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Where do you see 26th of March? I only see 28th of March as the release date when I click on the link and register for the call

A bid required to be made under Rule 9 of the Takeover Code, broadly where: any person acquires an interest in shares which (taken together with shares in which the person or any person acting in concert with that person is interested) carry 30% or more of the voting rights of a target company; or if a person, together with any concert parties, is interested in not less than 30% of the voting rights but does not hold more than 50% of the voting rights and increases its interest in shares.

Rule 9 requires a mandatory offer to be made in cash (or be accompanied by a cash alternative) and at the highest price paid by the bidder or any concert party for any interest in shares of the relevant class during the 12 months prior to the announcement of the offer.

https://uk.practicallaw.thomsonreuters.com/7-107-6806?transitionType=Default&contextData=(sc.Default)&firstPage=true#:~:text=A%20bid%20required%20to%20be,or%20if%20a%20person%2C%20together

I don’t think it’s surprising that we continue to drift lower as long as they haven’t announced a new earnings date as this just increases uncertainty and people will fear/expect even more negative news…which potentially could indeed come.

However, it is also possible that they will announce potential interest in the US unit or even at MCG as a whole. Though that’s not my base case, it is certainly an upside risk.

The only reassuring thing is that Cosmens have been adding lately…surely they know more than we do…also the nee MCG bond continues to trade fairly well around 100.

Jefferies estimates it to be worth £1.3bn ($1.6bn)…so anything around there would be a decent price

Well I guess it’s easy to get frustrated with this price action, especially with so much uncertainty and earnings yet to be rescheduled…however cosmens adding to their stake around current levels is certainly at least a bit reassuring

It certainly has been frustrating over the last 2 years to hold this share and average down…big picture fundamentals still seem favourable but market seems to disagree and management is not really helping either at the moment…that being said, I am still hopeful that we will turn the corner and the upcoming report doesn’t present any further nasty surprises…will be interesting to see if we still report positive fcf etc

Mary, do we really expect them to pay / announce a dividend again after just cancelling it?

Seems to be the translated version of the below article

https://www.larazon.es/economia/asalto-espanol-mobico-matriz-britanica-alsa_202401066595276b872b82000110153c.html?outputType=amp

“ We have £1.2bn in net assets (net of debt) so arguably our share price is worth £1.70. Things have changed since half year so no idea what they’d be worth now”

While factually correct, the problem is that around 1.5bn of that are intangibles which are arguably worth zero…atleast most value investors set this number to zero when trying to account for the value of a companies asset. Nevertheless, I am also convinced that this share is just way too cheap and will keep adding below 100.

Tx WT, wasn’t aware of this. Do you know when this was announced first?

Https://www.mobicogroup.com/media/news-releases/2023/mobico-group-s-spanish-subsidiary-alsa-mobilises-intercity-services-in-saudi-arabia/

Not sure how much of the 500mio Mobico will receive but surely another sign that the underlying business is doing ok

*Alsa

“Alda commissions Goldman Sachs to sell its school buses in the US”

They aim to raise EUR 1.7bn…analysts expect $1.5-2.0bn…surprised that stock doesn’t react positively to this news…certainly would help to restore the balance sheet

@paddyboy, there is a big difference between market cap (share price * shares outstanding) and enterprise value…mcg currently isn’t valued at 390mio…it’s

Valued at around 1.5-1.6bn…so if anyone was to buy the whole company…that’s what they would have to pay (they would have to take on the debt as wel)…for whatever reason NA school bus businesses tend to trade at a premium…hence the boards move makes sense….if you read through recent annual reports they also tend to see the majority of upside in transit…

Further, it’s not a distressed sale…we still show a decent operating profit and positiv or cash flow. I am sure the board did their homework and had received previous indication of interest to have a realistic ballpark number in their minds that would make a sale attractive

Here are my few cents on the potential sale.

Prior to a sale it was important for the board to get its house in order and reinstate the majority of routes (now running 97%). Further, they installed a new experienced management. The additional 5-10mio were likely spent in order to aggressively hire new drivers and speed up this process. As other mentioned previously...any sale last year would likely only have brought in a fraction of its long-term value.

As the board mentioned, school buses are very desirable in the PE / alternative investment world. They usually sell around 9-10x EBITDA (such a First Student). When First Student was sold (roughly around 3.5bn, the other 1bn likely accounted for First Transit) it was operating around 40,000 school buses (NELCC operates around 22,500).

I didn't find the exact split in revenues but in the 2019 annual report it stated that school buses accounted for 69% of the overall NA revenues...assuming the same split is roughly accurate (lets assume 65%) 2022 revenues would have been $840 and $55mio EBIT. Given the anticipated strong growth (due to reinstatements) let's assume we have a EBIT of $75mio in 2022 (compares to $109mio in 2019). Assuming EBITA is about 2x EBIT (likely higher but lets be a the safe side) this would equal to $150mio. Given capital is a bit harder to come by these days, let's assume someone was only willing to pay 7x EBITDA, this would lead to a bid of $1,050 bn (on the conservative side). On the high side we could argue to the 2019 assumed EBIT of $109 min ins more normal (prior to covid) and would equate to an EBITDA of around $220-250mio and fetch the same multiple as Firstgroup...we would see a bit of as high as $2.0bn. While $2bn might seem incredibly high vs current market cap, this would be in line with the vehicle ratio during First Students sale ($3.5bn for 40k vehicles vs 22.5k vehicles for NELLC).

There are a lot of assumptions here, but all that being said I don't think the board would even entertain any offers below $1.2bn (roughly GBP 1bn)...assuming an offer of GBP 1bn...this would leave us with net debt close to 0 but would still leave the hybrid.

Let me know what you think. Tx

*ebit Numbers

Does anyone know if the expected ebony numbers of 170-185 is statutory or adjusted ebit…as we have seen lately there is a huge difference

It has printed. Was placed at a reoffer price of 5.01% with a coupon of 4.875%…was initially 2x overwritten. Pretty decent outcome imho

Will be interesting to see if the new bond yield gets published/priced today…guidance seems to be for eur swaps +1.9%…so just below 5%…let’s see

That was a while ago. Markets move. Given there is such a gap between uk and EU rates now they seem to have gone for the lower interest bearing bond. It will be much lower than 5.5% regardless of what they may have indicated. Uk 8y gilt trades at 4.3% vs german govie at 2.6%…hence the difference…a uk bond would probably have been closer to 6%