STU - Steel & Tube Holdings

[winner69]

https://www.nzx.com/announcements/321830

Read this placement very carefully and consider where the sp is likely to go in the short term.


Doesn’t “Overall, the capital raising has been structured to provide substantially pro rata participation by all shareholders.” Mean everybody wins

[macduffy]

Doesn’t “Overall, the capital raising has been structured to provide substantially pro rata participation by all shareholders.” Mean everybody wins

Only if there's anything to win!

;)

[Balance]

Doesn’t “Overall, the capital raising has been structured to provide substantially pro rata participation by all shareholders.” Mean everybody wins

Read page 26 for I believe is the only mention of the fact that the $20.8m or 18.1m shares issued - are at $1.15 are 'cum-rights'!

http://nzx-prod-s7fsd7f98s.s3-websit...787/283950.pdf

So these favored institutions and investors get their shares at ex-rights $1.08 vs existing shareholders at ex-rights $1.28!

That's at a huge 20c discount!

How the heck is that 'substantially' pro-rata to all shareholders?

[Balance]

https://www.nzx.com/announcements/322044

Confirmation 18.1m shares issued at $1.15 today.

Share price holding at $1.35 so there's a nice 20c profit or 17.4% profit to be made by those 'fortunate' enough to get access to the placement.

Wonder if the rest of the market (especially those buying today at $1.35) is aware of this 'pro-rata' participation by all shareholders!

[Snow Leopard]

Read page 26 for I believe is the only mention of the fact that the $20.8m or 18.1m shares issued - are at $1.15 are 'cum-rights'!

http://nzx-prod-s7fsd7f98s.s3-websit...787/283950.pdf

So these favored institutions and investors get their shares at ex-rights $1.08 vs existing shareholders at ex-rights $1.28!

That's at a huge 20c discount!

How the heck is that 'substantially' pro-rata to all shareholders?

I do not know what the page 26 is in reference to as you link appears to a dud.

While I agree that the $1.15 guys get a better deal, they actually get their shares at an average $1.116 if they take up their rights in full.

That the $1.15 shares are included in the rights offer is stated in the Offer Document (on Page 6).

Always one law for the rich and another law for the not so rich, heh?

Looks like we are getting down to my $1.28 anyway :(

[Balance]

I do not know what the page 26 is in reference to as you link appears to a dud.

While I agree that the $1.15 guys get a better deal, they actually get their shares at an average $1.116 if they take up their rights in full.

That the $1.15 shares are included in the rights offer is stated in the Offer Document (on Page 6).

Always one law for the rich and another law for the not so rich, heh?

Looks like we are getting down to my $1.28 anyway :(

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/321787/283950.pdf

[Balance]

I do not know what the page 26 is in reference to as you link appears to a dud.

While I agree that the $1.15 guys get a better deal, they actually get their shares at an average $1.116 if they take up their rights in full.

That the $1.15 shares are included in the rights offer is stated in the Offer Document (on Page 6).

Always one law for the rich and another law for the not so rich, heh?

Looks like we are getting down to my $1.28 anyway :(

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/321909/284120.pdf

Per the offer document, this must be the most misleading statement possible to existing shareholders :

"The Offer follows the successful placement of $20.8 million of New Shares to institutional investors at $1.15 per share, being a higher price than under this Offer."

They are totally different type of shares under the offer!

Conveniently leaving out the fact that these are shares cum-rights so effective entry price (when they take up their rights at $1.05) is $1.08 vs $1.28 for those who hold shares at time of announcement!

[Snow Leopard]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/321909/284120.pdf

Per the offer document, this must be the most misleading statement possible to existing shareholders :

"The Offer follows the successful placement of $20.8 million of New Shares to institutional investors at $1.15 per share, being a higher price than under this Offer."

They are totally different type of shares under the offer!

Conveniently leaving out the fact that these are shares cum-rights so effective entry price (when they take up their rights at $1.05) is $1.08 vs $1.28 for those who hold shares at time of announcement!

Well given that:
the 'misleading' statement is totally accurate both in fact and language;
there is only one type of shares;
and the effective entry price is $1.116.

