SML - Synlait Milk Ltd

[mondograss]

Pretty sure Graham Hart also owns Hubbards cereals. Seems like synergy to me!

[winner69]

Hart might be thinking ‘done that before, all too hard’

But one never knows what he’s thinking

[Balance]

Hi Balance, I am genuinely interested in what you are saying, any chance you could share your thoughts on where this is all going? Appreciated��

Suggest you read this opinion piece again, bearing in mind that there are two shareholders in SML with deep pockets who are in a position to achieve their long term strategic aim by taking control of SML.

ATM is going nowhere - it needs SML to export to China until 2027. Without that, ATM is in big trouble.

Bright Dairy is not going to miss an opportunity to strengthen its food/dairy supply line.

John Penno gone is a positive development which seems to have escaped the market. Penno would not have left Synlait the way he did without some assurance of what happens next with the company? He has 5m+ shares worth a cool $60m at one time!

https://www.interest.co.nz/rural-new...o-easy-answers

"The cleanest outcome would be if a2Milk were to make an outright bid to purchase Synlait. Bright could then decide to sell or retain its shares.

If Bright decided to retain the shares, then a2milk would need to buy at least 76 percent of other shareholdings to obtain control. Perhaps a2Milk is biding its time, as the screws are tightened on Synlait. And then, what would Bright decide to do? Perhaps a counter offer to ratchet up the price?

The only thing close to a certainty is that something big now has to happen. The Synlait of the future is going to be very different to the current Synlait."

[Balance]

With his deep pockets he could afford to buy the lot, knock them into shape wait a couple of years , float, take his seed money out and still be left with 40% inside 3 or 4 years.

He could as Hart actually provides strategic direction. His inner circle executes the strategy and boy, have they not done superbly well!

The assumption though that the whole of SML is for sale is imo flawed.

[Bikeguy]

Suggest you read this opinion piece again, bearing in mind that there are two shareholders in SML with deep pockets who are in a position to achieve their long term strategic aim by taking control of SML.

ATM is going nowhere - it needs SML to export to China until 2027. Without that, ATM is in big trouble.

Bright Dairy is not going to miss an opportunity to strengthen its food/dairy supply line.

John Penno gone is a positive development which seems to have escaped the market. Penno would leave Synlait the way he did without some assurance of what happens next with the company? He has 5m+ shares worth a cool $60m at one time!

https://www.interest.co.nz/rural-new...o-easy-answers

"The cleanest outcome would be if a2Milk were to make an outright bid to purchase Synlait. Bright could then decide to sell or retain its shares.

If Bright decided to retain the shares, then a2milk would need to buy at least 76 percent of other shareholdings to obtain control. Perhaps a2Milk is biding its time, as the screws are tightened on Synlait. And then, what would Bright decide to do? Perhaps a counter offer to ratchet up the price?

The only thing close to a certainty is that something big now has to happen. The Synlait of the future is going to be very different to the current Synlait."

Very much appreciated Balance,
When you say “ The assumption though that the whole of SML is for sale is imo flawed” can you elaborate on this more? I am a holder working out what, if anything this is I can do here, lol

[Bikeguy]

I hold the opinion that Bright, and as a captive customer A2, have made the most of the circumstances they have found themselves in, in that Bright wish to fully secure Synlait.

My thoughts are that they will look to secure it through a credit raise, simply making it so unattractive that no one wishes to participate? A2 will have to.

I do hold the thought that Bright/A2 may look to make a joint takeover offer (would need to to circumvent OIO), the split to be whatever they hash out....but I feel the CR would deliver the same thing for them cheaper?

[Balance]

I hold the opinion that Bright, and as a captive customer A2, have made the most of the circumstances they have found themselves in, in that Bright wish to fully secure Synlait.

My thoughts are that they will look to secure it through a credit raise, simply making it so unattractive that no one wishes to participate? A2 will have to.

I do hold the thought that Bright/A2 may look to make a joint takeover offer (would need to to circumvent OIO), the split to be whatever they hash out....but I feel the CR would deliver the same thing for them cheaper?

OIO is not an issue imo.

Look at Westland and Silver Fern - NZ desperately needs foreign investors with capital, expertise and access to global markets.

Agree with you that CR is how the game will play out.

And haven't the market done a wonderful job delivering a trashed SP as well as panic-stricken bond holders?

[Bikeguy]

OIO is not an issue imo.

Look at Westland and Silver Fern - NZ desperately needs foreign investors with capital, expertise and access to global markets.

Agree with you that CR is how the game will play out.

And haven't the market done a wonderful job delivering a trashed SP as well as panic-stricken bond holders?

Yes, you are right it’s been absolute panic…

I have been needing to drop my entry point but have held off simply because of what I feel is almost certain (CR) and what a show that will be, Bright will underwrite it because that’s actually what it wants…it to fail miserably and to pick these up for what, maybe as low as 0.25 a share??

[billkiapi]

I agree- a CR now seems most likely, with retail investors being massively diluted. The prospect of asset sales seems very remote, and it won't cover the 560M debt anyway

[Rawz]

Yes, you are right it’s been absolute panic…

I have been needing to drop my entry point but have held off simply because of what I feel is almost certain (CR) and what a show that will be, Bright will underwrite it because that’s actually what it wants…it to fail miserably and to pick these up for what, maybe as low as 0.25 a share??

You dont need to drop your entry point. Your cash now should go to where the best value is right now. Forget averaging down. Your old money invested cannot be saved. Your new money now ready to be invested can go anywhere. Its free to the best home you can find.