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Explains the rather unexpected rise in the LGEN sp today, despite the dull mkt background generally?
An 8% tax - free yield as things stand will be extremely competitive when it comes in and even more so when interest rates decline and there aren't many 'reliable' yielders like this one available, either.
Just a thought - sasa.
Hi jupiter - I read somewhere recently that Amazon were keen to secure their own cardboard box supplier - maybe they're looking at this situation, too?
A cash deal would be 'small change' for them, after all - sasa.
my comment on the t/o situation here wasn't a prediction, alessandro, it was a guesstimate of what might transpire - a big difference.
there are several variances at play now on this being the 'put up or shut up' day - e.g mondi's original preference was for a ************** offer but this could change by either being accompanied by a cash underwriting, too, or an all cash offer to gain acceptance by the d s smith board and there might also be a request to extend the deadline to facilitate a deal or nothing at all, in the event. we'll soon know...
it's interesting to see the sp picking up sharply this morning if nothing else - sasa.
Hi Oldfortyniner - it does seem the mkt doesn't think anything much will come from Mondi's approach, judging by the rather listless sp ahead of tomorrow's deadline, I have to concede but you never know - sasa.
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.
Hi TDT - yes, the positive 'Contango' effect seems to be underpinning Andrada's sp right now ; it's a pity the list of lithium stocks are largely Aussies but if AV soon releases a positive statement re: the partners' discussions which have been going on for quite sometime now, the shs should finally head North for a change!
Tin, too, is holding up pretty well and there 'ain't many producers of that crucial metal around at present, either - bodes well for our little known gem here, all being well... sasa
Okay, we soldier on, then, at best hoping that Serica will finally wake up and get involved in something meaningful overseas before an even worse Govt. gains office. GLA of us - sasa.
I thought you'd sold up and moved on from this one, upomega, given your growing disenchantment with the outlook for Serica which, admittedly, is shared by many of us on here, including yours truly - sasa.
Echo that, Wilthew - I've been banging on about that, too, along with the 12.5% yield as things stand.
Trouble is the present management are uninspiring, nay, deemed to be lacking in dynamism and ceding much too much to Mercuria, vis a vis the Tailwind deal, especially with the 25% + voting power they now have.
Sentiment is crucial where AIM shs are concerned and one can only hope that an overseas acquisition to change that might yet be announced before the next election; the present Govt. is inept enough with their 70% total tax rate on domestic upstream O&G companies - sasa.
Agreed Alavib but there's no denying this ops. update is at best mediocre / disappointing, bearing in mind where we've come from under a plodding CEO performance over the past year or two and it's as well changes are now afoot and more imaginative leadership beckons, one hopes!
With the sp having fallen heavily today, I guess we're now in the 'capitulation phase' which often prompts a swift rally soon afterwards - certainly the present stats (13% yield and 3 x p/e on last years figs) discount a helluva lot at this level, so no need to panic; just contain your frustration for now if you can? - sasa.
Agreed, chinch - the transformational BKR deal was all of ACW's making and, perhaps, the only misjudgment was bringing back MF to run the much enlarged group, culminating in the Tailwind stranglehold we're in now.
Still, Serica can hardly become a 'dog of a company', ex MF, given our financial clout today - more likely the possibility of appointing a more imaginative leader to get us overseas orientated at long last with a bit of luck; that's my / our hope, anyway - sasa.
Hi LOTM - thanks for this which I would have probably missed. Having waded through much of it (a normal summarised version would have been easier to follow, tbh) but overall, I agree the Nos look quite good to me, too.
The outcome of the 'review' of the port ops / possible offers for this business, remains the main support of the sp at present, I guess, which we all await with interest. Presumably any deal will be around the present NAV of £14 ps odd for it and if so, how will the proceeds be utilised?
A return of capital and / or a special 'one off' dividend or tipping much of it into OWIL with a smaller distribution to shareholders if an agreement is reached? Given the family control, the 'Hedge Funds' portfolio could be liberally infused with much of the cash and then we'd wind up with a quasi investment fund to run on with...
Any thoughts on that? - sasa.
Hi NewK - yep, Mercuria remains the 'Achilles heel' here, unfortunately, as most LTHs agree, I think...
It would be nice to think that Serica's acquisition rationale might now have changed, post Tailwind, given MF's recent reiteration that they're genuinely 'still looking for an overseas involvement' rather than any ultimate cash stripping exercise, per se...
That would be very well received by s/holders if it transpired but he seems wedded to only operating on his 'home turf', unfortunately, which blunts the best chance of gainfully using our strong balance sheet / new RBL facility, etc., I fear.
Our very low mkt rating of a pros p/e of 3 or less / yield of 11% odd rather says it all, sad to say. The difference between good / imaginative management and ineffectual leadership, as I said the other day, remains stark here, unfortunately... sasa.
More likely, Mitch is gearing up to buy some NS production from HBR - he seems only able to consider such short pay off deals and LC would be a willing seller to further reduce their domestic involvement, I'm sure - sasa.
Agreed, rylidan - Andrew Bailey was also 'asleep at the wheel' when he ran the FCA prior to becoming BoE Governor (failing to step in to investigate / enforce regulation of several scandals back then and clearly he and most of his members of the MPC forgot to consider 'fiscal drag' when they raised rates so rapidly, after initially stating that the early rise in inflation was 'merely transitory' and nothing to worry about.
They seem to be unable to grasp, even now, that fiscal changes in monetary policy take nine months or more to filter through the economy to show their effect; incompetence in both directions it seems. The Fed's recent record isn't much better, either, on this front, tbh but, at least, the US economy has been much healthier than ours, so easier to absorb the influences of ignoring the 'fiscal drag' effect for them - sasa.