Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
RNS:
International Distribution Services plc today announces a delay to the publication of its financial results for the 53 weeks ended 31 March 2024, previously planned for 23 May 2024.
The Group's auditor, KPMG, has requested additional time to complete the usual standard procedures after their internal reviews were late in the audit timetable, thereby delaying their final audit process.
The Board confirms that it expects adjusted operating profit (excluding voluntary redundancy costs) for the 53 weeks ended 31 March 2024 to be broadly in line with previously published guidance.
A further announcement on updated timings for the publication of results will be made as soon as reasonably practicable.
Sid, It would certainly inform Kretensky that the projections he has based his bid on are being confirmed. He will have many ducks lined up.
And for the average holder it would take a lot of the risk out of the deal possibly failing, if there are strong results and an economy on the uptick as a backstop.
Sid876, agree with you re Atos rejection, Krensky's resources can now all be directed at IDS. Another major event is UK CPI tomorrow forecast to come in at 2.1%, huge drop compared to last months reading of 3.2%. This is getting very close to interest rate cut territory, and will certainly be a part of Kretinsky's major considerations.
NOFEAR, very interesting article. If I understand correctly, there are mathematical formulae arbitrageurs use at particular stages of the takeover process in order to measure the likelihood of a deal going ahead or not. The implication is that the current 320 sp is set against the proposal price of 370p and the result at the moment estimates a 60% chance of the deal going ahead.
Also, because the govt. has not discussed changing the USO, the vulnerability and effect on RM's viability this creates are what is giving Kretensky the opportunity to get IDS at a bargain basement price. If that were sorted out IDS would be worth £4+, and would probably continue to trade on the LSE generating healthy dividends. Talk about shooting yourself in the foot.
@Hounddog, thanks for clarifying what kretinsky's options are and the necessary % of votes each of the options require to give him control. To me it appears that the scheme of arrangement is the way he will go. However, it could be quite a big ask to get a 75% yes vote from those who do vote.
If, as you say Kretensky's personal holding of 27.6% is disqualified from the process then the voting rights attached to shares eligible to vote becomes much more heavily weighted. i.e. 100% of the vote will be represented by 690 million shares. As an example, Redwheel have approximately 50 million shares, which is around 5% of the 950 million total ids shares. However, when it comes to a vote without kretensky's 260million shares Redwheel will have 50 million of 690 million shares, which would represent approx 7.2% of the vote. Redwheel I believe stated that GLS alone was worth 350p so may be against the proposal.
The result is by no means clear cut and there is certainly risk attached to sticking or twisting. The only certainty is that if you sell now you will know how much money you made. If you hold there is potential for either a big upside or possibly larger downside.
Things will be clearer at the end of this month when he makes a binding offer, because so far he hasn't put any money on the table.
If takeover fails, 2p dividend is one reason it could tank, though I very much doubt it would drop as low as 220. Results in a week would likely have biggest effect on where sp settled. Foreward looking statements should be interesting in a world of ifs and buts. Whatever happens Royal Mail has rarely been dull and often a great learning process.
Not much time left so the new bid has to be good enough to get large holders to align with kretensky. The next one on the deadline to carry the rest. I reckon it's about 688 million shares(72.5%) that he doesn't already own. If he increases his bid by £1 per share from 320p to 420p it would cost him £688 million. He know this is probably his only chance to buy GLS and RM. He made a lot of money last year. He understands the perfect opportunity has a context and he will see this as the moment.
Hurtsparrow as you say, 'if the article can be taken at face value'. I'm inclined to believe the essence is true, the Telegraph is very well connected and it wouldn't be wise to provoke their ire at such a delicate stage, rather give them the heads up that there have been discussions.
The fact that the board and Kretensky are having discussions, and that Kretensky has given fairly wide ranging assurances suggest that the door is open. Redwheel, who have around 5% of IDS equity said after the first offer that GLS was worth 350p on its own, and on that basis I think his final bid will be north of £4.2.
He has a war on his doorstep coming ever closer, and gas pipelines are very fragile. I think he would really like to have his money invested in a safer part of the world.
Appreciated hurtsparrow. This section of the article was particularly interesting:
"The board of Royal Mail has held meetings with shareholders in recent weeks as it prepares to mount a defence against the approach.
But in a sign the company is softening its position, Royal Mail executives are now understood to be discussing the potential undertakings that would be required from Mr Kretinsky if any future bid were to be accepted.
These are understood to include guarantees around jobs, as well as other politically sensitive issues such as the Royal Mail brand."