I think you may be letting your emotions cloud your rationality. Try and find a quiet spot and practice your mantra chanting (free one included with this post, look below).

Some of us managed to read the documents and do the sums and understand what is going on.

Disc: non-holder and will remain so at current market prices.

[Beagle]

Can't see any reason to get worked up into a stew over this one. Shares subject to such a deeply discounted rights issue in a very poorly performing mutt often tend to end up trading very close to the issue price just before people have to stump up the funds and as more and more investors ponder whether they bother putting their paws in pockets to throw good money after bad. One wonders if the value of the rights will end up being virtually worthless ? How many more tens of millions of other write-offs / skeletons are there just waiting to be let out of the closet when the balance sheet has the strength to stand another lot of write-downs anyway ? Claims of solid normalized EBITDA for years to come is nothing more than brazen window dressing to try and get the desperately needed funds in the door.
Used car salesman selling some old piece of systemically flawed junk will tell you anything you want to hear to make a sale and this has those sort of salesmen's fingerprints all over it in my opinion.

[Balance]

Well given that:
the 'misleading' statement is totally accurate both in fact and language;
there is only one type of shares;
and the effective entry price is $1.116.

I think you may be letting your emotions cloud your rationality. Try and find a quiet spot and practice your mantra chanting (free one included with this post, look below).

Some of us managed to read the documents and do the sums and understand what is going on.

Disc: non-holder and will remain so at current market prices.

Good on you then for such profound and insightful reading of document and conclusion indeed!

I am stunned into silent and quiet contemplation of said profoundness of insightfulness!

If only everyone had such depth of ability to understand what is going on.

Bravo, my friend and thanks so very very much of sharing your profoundness with us lesser creatures.

[Balance]

Stunning case of profound insightfulness in full display this morning :

Some insightful investor stood there and bought 30,000 shares at $1.34 - obviously with oblivious profoundness that the stock has gone ex-rights so should be theoretically trading at $1.19.

And they say that everyone reads the information and understand what is going on?

[Robomo]

Stunning case of profound insightfulness in full display this morning :

Some insightful investor stood there and bought 30,000 shares at $1.34 - obviously with oblivious profoundness that the stock has gone ex-rights so should be theoretically trading at $1.19.

And they say that everyone reads the information and understand what is going on?

The offer from STU is...
"Under the Rights Offer, eligible shareholders are entitled (but not obliged)
to subscribe for 1 new share for every 1.9 existing shares held as at 5.00pm
on the record date of 15 August 2018, at an issue price of $1.05 per new
share. This represents a 28.1% discount to the closing share price on the
NZX on 6 August 2018 and a 18.3% discount to the theoretical ex-rights price
(TERP) of $1.28 per share, post the Placement and the Rights Offer, based on
the pre-announcement close of $1.46."

I'm no stockmarket legend but it appears that the stock is ex-rights at 5pm tomorrow. Could Balance possibly be wrong?

[winner69]

The offer from STU is...
"Under the Rights Offer, eligible shareholders are entitled (but not obliged)
to subscribe for 1 new share for every 1.9 existing shares held as at 5.00pm
on the record date of 15 August 2018, at an issue price of $1.05 per new
share. This represents a 28.1% discount to the closing share price on the
NZX on 6 August 2018 and a 18.3% discount to the theoretical ex-rights price
(TERP) of $1.28 per share, post the Placement and the Rights Offer, based on
the pre-announcement close of $1.46."

I'm no stockmarket legend but it appears that the stock is ex-rights at 5pm tomorrow. Could Balance possibly be wrong?

Seems to marked XR on some trading platforms

And everybody has adjusted yesterday’s close price

Balance never never wrong

[Robomo]

Pardon my ignorance, but why the XR notes and adjustments to the close price being made today (14 August) when the offer document says 5.00pm 15 August?

[BlackPeter]

Pardon my ignorance, but why the XR notes and adjustments to the close price being made today (14 August) when the offer document says 5.00pm 15 August?

Because the ownership change (i.e. payment and register entry) happens only 2 days after the trade. Buy on the 13th, shares change hand on the 15th (and the new owner gets the rights). Buy on the 14th, shares change hand on the 16th and the old owner keeps the rights. This is what T+2 means :).

