get on your pony24 Mar 2010 10:45
Time to get on board if the chart bconfirms a buy yhis week. why? (DYOR)
Everyone knows why the recent action and volatility. So, the disappointment when Shanks rejected the insulting Carlyle bid. But look again at this newswire from December:
"LONDON (Dow Jones)--U.S. energy company Covanta Holding Corp. (CVA) is interested in buying U.K. waste management company Shanks Group PLC (SHMCF, SKS.LN), the Observer reported Sunday without citing sources.
The paper said U.S. private equity firm Carlyle Group LP sparked interest in Shanks last week with a GBP536 million bid.
The Observer said other companies such as Sita UK Ltd. and Dutch waste management firm AVR are expected to be interested in purchasing the company as well.
Web site: http://www.guardian.co.uk "
So, the company is in play because the Board has stated it would accept 150p/share. Carlyle's initial interest was at 135p, or $2.25. With sterling's fall, that would now equate to 153p.
So OK Carlyle offered 120p, but this is a common ploy. It worked with Silentnight, but not with SKS. And yet... 120p in december would now be 136p...not far off.
So the next thing is L&G's position and the shorting by funds. From the moment SKS was in play, it has been splattered by short positions, who have made their money and gone.
No short positions have been reported since 11 March. So, while L&G has reduced its position from 16% to 5%, that's where the shares have gone...to close out the shorts. Meanwhile, Schroders still have 14%.
Finally, all the analysts have a buy and Goldman Sachs raised them to buy, with a target of 159p AFTER the Carlyle bid was withdrawn.
Easy money for the patient?
DYOR