Firering Strategic Minerals: From explorer to producer. Watch the video here.
Oli, Kretinsky was supposed to be meeting Badenoch the business secretary in the middle of last week. Unsure whether it actually happened, but I can't find any news about it. Perhaps the irrelevance of such a meeting sank in with Kemi. As for Braverman, i think she was last sighted somewhere near the north pole.
Red, I was referring to the possibility of numerous shorts of 5%. At the moment I think the new disclosed short is at about .9%, which to me is an opportunity rather than a sign of impending existential disaster that a short position of say 15% would be.
Last line should read: "so that workers can have a stronger voice in the governance and strategic direction of the company", those subs buy the CWU a lot of influence with labour. However, relationship between unions and management is closer in Germany, so unions having more of a voice won't be a new thing for Seidenberg. What may be different is that German unions are more pragmatic compared to a Dave Ward led CWU.
I wonder how Kretinsky will measure the risk of recent events. He's talking with Badenoch this week, which will most likely be irrelevant.
Also the compensation for abuse of market position claim from Whistl has raised it's head again. IDS seem to be discounting the claim, but it may have merit since Royal Mail have had a court case go against them on this.
Derek, would the possible takeover of IDS be important enough to get into the manifesto? Probably, but only because there are tens of thousands of CWU members working for them.
Also in the news is that kemi Badenoch has a meeting provisionally scheduled with Kretinsky in the middle of next week where they will hold talks.
JB, medium term there is a heck of a lot of uncertainty and a couple of notable milestones, i.e. the vote on kretinskys offer, and how a labour government will apply the National security legislation to kretinskys planned takeover. CWU fund labour big time, so labour owe them which also complicates predicting the outcome.
Sessa will have done their research and will have people who know people... so whether they are being brave or just have the right connections is any ones guess, but the shorts seem to always be a step ahead and come out on top.
I think many LTH's are having a conflict re whether to see it out to the end with possibly an increased bid, or sell up for a big profit, no more risk and the possibility of a big upside if the deal doesn't go through.
I'm not exactly sure when the shareholder vote is due to take place, but it's more than 3 months away, so this short certainly adds a bit more spice, has time to play out and will influence a few waverers.
Brendy, agreed, if he's knocked back by the II's he will probably bid higher. He's come too far to let a couple of hundred million £ derail things. An extra £200m would be enough to increase his bid to 400p, which would carry the vote. Still got to be vetted on National security grounds though.
If he is allowed to buy IDS the dynamic and who's calling the shots on the USO would change, and he could argue that the USO has to change because it is clearly putting the viability of the company in doubt. It would be impossible for ofcom to argue against that because it's evidently obvious the USO is the biggest obstacle to IDS making the profit it needs to in order to invest and modernise the company, which I believe he wants to do. I don't believe he wants to asset strip and make a fast buck, rather he wants RM to be making hundreds of million year on year to rival GLS. He's a smart guy, not a moron, got a foot in a dozen countries via GLS , and a successful business model with scope to scale up. He's a billionaire he's aiming to make more billions, and he see's GLS and RM as a big part of achieving that ambition.
Seidenbergs proposal for the future of the USO was released on the 3rd April. Two weeks later on 17th April details of Kretenskys bid were released. Seidenbergs plan is a good one and does not need to go through parliament.
The USO in it's current state is the main reason for RM persistently losing money and is thus also hobbling GLS. Sort out the USO, RM comes into good profit. Kretensky knows he could make serious money year upon year with IDS if only the USO were to take into account real world conditions re the declining trajectory of letter volumes. It will certainly change sooner rather than later, 1 year, 2 years time?
Its no coincidence the future proposal for the USO, and kretensky's bid have happened at the same time.
I think Kretensky certainly has the money and also the inclination to up his bid, armed with the knowledge that the USO in it's current form is on borrowed time.
It's approximately 650 million shares he doesn't own, so every 10p increase in his bid would cost him an additional, one time cost of £65 million. He has planned for the eventuality that the vote could be close and will have been sounding out the positions of the major investors.
He really wants IDS because it has the potential to be a cash cow that keeps on giving. I think one way or another he will make sure that his bid does not fail.
The value of the bid has been reported in several ways and valuations. As houndog says, the 5 billion valuation includes debt. The 3.5 billion is the valuation of the full share capital, equates to 370p per share.
Cherrywhite, this is copied from the full year results:
'As previously indicated at the Group's half year results, the Board has proposed a final dividend payment of 2 pence per share in respect of 2023-24, funded by GLS. This final dividend payment is subject to shareholders approval at the Annual General Meeting scheduled to take place on 25 September 2024. The dividend will be paid on 30 September 2024 to shareholders on the register at 23 August 2024.
The Board is also proposing a special dividend of 8 pence per share, conditional upon completion of the transaction with EP Group.'
Isleworth, the guardian article is a cartoon of journalism. KPMG would have been negligent to have ignored loan facilities when the ownership of the loan will obviously change when a company is being taken over; dotting the i's and crossing the t's is their job! The loan facilities have never been used. Kretensky could afford to buy IDS twice over. IDS is at no financial risk with his ownership.
Hounddog, thanks for putting some context onto the guardian article. I've had a look at the sections "Consideration of non-binding proposal by EP Group to acquire IDS plc" and "Going Concern Statement" , and how the guardian use them to create an article on financial risk warnings from IDS re Kretensky's bid.
When you see these ' financial warnings' in context it becomes apparent that they are clearly just standard due diligence that one would expect KPMG to highlight in the context of a change of ownership, and hinge around the current debt facility, and the question "whether the new owners would be able to maintain existing loans and secure fresh funding?". I believe kretensky is worth around £8 billion. I'm pretty sure the creditors would be delighted to continue extending the loan facilities to him in return for the annual payments he will be making for loan facilities which he will probably never use. Guardian hyperbole and bluster which can be comfortably ignored.
Good point JB, reputation is everything to a company like KPMG. I've just revisited the RNS and here is the relevant quote:
'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.'
KPMG clearly taking responsibility for the delay.
I think that the current situation for IDS, being under offer, results due, an election called and a slide in the sp from one of its many peaks this year would make the most pragmatic of us ask questions. However, the words "KPMG, has requested additional time to complete the usual standard procedures" would indicate nothing nefarious going on. Still. this is a heck of a delay.
The way the delay is being handled is very poor, 28 hours late and very little communication.
If the delay in the results is not about the number's, then what else could be the cause? IDS are certainly withholding information from shareholders. Could a valid reason for this be that the effective announcement of a new labour government has caused Kretensky to change his bid price? The odds of kretensky pulling out of the deal at this stage are vanishingly small.
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.