The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
From today's FT:
Who are Anglo American’s possible suitors?
https://archive.ph/Rohha
I'm not sure how Capita is 'ripe for a takeover bid'. All of the most lucrative bits of this business (i.e. those with growth potential) have been sold off. Let's not forget that the original turnaround plan was for Capita to offload the parts of the business they are now left holding. These leftovers might be saleable post-administration, but it's hard to see anyone wanting to pay good money for them at the moment.
Capita's only hope now is to slowly haul its behind into profitability, while not making any major blunders (which, as everyone knows, is a big ask with this company). That may be achievable, but it might also require further fundraising, which will drag the sp even lower.
Gertfrobe. Sirius Minerals went bust four years ago and sold the project to Anglo, so quoting the former is pretty irrelevant. Anglo’s completion timeline has been a little more realistic. I’ll be happy if it’s up and running in a couple of years.
With dire forecasts about global agricultural soil viability, I think Woodsmith has the potential to be a huge money maker for decades to come. As a division of a traditional mining company, it probably is a bit off-the-wall, but I think it would be a mistake to dispose of it, especially given that the project is relatively close to completion. Instead, pump more money in to getting it completed and into production.
There are a couple of articles in The Sunday Times regarding further possible Anglo takeover scenarios. The prospect of a Glencore all-share merger with Anglo, without the conditions that complicate BHP’s offer, sounds particularly attractive.
Glencore is the predator to watch as Big Aussie stalks Anglo American
https://archive.ph/iSHFP
Inside BHP’s Anglo American bid: the £31bn tug of war over copper
https://archive.ph/mbhwu
Nudged past £27 for a few minutes today. Let’s hope it’s a sign of things to come. Surely an offer of £28-30 can’t be far off - and it may not be from BHP.
Or perhaps BHP have come straight back with £28.
I wonder of Rio or Glencore have pitched in with a counter bid.
I was lucky enough to buy into BHP at £16 during Covid. With dividend reinvestments and my Woodside spin-off shares, it has been a two-bagger and isn't far off that, even now. I wasn't so lucky with AAL and caught a falling knife at £24, but hopefully rising takeover bids will rectify that. I'll be pretty relaxed even if the takeover bid(s) come to nothing. I have also held Rio for 6 years now (also a two-bagger), so diversification-wise, I'm pretty much at my capacity for miners. The dividends are compelling though.
£28-£30 seems to be the realistic range that financial analysts are talking about. Anything less probably is not worth the hassle. Given the cyclical nature of miners, AAL could easily be nudging £40 again in a couple of years’ time, especially with Woodsmith online.
My only reservation about the merger is the prospect of holding shares in the spin-off companies, which makes portfolio housekeeping a bit messier. Also, if and when the time comes to sell, it means more transaction fees.
Savage_KeyboardR
I think you need to reread your own posts.
You are clearly conflating macro-economic government policies, which affect all large companies (most of which haven't seen an 90% drop in market cap in the last 5 years) with specific government actions toward a single company (e.g. a decision by a future Labour government not to renew Capita contracts). These are two completely different things, which you seem incapable of comprehending.
Given that the sp leapt by 4.45% just before close, the market appears to have got wind that something was afoot here.
I hold BHP and AAL. I'll be quite pleased if a merger does go ahead, as I think the consolidated mining behemoth will not take long to become more efficient and valuable than the two separate companies.
S_KR. So, it is the government's fault that Capita has been such a $hit show for the past few years? Plenty of companies (including outsourcing firms) have managed to hold their own over the last few years, so I'm afraid your argument simply does not hold water. (I don't support this government, by the way.)
If my position is 'curious', yours is utterly bizarre.
S_KR. You seem to have completely misunderstood what I have been saying, so let me put it in simple terms.
Capita have performed badly for the last 6 years (hence the current sp). They are, by most measures, a failing company. Things may not get better for Capita under a new government. Indeed, they may get even worse.
Savage_KeyboardR. No. The Conservatives have been largely supportive of Capita. They haven’t exactly been cheering them from the rafters, I know, but they have been content to leave a things as they are, with little intervention, probably content for Capita to take any flack, so ministers don’t have to. Capita’s problems (COVID excepted) have been mostly of their own making.
I’m not sure Labour will be happy to continue with this ‘hands-off’ arrangement and may see it as an opportunity to be more proactive regarding public services.
Culley01. As I’ve said before, it may not happen at all, but it is another risk factor. As far as insourcing is concerned, Labour policy appears to be to take the best examples of in-house services provision and use them as a template for other councils to follow. So, for example, the Brent plan might be promoted more widely and enthusiastically under a Labour national government. As I say, bashing Capita is unlikely to be a vote loser for a new Labour government seeking ‘fresh’ ideas.
Trisor. I didn't claim it was breaking news. It merely serves to illustrate what may happen on a wider basis, with a Labour government in power (which is all but inevitable later this year).
As I mentioned before, we might see a lot more 'insourcing', once Labour get into government. It is yet another risk factor for Capita. Let's face it, Capita are generally loathed by the press and public (admittedly, not always fairly), so Labour can probably smell votes to be gained here.
"Insourcing win at Barnet council
Over 300 staff in a variety of services like trading standards, environmental health and other regulatory services, will now be transferred back in-house
Staff at Barnet council are due to be transferred back to council employment thanks to a decade-long campaign by UNISON.
The 330 affected workers are currently employed by outsourcing multinational conglomerate, Capita, and are being brought back in house after the council was used as a test case for the outsourcing of local government services.
The staff who work under a joint venture called ‘Capita Re’ in a variety of areas like trading standards, environmental health, planning highways and other regulatory services, will be TUPE transferred back in house on 1 April this year.
In 2012, much of the service provision at the council was outsourced to Capita on decade-long contracts by the Conservative-controlled council, with the intervening 10 years marred by several controversies including a multi-million-pound fraud and contracts running vastly over budget."
https://www.unison.org.uk/news/2023/01/insourcing-win-at-barnet-council/
No AimMaster, I have mentioned losing on that investment several times over the last few months (they are there for everyone to read, it they are that interested). Yesterday was the latest mention, that’s all. It represents about 0.3% of my portfolio. Of course it’s annoying, but also a reminder to spread your risk across a range of sectors and companies - and not to go chasing your loses in a failing business.