Member Info for Redtom

A month ago Numis upgraded MF with a 2840p target. A month later (ie today) they downgrade to 2100p. And the rpice as I write...845p. Brokers really do not add value for anyone. In fact they mislead people most of the time. Who pays these people and why?

Nice to see that a Director spent �300k on shares. This is a positive sign in some respect. But it also confirms that there is no takeover activity currently ongoing despite the rumour circulating in the press.

The SP exactly a year ago was �48.73. What a difference a year can make to one's fortunes or misfortunes in this case.

Mulder, I almost started to think that there might be something to it when the SP shot up another 100p this morning but the subsequent drop of 80p from that high point brought me back to my senses!

Mulder, yes it was but not someone I would trust implicitly!! Almost certainly the same old rumour circulating last week.

Agreed. If your investment is in an ISA or SIPP then I see where you are coming from. But whether it is 'divi income' or still in share price, makes little difference. The share price generally drops by the smae value of the dividend so if you sell 2 days before, your investment is worth more that it would be 2 days later. But 2 days later you also have the divi. So if no tax on divis nor capital gains, you should be indifferent as to whether you get divi or not.

Beware, I don't think so. The dividend is tiny (21.5p) so this is unlikely to influence anyone's buying/selling. Also, why would people want a dividend. I would rather buy on the 9th so as not to have a taxable dividend.

Based on the SP performance this morning (ie normal service has been resumed), there can be no truth in the rumours at all.

Please take this with a big pinch of salt. But I did hear a whisper over the weekend that a bid at circa �49 was WIP. Naturally I can't verify or confirm anything. Almost certainly a re-hash of the existing rumour from last week (ie with little or no substance) but it seemed a bit of a coincidence. And this time with a value. Again, very wishful thinking on my part but, as mentioned before, if there were any truth in it, the SP would not be �32 for long. Don't shoot the messenger here and don't give it too much credence.

If (somehow but I doubt it) the rumour is true it would be very interesting to be a fly on the wall. Any buyer would want the endorsement of the BoD of target. To get that the BoD would have to extract a price that they deem acceptable to shareholders. Without an agreement, the suitor is likely to back off. But with a current price around �30-32, I can't imagine a buy wanting to pay more that a 25-30% premium. This would be around �40. But given SP has been in 40-50 range for last few years, the BoD would have to push for �50+. For buyer, �50 would be a huge premium of approx 60%. A dilemma for both buyer and seller. Another reason why it is unlikely to happen just now.

Normal service has been resumed.

The fact that we hit �33 earlier but now showing a loss for the day probably tells us how good the rumour was, ie no follow through as it has no substance. Shame.

Pharmaceuticals giant Shire leapt 113p to �32.22 after rumours resurfaced that it is once again in the crosshairs of a bidder. Whispers that US giant Pfizer was readying a bid for the FTSE 100 company swirled the City in December and it has been left vulnerable to a swoop by a 41pc share price decline in just a year. A price tag of around �50 per share was again being mooted for the long-standing target, lifting it away from its lowest level in over four years.

Where-is, There definitely is a rumour but I don't think it has much creditibility as, as you say, it would go up a lot, lot more if there was an inkling of truth. The article merely said that the rumour came from someone 'with knowledge of the matter'. Sadly only BS. Would love it to turn into something more substantial. If the price got into the high 30s in a few day, then I would reconsider my view.

The rumour was started by quote " a person claiming to have knowledge of the matter'. Oh, then it must be true. A person who claims to have knowledge. Whoopity Do!!!

This has a BS smell to it. Typical rumour speculation. Jumps 5% then starts to unwind down to 3+%. Nothing of substance to back it up and it will drift and the rumour will turn into nothing. How many times have we seen this with Shire.

notgreedy, I like your style! What would be your best tips at the moment?

I'm sceptical about a bid. There has been rumour after rumour in the past and nothing comes of it. I don't believe a word of it.

I would look at future cashflows and discount them back. Things like goodwill and intangibles are meaningless as they have no cash impact. They reflect accounting from past transactions. Write them all off - it would make no difference. Based on the the DCF valuation, yes I would buy this up to about mid 40s but only using current assumptions that are out in public domain. This is nothing like clln in character - if you genuinely think they are similar in financial character, you should stop investing for ever. The business model of clln & SHP are poles apart. Seriously? You let yourself down with that one.

notgreedy, You're not being fair in your comments here. Some of the liabilities are trade creditors ($4bn) yet you ignore current assets like receivables and cash. Some of the liabilities are deferred tax (5bn) which is purely an accounting item, not a true liability. Most purchasers would 'disregard' most of the intangibles/goodwill so this makes little difference. Buyers will look at cashflow, longevity of licences and not 'non cash' accounting entries. I'm guessing that you've not worked in an M&A department?