[Balance]

Seems to marked XR on some trading platforms

And everybody has adjusted yesterday’s close price

Balance never never wrong

Thanks, W69 - but if only!

Amazing it is so hard to find an ex-date anywhere in the NZX web-site for any rights issue!

But when all bids and offers are cleared in the morning, that's as good a clue as any that a stock has gone ex.

Bit like when the missus clears out her wardrobe before leaving her hubby. :D

[waikare]

Thanks, W69 - but if only!

Amazing it is so hard to find an ex-date anywhere in the NZX web-site for any rights issue!

But when all bids and offers are cleared in the morning, that's as good a clue as any that a stock has gone ex.

Bit like when the missus clears out her wardrobe before leaving her hubby. :D


Under the Rights Offer, eligible shareholders are entitled (but not obliged) to subscribe for 1 new share
for every 1.9 existing shares held as at 5.00pm on the record date of 15 August 2018, at an issue price of
$1.05 per new share. This represents a 28.1% discount to the closing share price on the NZX on 6 August
2018 and a 18.3% discount to the theoretical ex-rights price (TERP) of $1.28 per share, post the
Placement and the Rights Offer, based on the pre-announcement close of $1.46.


Taken from STU news release dated 8th Aug. list 15th as being ex rights.

[percy]

Under the Rights Offer, eligible shareholders are entitled (but not obliged) to subscribe for 1 new share
for every 1.9 existing shares held as at 5.00pm on the record date of 15 August 2018, at an issue price of
$1.05 per new share. This represents a 28.1% discount to the closing share price on the NZX on 6 August
2018 and a 18.3% discount to the theoretical ex-rights price (TERP) of $1.28 per share, post the
Placement and the Rights Offer, based on the pre-announcement close of $1.46.


Taken from STU news release dated 8th Aug. list 15th as being ex rights.

They have been trading all day XR.
Why?
Read BlackPeter's post # 265 and you will find out why.

[winner69]

Those ignorant punters who may have taken up Zero Commissions offer of $1.88 earlier this year must be feeling pretty pleased with themselves now

[trader_jackson]

https://www.stuff.co.nz/business/industries/106379987/steel-mesh-class-action-could-snowball-with-fresh-court-action-law-firm-forecasts

Class actions - Scary stuff

[Balance]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/321909/284120.pdf

Per the offer document, this must be the most misleading statement possible to existing shareholders :

"The Offer follows the successful placement of $20.8 million of New Shares to institutional investors at $1.15 per share, being a higher price than under this Offer."

They are totally different type of shares under the offer!

Conveniently leaving out the fact that these are shares cum-rights so effective entry price (when they take up their rights at $1.05) is $1.08 vs $1.28 for those who hold shares at time of announcement!

So now we see those who obtained shares at $1.15 (18m shares) or $1.08 ex-rights dish them out to the happy punters out there for a quick profit.

Good on them!

Great if you are favoured to receive a few millions of them for a quick flick!

[steveb]

You might have a problem finding some mug to buy a couple of million shares in this dog though

[rugila]

Funny thing. Bought my first STU shares in Dec 1998 @ $1.55
Sold some on 4/3/2005 @ $5.55 which I think is the highest STU shares have ever sold for.
Dividends over the years have been OK but my net return (capital + dividends) on STU to date is only 1.7% per annum which is appallingly pathetic compared with 13.1% from RBD, 10-15% from property, & etc.
Haven't kept up with the company well enough in recent years to really know what went wrong. Don't know what to do about the rights issue. Will probably just toss a coin.

[Snow Leopard]

Think there will nearly 166M shares after all this is done.

FY19 Estimate $25M EBIT would then be about $0.104 NPAT.

'Normalised' $35M EBIT down the road would then be about 'normalised' $0.148 NPAT.


Might be worth a small punt at $1.28 cum rights or $1.20 ex rights for me, but just as happy to stay off the register.

Now trading at $1.20 or less mark.

So do I put my money where my post is or not?

