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Starting to look like the sale of Wilson marine is going to plan. Sale would trigger huge upgrade here.
There was a sharp upturn in Wilson shares in the Brazilian market after London close....something coalescing??
Yep, just been walked down to take out sellers - news should follow soon as it looks like someone's taking a position with repeated buys. Just conjecture but reasoned.
Of the Wilson Bros shipping business was announced, so an RNS re: the outcome shouldn't be that far away now.
Given the improving outlook for this division, I'd rather see a sale or 'rationalisation' of their investment portfolio, OWIL, tbh. It's a rag bag of far too many 'hedge' funds and mediocre vehicles skewed to the 'downside' for my liking and with interest rates likely to fall over the coming months, better use of the funds involved in favour of building up the Wilson shipping / towage business could be quite well timed...
Just my view, anyway, fwiw - sasa.
Hopefully, this will get some folks' attention . OCN has just become more interesting as a 'South- south' logistics play, IMO.
President Ramaphosa . Johannesburg II Declaration adopted . The XV Summit has adopted guiding principles on the BRICS EXPANSION.Following countries invited to join .
Argentina
Egypt
Ethiopia
Iran
Saudi Arabia
UAE
To take effect from the 1st of January 2024
https://twitter.com/bricsza/status/1694619430435606808?s=46&t=z4xNhdJMfh7lQTckBCIJuw
ATB
Results this week, very lucrative divestment in the mix and NAV around twice current MCap. What's not to like? Under the radar of the big boys at present watch this gem jump into the limelight. Super opportunity imo at this level.
Yes, I agree. The metrics on this one looked very favourable so I took a position here on Thursday. I expect imminent news of Wilson divestment at a considerable premium and the price to react accordingly. Far too cheap wrt asset value.
My calculation of NAV this morning was 21.50 sterling per OCN share .
Wilson Sons ended the day on Friday in the green with a biggest trade buy at the end of the session since May ( 1.75 million shares @ 13.35 Reals/share. --approx 2 million quid
Hopeful for news soon
Wilson Sons Q2 results out next Wednesday on 9th August. Perhaps we'll see some update then?
https://ri.wilsonsons.com.br/en/publications/quartely-results/
Consolidation /restructuring of global logistics networks continues , with Abu Dhabi's AD Ports completing its acquisition of Spain's Noatum Group.
Noatum has good coverage of South America...except for Brazil.
https://www.noatum.com/en/about-noatum/#direccion
I wonder whether OCN's 'no formal talks' with MSC might be 'gate-crashed' by Abu Dhabi ?
Could there be a bidding war ?
The Salomon family might be open to an approach (if only to drive the price up !) from a Gulf Arab SWF.
It hasn't allowed politics or history to get in the way of its business relationship with Ultranav, which was founded in Chile in 1960 by one Captain Albert von Appen, who came from Germany in late 1937.
https://interferencia.cl/articulos/albert-von-appen-el-nazi-que-construyo-un-imperio-en-chile.
Popcorn at the ready...
IMO, DYOR, NAI etc etc
OCN only says that there have been no 'formal' talks.
IF anything emerges, we'll be told then what the deal is.
In MSC's Log-In acquisition Dec 2021, this is what happened
ttps://www.seatrade-maritime.com/containers/log-logistica-accept-msc-takeover-offer
.."MSC asked Brazil's competition regulator, the Administrative Council for Economic Defense (CADE), for permission to purchase up to 67 % of Log-In's shares.
The acquisition would happen through a public offer process, and MSC said at the time that it would tender an initial offering price of $4.73 per share - a 67% premium over Log-In's share price.
The world's top container lines are on a buyng spree driven by unprecedented profits over the last 18 months. Earlier this week MSC made a $6.4bn offer for Bollore Africa Logistics..."
As I said yesterday, the Aponte family (behind MSC) reportedly made $ 28 Bn during the pandemic disruption, so I'd guess $$$ cash would be more likely....
NAI, DYOR etc etc
Will we gat MSC paper or cash?
A little bit more background re Wilson Sons activities and footprint
hxxps://essfeed.com/msc-eyes-wilson-sons-1bn-acquisition/
Note :..."Surprisingly, data from Alphaliner reveals that MSC now boasts more shipping capacity heading to South America than on the transpacific route to North America..."
suggesting lots of scope for synergies
and at the bottom, a link claiming that the Aponte family made USD 28 Bn during the pandemic...
'Loose change'!