Hurtsparrow, not subscribed so only read the headline promise of no job losses and his intent to launch a fresh bid. He's tested the water with his first attempt, bid number 2 will be at a price judged to gain allies. Bid number 3 to clinch it?
Isle, 'It wasn't so long ago that Daniel said he had no intention of making a bid for IDS. Now, this makes him a liar for stating that.'
Kretinsky may have not have had the intent to make a bid for IDS when he made that statement. None of us know his intent, and none of us would be so rigid as to hold ourselves in perpetuity to something we said last year if our circumstances had changed significantly. Correct me if i'm wrong but didn't his companies generate £3 billion profit for him this year? I think it's reasonable to assume that what was true for him last year no longer holds, and I would find it difficult to call him a liar. More of a fluid businessman.
Money, Kretensky should be a lot closer to understanding how much the institutional holders are demanding. For the last year market value of IDS has been based on an sp of around 250p. A large part of the perceived value of IDS is based on potential and being at the starting point of a more stable economic period; an updated USO saving £x amount per year, CWU showing signs of working with management, inflation controlled, interest rates due to fall, an economy on the upswing, consumers spending more. Tangible assets are measurable, but future potential of the business is
where the wrangling re perceived value of IDS will be focused, and where the positions of buyer and seller will need to come together to make a deal.
Money, if that's kretinsky's best game of poker with the hand he's got I'll be both surprised and disappointed, unless his next bid is all in at £4.50+. Kretinsky has proven to be the real deal and made a lot of money dealing with some probably very unpleasant Russian oligarchs. He's also spent a lot of time and money to get to the position to possibly own a company he really,really wants. So far everything that has happened has been very predictable, a seemingly deliberately poor offer rejected, which I am sure kretinsky anticipated. The only thing that I don't understand is why he has let the clock run down for so long without another bid. It will all be revealed very shortly how he intends to play this out, the ball has been in his court for 16 days. Could he have planned for 2 more bids? I think there is that possibility and there are still 12 more days to the deadline, and yes, this is probably the only chance he will ever have to own GLS and a quite possibly resurgent RM.
Isle, Kretinsky really wants to own IDS. Everything that has happened thus far that is in the public realm is as he anticipated, he hasn't given up, just playing his own game.
LDB, I think if Kretinsky was to pull a stunt like that the Govt. would take a serious look at his behaviour and question whether he is a fit and proper person, and if he can be trusted to own a company listed as being important for our National security.
I'd love to know what Kretensky's been doing since his initial bid was rejected. The clocks running down and almost half of his allotted time has been used up. We know he will have done all due diligence before he made his offer. He's also extremely serious about owning IDS and has spent around £1 billion positioning himself and made his bid when:
IDS market valuation close to historical lows; GLS consistently profitable (£350 million p.a); R.M. becoming increasingly competitive; CWU far more compliant, finally realising strikes don't make the brutality of competition go away; R.M results will be good, market valuation of IDS will reflect this and will increase; U.K economic outlook improving , with interest rate cuts anticipated in the not too distant future.
Kretinsky knew all of these things at the outset of his offer, which he knew would be rejected. He also knew what his next offer would be and it was already financed when he made the first offer.
He will have been searching for allies amongst institutional investors, but this could be a game of brinksmanship that may go all the way to the wire.
Currently Kretensky owns 27.5% of 950million shares, which leaves approximately 690 million shares that he needs to finance the purchase of. His current bid of 320p will cost him 2.2 billion to purchase the outstanding 690 million shares he doesn't yet own. A new offer of 385p would increase the cost of his bid by 65p per share, which would be approx £450 million on top of the 2.2 billion of his initial offer for a total valuation of 2.65 billion for GLS and RM. This is still not a serious bid and will be rejected. I think his next bid has got to be above 400p before he gets any allies amongst the institutional investors, and higher still for a successful bid.
Mike, Kretinskys been building a stake here since at least early 2020, when the sp was totally bombed out sub £2. Difficult to divine whether or not he has always had the long term goal of taking over IDS, he has however continued to build his stake until he is now in the current position of being able to launch a bid at the time of his choice, i.e. cheap share price and positive alignment of IDS's particular position and that of the wider economy. This is precisely the time he should be making his move and he has been waiting for this moment. Kretensky knows £3.20 is way off the mark. He knew it would be rejected, the response has been registered, and seems to be somewhere around £4.50. Kretensky will be making another offer and knows he will never have he opportunity to own GLS and RM at a better time or price. He has until 15th May, he hasn't got himself into this position just to make a disparaging offer then throw his hand in, and I think if his next offer is not £4.20+ he may well have thrown the opportunity away.