Decisions, decisions

[Balance]

Now trading at $1.20 or less mark.

So do I put my money where my post is or not?

Decisions, decisions

Guess those got their shares in the placement at $1.08 equivalent will be happy to continue to lighten up - especially with the impending announcement any day now on the penalties to be imposed on STU re the substandard mesh steel?

$1.20 is still a nice healthy 11% profit for a week - that's 572% in a year if you can get sweet deals alike this every week!

[winner69]

Guess those got their shares in the placement at $1.08 equivalent will be happy to continue to lighten up - especially with the impending announcement any day now on the penalties to be imposed on STU re the substandard mesh steel?

$1.20 is still a nice healthy 11% profit for a week - that's 572% in a year if you can get sweet deals alike this every week!

Wonder what those who bought at $1.34 ex rights day are thinking?

[Balance]

Wonder what those who bought at $1.34 ex rights day are thinking?

Being ever so cynical, wouldn't be surprised one bit if the $1.34 and $1.30 (not big volume anyway) trades were made by those who took part in the placement at $1.25 to suck in the 'insightful' ones?

[100101]

I'm in the same boat. But today with the price sinking ever closer to the issue price, I am thinking that I will park what I have in the bottom draw for a few years.
With no divis this year and a bit unknown next, along with the Instos who will be selling for a bit of profit for a long time to come, why throw good money after bad?

[sideline]

Hi, just saw the announcement from Milford on 10-Aug 2018 where they declared:

...........
Details of transactions and events giving rise to substantial holding
Details of the transactions or other events requiring disclosure:
On-market purchases of 6,081,917 ordinary shares, for total consideration of $7,016,509.35 was made during the period 10 April 2018 – 10 August 2018.
..........

Average price works out just above 1.15, but the market never traded below 1.22 in
that period. So they obviously got themselves around 6m shares in the discounted
placement for 1.15 and declared them misleadingly as "on-market purchases".
Is this legal?

[Balance]

Hi, just saw the announcement from Milford on 10-Aug 2018 where they declared:

...........
Details of transactions and events giving rise to substantial holding
Details of the transactions or other events requiring disclosure:
On-market purchases of 6,081,917 ordinary shares, for total consideration of $7,016,509.35 was made during the period 10 April 2018 – 10 August 2018.
..........

Average price works out just above 1.15, but the market never traded below 1.22 in
that period. So they obviously got themselves around 6m shares in the discounted
placement for 1.15 and declared them misleadingly as "on-market purchases".
Is this legal?

Good catch, sideline.

Effectively with the rights issue, Milford gets 9.157m shares at $1.08 - good deal if you can get it.

[King1212]

Result on this Wednesday...it said any commerce charges or penalties will be covered by insurance. It seems to be a good punt at the current price? Anyone thoughts?

[macduffy]

Result on this Wednesday...it said any commerce charges or penalties will be covered by insurance. It seems to be a good punt at the current price? Anyone thoughts?

You can be sure that any insurance payouts will mean higher premiums in future. Not a punt I'll be taking.

[winner69]

Result on this Wednesday...it said any commerce charges or penalties will be covered by insurance. It seems to be a good punt at the current price? Anyone thoughts?

Did they actually say that?

[King1212]

https://www.stuff.co.nz/business/104133207/steel--tubes-shock-loss-breach-of-lending-covenants--but-has-turned-corner

[biker]

Guess those got their shares in the placement at $1.08 equivalent will be happy to continue to lighten up - especially with the impending announcement any day now on the penalties to be imposed on STU re the substandard mesh steel?

$1.20 is still a nice healthy 11% profit for a week - that's 572% in a year if you can get sweet deals alike this every week!

They got their shares at $1.116 and a direct quote from announcement to NZX:

“As previously advised, it is expected that any financial penalty relating from the current Commerce Commission court case will be covered by Steel & Tube’s insurance”

Just keeping it real.

[biker]

Result on this Wednesday...it said any commerce charges or penalties will be covered by insurance. It seems to be a good punt at the current price? Anyone thoughts?

Results on Friday 31st.

[Joshuatree]

Results are 29th Aug now.