According to the 2017 accounts the discount to NAV back then was 32%.
https://www.oceanwilsons.bm/sites/ocean-wilson/files/ocean-wilson/result-presentation/ocean-wilsons-interim-2017.pdf
@Extrader - thanks for your posts, and the story from 2018 looks quite different - that it was Wilson Sons considering a disposal of some assets rather than Ocean Wilsons considering a disposal/sale of Wilson Sons. 2023's possibilities to unlock value seem more substantial and the assets have grown in value in those 5 years too.
I notice that today's price for PORT3 (Wilson Sons) has jumped to R$12.92. Even so, the Brazilian market isn't pricing in any likelihood to the R$19.90-R$25.60 .... yet. And OCN's price has moved proportionately even less for the week. Clearly the local market understands the value of the asset more than the UK or Bermuda does (which is a good sign for hidden value).
Also great news for anyone wanting to get on board the Ocean Wilson's Liner.
Dont think the discount to NAV was as great then. Didn't that result in listing the sub in Sao Paulo?
A previous strategic review, 5 years ago, included this :
hxxps://exame.com/negocios/wilson-sons-vai-avaliar-venda-de-ativos-e-parceria-estrategica/
The board of directors of Wilson Sons approved Monday the beginning of the evaluation process of its investments in container terminal and logistics assets, the company said in a material fact.
"The process is part of the evaluation of strategic alternatives that is being carried out by the company's board of directors, which may include the DISPOSAL [my caps] of the referred assets, as well as the ATTRACTION OF STRATEGIC PARTNERS," Wilson Sons said."
Then, as now, we're reminded that ' no decision has been taken and there is no certainty that any transaction will occur'.
Suggestion that MSC may be looking only at OCN's stake :
https://www.infomoney.com.br/mercados/wilson-sons-port3-controlador-confirma-que-avalia-venda-de-investimentos-na-companhia-desempenho-acoes/
Googletranslate :
"According to a report by Bradesco BBI *, MSC is reportedly negotiating the purchase of 57% of Wilson Sons in a transaction of approximately R$ 5 billion or R$ 8.8 billion for 100%.
Bradesco BBI commented that assuming the amount of R$ 8.8 billion-R$ 11.3 billion as equity and company shares to establish the price range, this change of control may result in a tag-along price of R$ 19.90 to R$ 25.60 per share of Wilson Sons, resulting in a possible increase of 90% to 144% over the closing price of last Friday.."
* Bradesco BBI is the investment banking arm of Bradesco Group , 3rd largest bank in Lat Am, for context, in market cap. a little below Barclays.
The O Globo snippet re (in)formal proposals was short on detail, not making it clear whether the mooted Rs 5 billion was 'outright sale' or 'implied value'.
The earlier corporate activity by MSC in Brazil was to acquire a controlling interest, whilst maintaining a public listing. Possibly because of the target's 'strategic' nature?
.."MSC asked Brazil's competition regulator, the Administrative Council for Economic Defense (CADE), for permission to purchase up to 67 % of Log-In's shares.
The acquisition would happen through a public offer process, and MSC said at the time that it would tender an initial offering price of $4.73 per share - a 67% premium over Log-In's share price..."
An opportunity for the Salomons to monetise a serious %age of their Wilson Sons stake at a 'realistic' aka full valuation might be too good to pass up.
Hi Agricore,
You'll see that I've copied over for info (and a link to source) a post made by someone else.
The journalist isn't some random blogger' he's a senior journalist (250K Twitter followers) in the Globo Group, largest media Group in Lat America.
As to the numbers, the poster source used NAV in his concluding remarks, when he should have said MCap , based on MSC's offer. I missed that.
As you point out, NAV isn't necessarily a good metric : most companies' market value is higher than TBV, esp. where prospects are good, which (presumably) explains MSC's interest ....and maybe even the premium they're reportedly willing to pay , which they did in an earlier Brazilian acquisition https://www.seatrade-maritime.com/containers/log-logistica-accept-msc-takeover-offer , also (coincidentally ?) at a 67% premium to the s/p.
In any event, it looks as though we're agreed that at the very least there should be a material re-rating of OCN.
ATB
Extrader, where are you getting Wilson Sons £700m NAV from? I'm looking at their last set of accounts and Wilson Son's have $742m net assets so 57% i.e. $429.8m or £343.8m is attributable to OCN. So your numbers are out by quite a bit.
