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Price is above offer when mkt expects a higher bid.
https://www.dailymail.co.uk/money/markets/article-9788967/Pandemic-predators-threat-200-UK-firms-say-City-analysts.html
Supermarket giant Morrisons is worth £7.6billion and the board should have held out for more cash, according to analysts.
It accepted a 252p a share offer from US buyout giant Fortress this month that valued it at £6.3billion.
But the Canaccord Genuity report puts a 314p-a-share, or £7.6billion, price tag on Morrisons – fuelling concerns that the board caved in too early.
With rival suitors circling - including private equity firm Clayton, Dubilier & Rice which had a 230p a share bid rejected last month – a higher offer could materialise.
Shares closed at 263.1p yesterday.
Graham Simpson, at Canaccord Genuity, said: 'The fact that the share price is above the 252p recommended offer tells us the market also expects a higher offer.
Hi mattwsh2904,
I don't think there's any special dividend. I don't recall one being announced before these bids started. The Fortress offer could be said to include a "special" dividend in that the 2p dividend forming part of the offer price would probably lie outside the normal dividend cycle (depending on timing).
The 12p "premium" in the share price, above the total value of the Fortress offer, seems now to be starting to be eroded away slowly. I took on board everything in the recent comments on this board, as well as other things, and decided to sell this morning at just over 164p - still about 10p above the total offer (incl dividend). It has since fallen slightly further.
Rgds, Mike.
Is the share price factoring in any special dividend? I haven't checked but could this be why we are +12p
I doubt we'll have to wait that long. And if there is a rival offer, it will almost certainly be in excess of the current sp. So yes, if there's no new offer, it will cost you 12p, but if there is one, selling at the current price will also have a cost.
Shareholders probably won't know until early August whether a rival bid will appear. Meanwhile it will cost you about 12p per share to find out rather than take the current price.
Morrison describe their property portfolio as worth 6bn so the current mkt cap of 6.4 doesn't seem excessive seeing as you get a grocery and wholesale manufacturing business thrown in too.
What were fund managers doing prior to the bid to allow this to sit as such a cheap valuation. What other obvious targets are there - Sainsbury may have already had it's rise prompted by the Czech stake. Tesco?
Hi NotBot,
Thanks for summarizing the dividends received - for my part I had certainly forgotten how big some of the earlier ones were!
However, CGT rules don't take account of dividends (which are potentially taxed as income) so for most they will still be crystallizing a capital loss.
ATB, Mike.
mattwsh2904,
Similar here - my average is about £2-73 (mainly bought in 2021/2013 but smaller top-ups more recently) so I'm still "under water" and the current share price is so near yet so far.
Jimbo1122,
I'm not sure why there should be a "better" offer from Fortress as the current offer (252p plus 2p) has already been recommended by the Board for acceptance - unless something fundamentally changes such as an unsolicited higher offer from elsewhere. Of course, if the current offer failed to secure 75% of shareholder votes that's another matter.
I'm still surprised that the share price is hovering *above* the offer, and at such an "exact" level (265p/266p). Normally one would expect it to be a couple of pence *below* the agreed offer, to allow for dealing costs if one was to buy, and "time value of money". I am tempted to sell now, rather than wait as the price falls to the offer level, but another half of me says that the fact that the current SP is so steadily above the offer suggests that the collective wisdom of "the market" is that there *will* be another offer, at a higher price, within the timescale.
As to the timescale for the current "recommended" offer, I've tried to re-read the full announcement. The timescales for the events will be set out in the Scheme Document, and it says that the Scheme Document is expected to be published within 28 days of the date of the announcement (5 Jul 2021), so that should be no later than 2 Aug 2021. The "scheme" is expected to become effective in Q4 2021, so that is October at the earliest. A long time for a private investor to stay in suspense!
Anyway, good luck all.
Mike.
@mattwsh2904: Remember to include dividends when you're considering what "break even" means for you (but also inflation). I'm guessing adjusting for those your £2.75 entry would be lower so you'll already have achieved "break even". Going from FY2013 onwards (mid-calendar-year 2013 onwards): 13 + 13.65 + 5 + 5.43 + 6.09 + 6.6 + 6.77 + 7.15 (I googled for "morrisons dividend history"). So that's a total of 63.69p; I think that might be ignoring special dividends so perhaps even higher.
Always worth considering any dividends received when weighing up one's profit or loss.
shame i bought in at £2.75 in 2013...once saw around £3.15 before Aldi/Lidl exploded. Would like to break even....
Not a lot of activity on further offers is the present offer the only one?
I don't personally own any MRW shares but my wife is in the Sharesave scheme. She is paying £350.00 per month and buying them at 154p. She is only about 13 or 14 months into the 36 month period so is unable to sell them at the current price.
If I owned shares I would definitely sell at the current price and be highly content with the profit achieved. If anybody makes a higher bid it will be one of the investors that will asset strip the company and load it with debt and this would lead to huge ethical and political issues. I think MRW BOD's will get a slightly better offer from Fortress than the 254p already submitted but not enough to justify holding on to the shares at the current price.
Not looking like we going to see anymore offers and some holders selling out. Does this mean the current share price is overvalued based on the "on the table offer? "
Fund manager JO Hambro sells out of Morrisons despite calling for higher bids.
Stock exchange filings reveal that JO Hambro, a long-only fund with £31 billion of assets under management, started selling shares in Morrisons at 233p on June 22 and has sold 15.29 million to reduce its stake in the UK’s fourth-largest supermarket from 2.97 per cent to 2.33 per cent.
JO Hambro’s most recent trade was at 267p to take advantage of Morrisons’ highest share price in eight years.
https://www.thetimes.co.uk/article/fund-manager-jo-hambro-sells-out-of-morrisons-despite-calling-for-higher-bids-zjp3f7vdr
The clock was reset by the Fortress Investment Group bid.
I've just read the article, little confused with the following
"CD&R has plenty of time to consider its options, as the deadline for it to submit a new offer isn’t until early August, the people said"
I thought they had until the 17th of July ?
CD&R Weighs Fresh Pledges to Stay in $9 Billion Morrison Race
As I mentioned a couple of days ago, Amazon would not need to bid much above the agreed price to secure the business, only the pure asset strippers will need to pay up but with all the consentions needing to be made that eventual bid may be a lot lower then people expect. Anyone joining the band waggon at this late stage may well be disappointed with the eventual outcome.
Keep up Jed.
The Gov. have already said it is a commercial matter between the companies themselves and they will not get involved.
This is one time when the rampers' famous phrase "wouldn't want to be out of this over the weekend" really does make sense! Haha
Absolute ZERO - in my opinion.
So what's the betting now that the government could block this takeover offer and the sp fall back to £1.60 ish ?
Who saw Renishaw another family/ethics type company have taken themselves off the sell list as can’t find vs a suitable bidder. Ken would be proud of them!
Bertram, you're a bookmaking pro, but you're on at 10/1.
Hi Gmed-2
I could agree with you but then we would both be wrong..... hehe. Joking apart I just think Amazon will have been in the loop and not forgetting the board of MRW have already agreed a takeover. Who knows, only Amazon I guess. Would be excellent for us holders if they did. Regards.
PS how's £10 to just giving if Amazon come in from me and £1 from you if they don`t? 10/1 ? a friendly bet.
I'm Concerned that amazon did have a purchase price built into their partnership agreement... Love to understand more of any agreements they made at I read 190p..what it entailed I don't know... Can't have been a takeover figure surely.