[winner69]

https://www.stuff.co.nz/business/104133207/steel--tubes-shock-loss-breach-of-lending-covenants--but-has-turned-corner

I see now

‘Any financial penalty relating from the current Commerce Commission court case will be covered by Steel & Tube's insurance,’ he said.

If it’s on the Internet it was be true then

[King1212]

Anyone punt in? With restructuring happening almost a year...must be turn around soon?

[Joshuatree]

Still mulling over taking up rights. Not much one can do when in a corner s/p wise. Will see results wed and decide then.Longterm longterm.

[boysy]

Hold a few much like those here waiting for the update.

Interesting piece re the book build the price cannot be less than $1.05 or more than the market price the day before the book build takes place. Should be plenty of room to do the numbers based on forward earnings projections assuming no more skeletons are lurking .....

[King1212]

https://steelandtube.co.nz/file/9175/download?token=LkNTFiE-

EBIT 25m for the next 2019 forecast...once capital raised..debts will be reduced to minimum from recent $100 debts...

once capital raised done done and dusted..will see the sp slowly raise?

[percy]

With a history of under performance, they will need to get "runs on the board" ,before we can make a reasonable judgement on the company, and their future.

[Beagle]

After the FBU fiasco is there anyone left that really believes that STU have found all the skeletons in the closet with their ~ $54m write-down ?

Future years profitability guesses have the look of a used car salesman telling me, yes we've fixed all the problems and you will get years of trouble free service...

Of course the company would say everything is sorted...they're up against it and need the capital ! Investors should treat anything this company says with a healthy dose of skepticism in my opinion. FBU and MPG have both left investors in the stew, why would you get a different result in the same sector from STU ?

[percy]

Used car salesmen are pillars of the community.
The day of them telling lies went out the door years ago.
It is private car sellers who are the liars.

[Joshuatree]

Only way is up is one way to look at it

[King1212]

The result meant to be 31st August, Friday. They brought forward to wed, 29th August, Wednesday.

what I see, the right offer close Monday, 3rd September. They would like to present it first so the shareholders can get Thursday and Friday to decide to get in the right offer?

[Beagle]

Only way is up is one way to look at it

Lots of other people thought that about MPG at $1. I sold at that level and very pleased I did. Taught me two valuable lessons. You'll never get every investment right and do not own mange and flea ridden dogs, no exceptions !

[trader_jackson]

I have heard things about STU... not good things...

I would be extremely skeptical about "Strive / ERP recovery" which is a huge chunk of the budgeted bigly recovery from FY18 to FY19

One of the comments on the slides from a customer mentioned "The ERP conversion caused a lot of problems...", and I reckon it caused a few to many problems for some customers, who won't be returning to STU

I hope for the holders sake I am proved wrong.

[biker]

I see now

‘Any financial penalty relating from the current Commerce Commission court case will be covered by Steel & Tube's insurance,’ he said.

If it’s on the Internet it was be true then

It was stated in a company announcement to the NZ stock exchange on 23rd May 2018 so unless you think they have deliberately deceived the market, it is true.

[winner69]

It was stated in a company announcement to the NZ stock exchange on 23rd May 2018 so unless you think they have deliberately deceived the market, it is true.

Wasn’t implying anything at all

They did use the word expected on 23rd May

[percy]

Could "We live in hope" be more to the point,than expected.?

We live in interesting times.

[Joshuatree]

The result meant to be 31st August, Friday. They brought forward to wed, 29th August, Wednesday.

what I see, the right offer close Monday, 3rd September. They would like to present it first so the shareholders can get Thursday and Friday to decide to get in the right offer?

Yep thats good we can give it a final chance/decision. Some new management in place i think? Mind you Beagle thinks it can go down even more from here, Gaynor thinks otherwise by the looks of his actions.

[winner69]

https://steelandtube.co.nz/file/9175/download?token=LkNTFiE-

EBIT 25m for the next 2019 forecast...once capital raised..debts will be reduced to minimum from recent $100 debts...

once capital raised done done and dusted..will see the sp slowly raise?


