Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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To be fair, I just looked back at the Q3 Trading Update from last year (9th March 2023) and it reads in a similar vein with no hard numbers given.
Is this a joke or something to hide? No numbers in this Trading Update doesn’t fill one with confidence at all. If numbers were good they’d be shouting them from the rooftops one day prior to Mondi’s deadline for naming their official offer. Not good enough.
They are in the process of sealing offer deal here anyway. Mondi got all the numbers they need. Gla
In case you don't look at the RNS's these days, DSS have published a statement, without any numbers. There is a call at 08.00 today using UK Toll Free 0808 109 0700 and Password DS Smith.
https://www.lse.co.uk/rns/SMDS/ds-smith-plc-22683648220-q3-trading-statement-yyc0x04nrn2nzzv.html
Well, we'll know on Thursday where we stand with this 'old T/O chestnut'.
On the positive side, my guess would be an offer of 400p + to be put to shareholders, almost certainly more if it is to gain the Board's recommendation - if there's 'no deal' in the event, the sp's likely to fall back by only 10% or so, given the current price is barely above where it was pre the bid talks.
Ergo, limited downside from here v 30% upside seems a good risk / reward ratio to me...
Meanwhile, management seems to be on the 'front foot' in today's conditions, which is encouraging, anyway - just my take on things, pending, fwiw - sasa.
Thanks for the detail Liam. Good to hear SMDS are not just rolling over.
Or maybe market is forcing you to believe it? Having said that an update soon here too, so sp might have some movement.
Market has a low expectation this will go through.
Mondi Plc has increased its preliminary takeover offer for rival DS Smith Plc as it seeks to create one of the world’s largest packaging companies, people with knowledge of the matter said.
Mondi improved its indicative all-stock proposal several days ago, the people said, asking not to be identified because the information is private. DS Smith still sees that bid as inadequate, the people said.
London-listed DS Smith, which has a market value of about £4.5 billion ($5.7 billion), announced last month it had received an expression of interest from Mondi. Under UK takeover rules, Mondi has until March 7 to announce a firm bid or decide it’s walking away.
Deliberations are ongoing, and there’s no certainty they will result in a transaction. Representatives for Mondi and DS Smith declined to comment.
Packaging companies have been pursuing consolidation as they grapple with the slowdown in demand from online shoppers. A deal would create a leading European containerboard and box producer, worth more than £10 billion based on current market values.
I cant see any further either :)) though guess where wasnt much info regarding price levels. Having said that, I personaly believe 400-450p range will be on the table. Gla
Ed1, can you add any detail to that, please? I'm guessing there's no substance as there hasn't been any RNS but can't see because the report is hidden behind their paywall.
Yes your correct, I'd gotten mixed up with Launceston apologies.
Sollers, my understanding is that the Louth factory was in Lincolnshire.
Just the Devizes plant left in the southwest?
DS Smith management are taking the tough decisions. The company are closing their Louth operation and the actual production ceased yesterday. So even though there is takeover proposals management are still driving the business.
https://www.bbc.co.uk/news/articles/crg7ll3zn8po
Just look at Wincanton, Uk listed shares are getting snapped up because they are not being properly valued. Just because Smds was trading below £3prior to the bid doesn’t mean a 30% uplift will seal the deal. I really do think the bid will have to be in excess of £4. Whether they will be prepared to pay that is another issue.
DS Smith are building a new preparation line for Kemsley paper machine 3, which will be operational in 2026. It will improve raw material handling, improve efficiency and reduce water consumption.
Not sure if it has been disclosed on an RNS, which is drowning in takeover documentation.
https://www.euwid-paper.com/news/companies/ds-smith-to-upgrade-fibre-line-at-kemsley-paper-mill-290224/
Thanks Uncle Doug, hadn’t thought of the some of the points you made. Exactly the sort of differing opinion I was after when I posted originally.
"I understand about people’s opinion in diversifying my portfolio but investing in other companies is something that I have no desire to do currently as I have little to no experience in share dealing, or time for researching.
The shares have risen and fallen over the last 10 years but one thing that has remained consistent is the dividends. Therefore share price is currently irrelevant to a certain extent as I am happy just taking these payments twice a year and was more interested in peoples thoughts of this continuing?"
That sounds like you've taken your own advice on not diversifying, and that's ok. There are no absolutely right or wrong answers. Share price isn't totally irrelevant however, but as long as it's higher than you paid for the shares you're not losing your capital and hopefully you're actually making a capital gain. So then it's all about what happens next. Uncle D suggests that the future for the combined businesses looks good, and if Mondi do need Smiths more than the other way round, maybe the offer will be good for Smith's holders. That's what we have to wait and see for: how many new Mondi shares will we all have instead of Smith's? Then you can assess how much your new shareholding will bring in dividends by looking at what was paid last time. If the synergies work well and business is good, that dividend could rise, but that's speculative thought. It's only then will you be able to start evaluating whether this new scheme works for you and you hold on, or decide to pull out and invest elsewhere in whatever shape or form. Good luck.
I think there would be good synergies and savings to be made in the merger and I think both companies are undervalued at the moment. When inflation and interest rates come down both could rerate upwards. I also think MNDI need SMDS more than SMDS need MNDI. Anyway, I'm really not bothered if the merger goes ahead or not. If MNDI do put in an offer (or equivalent) it would probably (to avoid time wasting) have to be ~375p at which point I'd expect SMDS to reject it and the SP to close that gap to 375p. Then MNDI might come back with a more reasonable 400p deal which maybe worth considering. Either way should be good for the SP here at SMDS and may attract other predators to have a sniff. If all comes to nothing then SP may fall back to undervalued territory again but I still think SMDS has good prospects backed up by a juicy dividend. With more and more high street closures , which seems likely to continue, there is more and more scope for increased demand in packaging solutions. All IMHO and DYOR.
I only bought SMDS last year, but I aim to buy for the long term, so the question for me is whether the merged company (if it happens) has as good prospects as SMDS has on its own.
I don't feel like doing any research into Mondi, so I'm tempted to just take a profit and run. On the other hand, I've been trying to follow a policy of not making a change to my portfolio unless I have a high conviction that I'm doing the right thing. (In the past I've made too many changes.) The trouble with a merger is that it forces a change on me, one way or another!
Thank you for all your help and advice so far. For clarification I have no ‘emotional’ ties to DS Smith. I invested money in them, they split the shares, and then they went up again. This meant I could withdraw my initial investment and have been paid dividends from the remaining shares for the last 10 years. I understand about people’s opinion in diversifying my portfolio but investing in other companies is something that I have no desire to do currently as I have little to no experience in share dealing, or time for researching.
The shares have risen and fallen over the last 10 years but one thing that has remained consistent is the dividends. Therefore share price is currently irrelevant to a certain extent as I am happy just taking these payments twice a year and was more interested in peoples thoughts of this continuing?
Sorry meant to say "undervalued by the market pre-bid RNS"
Someone mentioned in an earlier thread I think c375p perhaps that's more reasonable expectation of any bid?
Hi new here.
Just wondering what are people's thoughts on the potential bid price from Mondi - should one materialise.
Does anyone think it could be as high as 400p..around 22% premium to Fridays close price?
Realise that's around 43% premium to the pre-bid approach RNS so maybe c400p is unrealistic?
Intrigued why Barclays chose now as the moment to slap significant SP upgrade on the stock. Do feel like the company was undervalued by the market pre-market though so if Mondi based their takeout price/premium on that would be getting an absolute bargain.
Thoughts anyone?
Thanks