (assets net liabilities).
1) Equity (book value) is much lower than 11 billion
2) There's significant permanent (big fraction of it) shift to online
3) Intu (property) sold-out (went into liquidation)
4) Hammerson (another commercial property investor) dropped like a rock.
generally I've serious doubts on validity of applying previous WM property valuations to current market conditions within commercial/retail segment.
From cashflow NPV + equity/book valuation perspective - this offer isn't really justified in commercial terms.
Only synergy and cost optimization might be an option if it integrates into existing business of merger.
The property portfolio alone is worth 8 billion UKP = 11 billion USD.
On that metric alone, the bids so far are seriously undervaluing Morrisons.
n1shares, was looking around for an alternative, M&S looks promising, do they own the majority of their stores ?
Good move n1shares on M&S. I have added more to my M&S holding today too and continue to hold onto my MRW shares too.
Still waiting.Sold 10% of my holding this morning to buy more Marks who are undervalued and should on all counts be worth over double where they currently are. However feel that there is at least a further 10% to be had on this share.Remember Wall Street is closed today so not expecting any more until Tuesday at earliest
Kingalf, FT might not have yet updated this mornings announcement by Apollo that they have asked Morgan Stanley to advise them. They haven’t approached the MRW board but have declared their intention to move towards a bid. It may not transpire but equally it might. I feel that around 2.70 or higher is what one MRW major shareholder wants to see it.
Kingalf, I tend to agree.
Also worth bearing in mind is that this is not a competition. We all should have our own unique goals and objectives with any investment. Whether anyone buys or sells should not deter you from your own path.
With any investment the trick is to figuring out how your ROI over a pre-defined time frame is likely to be. For any buyer of MRW (net debt aside as it can be handled by a sell and lease-back scheme), it will, in a simplistic term, take a buyer at least 10 years to get their money back (based on a 500m annual profit).
PEs are savvy and they do indeed see a great potential in MRW simply because of the property portfolio so they can reduce the ROI term, but above a certain threshold (share price), the opportunity wont be as tasty any longer.
The financial equation has to be balanced. Having said that, we all know of Softbanks(owner of Fortress) track record of less than prudent investments. WeWork springs to mind :) So they may be willing to cough up significantly more than the asset may be worth.
What the recent waves of takeover targets are proving is that many UK listed companies are significantly undervalued compared to their peers.
Agreed always ME not WE
Given the outcome of takeovers like Cadbury's, one thing you can be certain amongst the continuing BS from those buying out companies, their promises are completely worthless because as soon as they hold the company, they asset strip, sack workers & relocate, all in the interests of enhancing their investment. So any Board members that believe the promises of Fortress are either deluded or acting on self interest.
Ft article today
Apollo said it had not made an approach to Morrison’s board. “There can be no certainty that any offer will be made, nor as to the terms on which any such offer might be made,” it added.
As mentioned I've cashed out, potentially another 14p on the upside (2.80), downside 12p (2.54). Just not worth going in now for any newbies out there, give it a few days, let the heat dissipate, any price sub 2.50 will be worth a consideration.
Stock market is a gamble, a calculated one though. Here we have a base of 2.54 and two potential new buyers, and a slightly less probable third (Amazon, less because the company is going through a CEO transition and is also bust sending current CEO into space). But we haven’t seen the hand of Apollo or a rebid by Leahy group. I have made my calculation that with 2.54 as base, I am going to hold till I see the valuation placed by others. If it turns out to be more that the current 2.66, I am smiling. If not, I am still ok with 2.66 or thereabouts. If it all fizzles out, I still have 2.54. Well, that is the gamble and I am taking it. Losing out on this gamble still leaves me 40% profit. So not bad.
Apollo may be considering launching a bid.
https://www.theguardian.com/business/2021/jul/05/morrisons-takeover-apollo-bid-fortress
I totally agree. Floor is 254, which is 11-13p from here, however, the upside can easily be 23p-43p. So more sense in holding and see how it plays out.
Disagree Lunatic. Not about greed at all.
LTH have been waiting for this for a long time most sitting on an average sub £2 and having taken decent divs over time . Market woken up to the value of the business finally. this isn't a small cap pump and dump...if you were in it for short term 10% happy days take your money ...but as a LTH my floor is now 254p but potential upside to 280p+.
Will continue to hold and see how this plays out.
I'm out 2.6672, can always go back in on any pull back
Agree lunatic. Sold and took profits 2nd time. Good luck to those who are holding
Don't get greedy grab the profit that's what you're in it for ,..
Wonder what the value of Morrison 85 percent freehold land that shops are on
also out, sold my 2300 shares at a 50% profit. good luck to everyone else, this may rise further given the interest but not a gamble i’m willing to take. off to seek my next investment ATB
Checking the transaction log, I can confirm it was executed at 2.66 and not 2.67. Sorry about that.
Falk was in auction for first 5 mins this morning, maybe thats why u could not get price?