That preso presents a compelling case to get in while the shares are cheap as ....very impressive

EBIT going from $14m this year to $25m next year and then $40m a year or so later is very impressive. (even though they were achieving those sort of figures a few years ago)

The $25m is going to mean F19 EPS is about 10 cents (I think allowing for the new shares) ....so based on this how high can the share price go over the next year?

Only thing that would worry me is that all the talk about the booming market and all the great things to improve efficiiency / productivity etc echos of Metro Glass.

[Beagle]

That preso presents a compelling case to get in while the shares are cheap as ....very impressive

EBIT going from $14m this year to $25m next year and then $40m a year or so later is very impressive. (even though they were achieving those sort of figures a few years ago)

The $25m is going to mean F19 EPS is about 10 cents (I think allowing for the new shares) ....so based on this how high can the share price go over the next year?

Only thing that would worry me is that all the talk about the booming market and all the great things to improve efficiiency / productivity etc echos of Metro Glass.

Don't forget to take their forecasts with a grain of salt. Have a look at the forward PE of MPG !
Heck you can buy a growing company like TNR (with hopefully no skeletons in the closet) a genuine growth company if Percy is right, on a forward PE of only 9.75.

[King1212]

Yep thats good we can give it a final chance/decision. Some new management in place i think? Mind you Beagle thinks it can go down even more from here, Gaynor thinks otherwise by the looks of his actions.

Joshuatree, this company remind me with VOC asx...downgrade, restructure, write off...etc and finally VOC turn around...so...good potential? STU makes profit but just because the write off..

[winner69]

Joshuatree, this company remind me with VOC asx...downgrade, restructure, write off...etc and finally VOC turn around...so...good potential? STU makes profit but just because the write off..

That VOC an interesting chart

[Joshuatree]

HaHa , still holding VOC and enjoying the bounce, just 100% more lift to go and im in the money:eek2:. The CEO built it up buying buying buying paying far too much , spinning bull dust then sold out at the top!! And left, b'stard.

I hold STU indirectly. The options are,sell at the bottom, do nothing and be diluted or take up spp and believe newish management really have sorted it (ERP scapegoat, legacy issues , insurance will pay bulk of fines for dodgy mesh). Im thinking the last approach atp.

[Filthy]

The options are,sell at the bottom, do nothing and be diluted or take up spp and believe newish management really have sorted it (ERP scapegoat, legacy issues , insurance will pay bulk of fines for dodgy mesh). Im thinking the last approach atp.

pretty much sums it up. damned no matter what you do really eh JT.
I have a small holding, purchased before the 'building boom'.... lesson learnt; say no more.
Its not huge sums so not that bothered, but will throw some extra cash at it and average down. Long term play though.
I don't believe insurance will cover anything (cant insure negligence?) and then there is still that pesky risk of a class action (where no one wins except the lawyer trying to instigate it).
Not expecting a divi anytime soon either, but reckon those beaten down building stocks are all at the bottom of their cycles and should come good eventually.
new management look okay. will watch to see how it plays out

[Baa_Baa]

Does anyone have any insights as to the full extent of liability for supplying dodgy mesh/steel that has been incorporated into a construction? I.e. how far could this issue actually go, would buildings have to be rebuilt and to what extent is STU really covered by insurance?

[percy]

Does anyone have any insights as to the full extent of liability for supplying dodgy mesh/steel that has been incorporated into a construction? I.e. how far could this issue actually go, would buildings have to be rebuilt and to what extent is STU really covered by insurance?

I think it will be up to the courts to determine the extent of liability,and whether buildings have to be rebuilt or not.Compensation etc.
The insurance I would think will also be determined in the courts.
Whatever ever happens, I expect it will come at a considerable cost to STU.
Lawyers,QCs and courts do not come cheaply.

[BlackPeter]

I think it will be up to the courts to determine the extent of liability,and whether buildings have to be rebuilt or not.Compensation etc.
The insurance I would think will also be determined in the courts.
Whatever ever happens, I expect it will come at a considerable cost to STU.
Lawyers,QCs and courts do not come cheaply.

Agree - and adding to that - justice does not come fast in our country. Expect many years (potentially decades) for which this
Damocles sword will hang over STU.