(Refer to:
https://otp.tools.investis.com/clients/uk/ocean_wilsons2/rns/regulatory-story.aspx?cid=1632&newsid=1676852)
If WilsonSons is sold it won't be sold to break it up and strip its assets, so its NAV isn't wholly relevant. The reason I say this is two-fold. First of all, the market price is much higher than its assets. Looking at Wilsonsons.br share price today of R$11.99 (up 14%) this translates to a value of R$2.98bn to OCN i.e. £500.85m. So it's at a 50% premium to its £343.8m of assets. (i.e. market price translates to £14.16 per share).
The link you've shared is just to some random blogger in Brazil. Not sure there's any credibility to the R$5bn **GUESS** he has made! But if MSC do want to pay a 66% premium to today's share price (and it's not unreasonable that a hostile takeover would be at a 66% premium) then that equates to an offer worth £23.51 per share to each OCN holder. Today's "little" jump is nothing compared to the jump as the market catches up.
And beyond the £23.51 per share each OCN share holder also has investments and cash (using 31/12/22 numbers*) of £6.64/share. So a total value of £30.15 per share.
* I hold Hansa and the holdings are very similar to OCN's - the NAV has been fairly stable 31/12/22 to today so using £6.64 a share isn't unreasonable.
Or expressed in absolutes in the event of a sale to MSC OCN's NAV would be £1,066.3m vs OCN's market cap price today of £325.3m
What if it all goes Pete Tong? What if the sale doesn't go through???? -> Digging into WilsonSons web site what is impressive is the growth story, the profitability and the future opportunity - see the link below. For example that for Brazil to draw level with a peer like Chile then it's TEU would need to grow by 300%. That's a lot of growth for WilsonSons. Plus the opportunity to capitalise on growth in Uruguay and Argentina's trade due to the River Plate's shallowness.
https://api.mziq.com/mzfilemanager/v2/d/8284de4a-426a-465a-beab-92abeabafc97/3bed0373-fff3-9539-dd79-fab25a49abca?origin=1
Even if the offer doesn't go through, this 57% holding of Wilson is valuable to OCN and if nothing else the news of the rumour will draw new interest to the clear value on offer here.
GLA
Hat tip to JimmyWilson on advfn
.."MSC, a Swiss company specializing in maritime transport, is negotiating the purchase of Brazil's Wilson Sons, one of the country's longest-running companies, founded almost 200 years ago.
This is a transaction of about R$ 5 billion. If it closes, it will be MSC's second acquisition of a national company in a year
[Ed.: In December 2021, MSC is offering at least 5.7 billion euros for Bolloré Africa Logistics, a subsidiary of the Bolloré group. In December 2022, it was announced MSC had completed the acquisition of Bolloré Africa Logistics.]
Source; hxxps://oglobo.globo.com/blogs/lauro-jardim/post/2023/06/empresa-suica-de-navegacao-negocia-a-compra-de-companhia-brasileira-em-transacao-bilionaria.ghtml
£5BN Brazilian Real = £816M for the business. OCN Owns circa 57% = £465M. Market Cap = £320M
So the rumored offer is above OCN current market Cap without its investments of circa $290M/£233M thrown in.
If the offer goes through (big if like) then I put Net Asset Value of circa £700M vs £320M current market cap. Big upside if you ask me..."
Picked these up at £8.40 which is about 20% below the last NAV value of Wilson Sons. Speculation on its possible sale. Free carry on £6.83/share worth of investments and about £0.15 a share cash plus a dividend. Already hold via Hansa where about 30.3p/share equates to Wilson Sons (via look through exposure), but glad to have some direct exposure here too.
"As at market close on 31 March 2023, the trading value of the Ocean Wilsons' investment in Wilson Sons totalled approximately US$470.9 million, which represents US$13.31 (£10.79) per Ocean Wilsons share. The investment portfolio was valued at approximately US$298.1 million which represents US$8.43 (£6.83) per Ocean Wilsons share. In aggregate, including US$8.4 million of cash at the holding company level, results in an implied net asset value per Ocean Wilsons share of US$21.98 (£17.81)."
GLA
But 'clippers' beware - the sp will drop some 60p on Thursday when it's 'XD'! - sasa.
Results good in places, a few red flags in others.
Big discount to NAV remains but the write down of investments and forward looking uncertainty is a worry, as are the large ongoing contingent liabilities in note 22. Big tax cases in corrupt jurisdictions are often bad news for equity shareholder value.
Dividend maintained but with little cover this year compared to last. We need a good year to shore the yield up for the future. I'm holding but will be out on any sign of the discount to NAV eroding. On the other hand if the management can navigate to calmer waters, the current price could look very cheap.