Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Derisory? What do you expect them to offer?
There will be significant and compelling benefits should the merger be accepted. It is possible Mondi will increase their derisory initial offer. Weak sellers are being snapped up - best to stay put and see what transpires. In my opinion there is plenty more upside here whatever happens.
Mondi took a kicking for pulling out of Russia and that has had a knock on the share price.
I didn’t think Smiths last update was anything to shout about, it seemed to be increasing debt
and could be argued it wasn’t the better company.
The merger statement quote significant cost savings due to combining the businesses. So, to be fair I take note of what they say, rather than views on here.
If the economy improves and interest rates start to come down, it will be a good
recovery play, and probably a good bet , because once Nvidia bursts it’s bubble and it
will do, surely a rotation will occur.
Something to think about
I have sold, so won't be bothering this board much in the near term, BUT I was a confident holder in SMDS , a well -managed company in a growth area. I chose them over Mondi(or others) for what I still believe are good reasons. Mondi's SP peaked at 2100+ in 2018 and their latest results published on 22 Feb (I suggest all holders here have a read! EBITDA down 600m euros, revenues down1.2bill euros ) have been followed by a 7% drop in the SP. The markets are making their reservations clear.
No more from me on this topic , I am happy with my decision and respect others whose views may differ, and so long as you are well- informed I wish you well.
Longer term it will prove a decent share to hold
.
The decision to sell on a post merger mondi sp dip is a short term one,
I personally want long term growth and this take over will likely see long term growth for the new combined business.
According to the RNS statements regarding the merger, there are to be significant cost savings due to the merger. Why would you then sell, surely with the chatter of rate reductions by the FED , one would assume that the share price post merger would add some value.
It seems to me a no brainer and a share to hold and review the end of the year.
I’d say you pretty much covered it.
However I don’t think the Mondi share price will fall if they are successful with their current bid. If you agree they’re getting a bargain it should help their share price long term. It does seem that Smds has agreed this bid so I can’t see why it would fall through but it is always a risk. I’m staying because I see a,b and c being the most likely outcomes. Looking at how the smiths sp has reacted I think a is the most likely but they all represent an increase in the current sp.
My last entry here was in about Oct 22 at the 230 level, since then I have added and now hold quite a few at an average in the 250's . I have read through the recent posts but it seems that no-one has summarised the position thoroughly, so here goes:
There are 4 possible scenarios;
A The takeover occurs on the present terms
B The takeover occurs on slightly different terms(a higher offer/some cash)
C A competing bid arrives
D The deal collapses
So as a holder what to do(my thoughts everyone else makes their own decision).
For A/B IF you wait and hold until the deal completes you end up holding shares in Mondi equivalent to the number of shares you hold X 370p.However IMV, on completion Mondi shares may well fall because of analysts' fears of
" integration risk/delay, Mondi overpaid, dilution ......."The fact that the offer is "all share" is generally not viewed kindly by the city.
For C, you wait until the dust clears and ( maybe ) a higher offer succeeds from Mondi or an alternative bidder, or Mondo or the other bidder includes a significant cash element, better outcome/
For D SMDS shares will undoubtedly fall sharply , even though they have done nothing wrong and are , in effect , the same company as today. On 8 Feb when the news broke SMDS were trading in the 280's , that's about where they would revert to IMO .
So what to do?
As I said above, I hold at an average which will bring me (incl divis) about a 40 % profit in 18 months. outcome A/B might add another 10% to that, D would take me back to 10/15%, and C if it occurs may be a significant improvement.ALL things considered, will sell tomorrow and reinvest the money elsewhere.
Feel free to argue/amend or rubbish my view, it is my personal opinion , no more, and if flawed, help me to correct my analysis, whatever the outcome I wish you good luck, IMV SMDS would be better as a stand-alone, but the company seems pretty set on accepting the opportunist offer.
Jefferies "said the strategic rationale for the merger with rival DS Smith is "compelling", with "substantial" synergies and value creation."
Maybe that will help get things moving in the right direction.
Based on the stated proportions of the MNDI share only offer, this share price is now completely dependent on the MNDI share price. Currently sitting at 1307p for a MNDI share, that implies a value of 353p for an SMDS share. Not a great offer at all. Will any larger shareholders potentially turn the offer down at this kind of price? I would!
Short price to around 290 then offer premium of 33% looks good BUT would be fairer at 315 plus 33%, I have traded SMDS
at 383 December 2020 and again April 2021 at 418 and bought back as low as 260. Wish I knew what settlements directors
are offered. Feel I'm being shafted
Sitting on my shares in SMDS after the Wincanton takeover looked a done deal and then another offer came in worth waiting to see what happens as still in profit either way
I won’t be selling for 2 reasons, it is a low ball offer, which means mondi is getting a bargain so it should benefit the mondi share price long term especially if they can get good cost savings which should be easy. Secondly in think the 373 has been put out there for others to beat if they want to. It looks like a deal is going ahead and it will be for 373 or above( obviously depending on what happens to Mondi sp but at this price I don’t think many would say they are overpaying.)
Yes I tried to figure it out as to dividend in new company etc and a bit above my knowledge with all this TBH so I'm setting a price to sell and look for a new investment. will be a 25% gain which I am happy with.
I'll be selling; pretty poor deal for LTH
Certainly some big late reported trades.
... and the fact that most of the bigwigs have secured cushy positions in the new management team, plus will get lots of lovely new shares in the larger business? No wonder it is recommended!
Are you taking into account, the amount of debt the company has?
Sorry, accidentally posted before finishing...
Option 2 is that you do nothing in which case your shares will automatically convert to the newco shares at the agreed exchange rate at which time you will become a Mondi shareholder
Your options are:
1/that you sell out before the deal is fully finalised, in which case you get the SP at the time you sell,
Sorry might be a silly question but I'm kinda new to takeovers etc. What will I get once this sale happens? do I get cash and new shares in the new company, shares for shares once the value of each is worked out ( so 1 share for every 4) Thanks
As a very long term holder of this worthy company I am astonished that accepting such a bargain-basement deal is being contemplated by the Board. Let us hope that a white knight is saddling up his steed not too far away.
From experience I see everytime there is a bid that the Target Co opens around 5,6 % below the bid price and the gap slowly closes as the deal date approaches. It carries no meaning in relation to the comments you always see ranging from
Done deal
It's not going through
They expect a bidding war
It's too cheap
Etc
Hi Grezzz,
It looks like sloppy reporting to me.
I'd have thought that it would be subject to "due diligence" on both sides, shareholders on both sides voting in favour, regulatory approvals (if required), etc etc, which is why an extension to the deadline was asked for and agreed. As well as this being an all-share deal, so the "acquirer" doesn't need to take on a load of extra debt, the other main difference from most other "takeovers" that I've seen is that in effect SMDS management are recommending it to their shareholders rather than saying "shareholders are advised to take no action because we're going to negotiate a better offer".
All the best, Mike.
Yes it feels fairly 'done' to me too. You'd have thought that respective large shareholders on both sides have been kept in the loop and whilst its never done till its done, you'd think that they must have given at least a nod before the announcement.
Also shorts in Mondi have dropped recently which might suggest that fears of a vast overpayment for SMDS have become less likely and the lack of large shorts on SMDS might suggest no large drops.
Both SP's seem about right given some 'sell on news' dissapointment on SMDS but in medium term i think theres a buy and hold profit to be had here.
IMHO