[blackcap]

All hunky dory, nothing to worry about, transformation well underway and dividends back next year:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/322957/285625.pdf

(how much to believe though)

[King1212]

All hunky dory, nothing to worry about, transformation well underway and dividends back next year:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/322957/285625.pdf

(how much to believe though)

can not believe any companies at the share market....that why we call share market..business is up n down every year

[boysy]

Had plenty of support today up 4c wonder how this will trade heading into the bookbuild ....

[King1212]

It said the quarter trading is looking positive...so the management must be on track. A write off is one off..so with 1/2 billion revenue...for sure the SP worth more than the current?

[BlackPeter]

It said the quarter trading is looking positive...so the management must be on track. A write off is one off..so with 1/2 billion revenue...for sure the SP worth more than the current?

Since when would revenue determine the share price? Last time I checked was STU not a hyped up startup software company, but a building supplier with a lousy quality system.

If you look into earnings (instead of revenue), than yes, this is typically one of the factors impacting on share price, but not the only one. And to be honest - a forward PE of 133 (2018 to 2020 based on analyst consensus) might suit amazon, but is this the right PE for a ZERO growth company like STU?

And what about risks? Isn't there some pending litigation with potentially fatal outcome given that they sold lots of substandard steel?

If we assume that all the customers whom they sold substandard steel are happy and forego compensation (unlikely) and that they manage to get back to something like 20 cents EPS next year without further slippage (highly optimistic) - how much would they be worth? OK - lets say $2 as absolute best case. The question every investor needs to ask themselves is - how large is the risk that things run less than optimal (they always do ....).

I think the market gives a quite clear answer to this question;

[boysy]

Having another spurt towards the theoretic ex rights price of $1.28 today. The rights in the money by 19c will be interesting to see how this trades over the next few days.

[Robomo]

So the question is - what effect on SP will the bookbuild have, which closes for retail investors tomorrow moring? Will those that bought their entitlement at $1.05 get burned, or make a nice instant profit?

[King1212]

This will help STU...

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12116219

[boysy]

So the question is - what effect on SP will the bookbuild have, which closes for retail investors tomorrow moring? Will those that bought their entitlement at $1.05 get burned, or make a nice instant profit?

Record date for rights issue 5.00pm on 15 August 2018
• Despatch of Offer Document to shareholders 16 August 2018
• Opening date of rights offer 17 August 2018
• Closing date of rights offer 5.00pm on 3 September 2018
• Shortfall bookbuild 5 September 2018
• Allotment of New Shares 7 September 2018
• Payment of any premium achieved in bookbuild By 11 September 2018

[janner]

Masochists..

Place it on your watch list and wait for the programme alert !!..

[BlackPeter]

This will help STU...

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12116219

Hardly. While there might be a spike in Auckland - consents are dropping nationally hard and fast:


But nationally, the exact opposite trend was displayed with new house consents falling 10 per cent in the month of July.

[boysy]

Will be interesting to see how the bookbuild pans out next week and how it will compare to the theoretical ex rights price of 1.28 ....

[boysy]

So the question is - what effect on SP will the bookbuild have, which closes for retail investors tomorrow moring? Will those that bought their entitlement at $1.05 get burned, or make a nice instant profit?

Book build shares will be at price no lower than $1.05 and no higher than the closing price on Monday will be interesting to see the trading of shares on monday ....

[Scrunch]

Book build shares will be at price no lower than $1.05 and no higher than the closing price on Monday will be interesting to see the trading of shares on monday ....

The size, rather than the value of the book build will be of most interest to me as it confirms the number of shareholders that stumped up more cash to buy additional shares.

[boysy]

Agreed one has to remember that the rights are renounceable so perhaps shareholders who would otherwise participate in a non renounceable will simply sit on the sidelines and receive a premium if the book build price is above $1.05 ....

Either way will be interesting to see how many holders do stump up for the 1:1.9 shares @ $1.05

[King1212]

The intos supported them..they already raised 20m....so the sign of confidence that the boat will sail smoothly..otherwise instos won't put in the money in?

[boysy]

Ironic the instos Get a third bite of the cherry ....

[winner69]

STU going to do something like what Nuplex did after a deeply discounted cap raise

Share price will be well over 2 bucks next year ......even if they don’t perform as promised.

[macduffy]

The Nuplex iisue worked out extremely well for holders but the circumstances were rather different. In NPX's case it was mainly a matter of too much FX borrowing, owing at a timewhen the NZD took a tumble. The business was sound, otherwise, and not facing the seemingly ongoing quality problems that STU still battles. A bit of a punt, still, IMO.

[BlackPeter]

The Nuplex iisue worked out extremely well for holders but the circumstances were rather different. In NPX's case it was mainly a matter of too much FX borrowing, owing at a timewhen the NZD took a tumble. The business was sound, otherwise, and not facing the seemingly ongoing quality problems that STU still battles. A bit of a punt, still, IMO.

... and didn't Nuplex come up with this amazing new coating technology everybody wants to use before its share price went stellar (http://www.scoop.co.nz/stories/BU1504/S00594/nuplex-launches-new-technology-for-the-coatings-industry.htm)?

Unless we assume STU have something comparable in their secret research labs (I haven't heard about, hey they must be really secret) should we probably be careful with comparing apples and potentially less desirable droppings?

[winner69]

You guys please stop picking on me

All I was trying to say was that buying after a deeply discounted rights issue (for whatever reason) is often very profitable and that Nuplex was an example of that. No doubt others

And BP that whiz bang technology of Nuplex just kept them in the game, nothing else. And the business still isn’t performing that well in NZ even under new ownership. Don’t know how rest of world is going.

[percy]

Recent research from Craigs was missing any mention of the "class action," or the "Commerce Commission" likely heavy fines.
I think this is extraordinary.

[boysy]

Well let’s see what happens to the SP tomorrow noting the bookbuild price will be not lower than $1.05 and no higher than $1.22 being today’s closing price ...

[winner69]

Well let’s see what happens to the SP tomorrow noting the bookbuild price will be not lower than $1.05 and no higher than $1.22 being today’s closing price ...

If the theoretical ex rights price was touted as $1.28 the market has downgraded STU a bit since eh

You waiting for your bonus cheque (the difference)?

[boysy]

Took up my shares and put a few quid into the insto raise, recapitalising the business at a discounted price. Assuming they hit the $25M EBIT next year amd $35-40M EBIT within 3 years this could look very cheap. That being said the really do need to be turning a corner and not get hit with a huge fine from the comcom. Will be interesting to see how this trades while the book build occurs .....

[Joshuatree]

Recent research from Craigs was missing any mention of the "class action," or the "Commerce Commission" likely heavy fines.
I think this is extraordinary.

I read it and you so right, that is bizarre and raises questions about that researcher for one. I HOPE YOU ARE READING THIS CRAIGS, AMATEURISH! We took up re half our rights in the end. Fingers crossed.

[boysy]

Plenty of turnover at these prices would lend support to the book build price being towards the closing price of yesterday one would think

[Beagle]

http://www.sharechat.co.nz/article/56243509/steel-tube-raises-42-3m-in-discounted-retail-rights-offer-with-71-uptake.html

Significant vote of no confidence. Very very difficult industry to be in. I think the chances of STU meeting their future profit "guesses" (which is all they are), are VERY slim.

[Balance]

http://www.sharechat.co.nz/article/56243509/steel-tube-raises-42-3m-in-discounted-retail-rights-offer-with-71-uptake.html

Significant vote of no confidence. Very very difficult industry to be in. I think the chances of STU meeting their future profit "guesses" (which is all they are), are VERY slim.

FBU shortfall was 31%. This is exactly how non-tradable rights issues are supposed to work. In the past, those who do not want to take up their rights will sell on market. Now the companies manage the sell down via an bookbuild.

[Beagle]

FBU shortfall was 31%. This is exactly how non-tradable rights issues are supposed to work. In the past, those who do not want to take up their rights will sell on market. Now the companies manage the sell down via an bookbuild.


Both in the same problematic industry...be careful which dog you get into bed with, one has fleas the other fleas and mange lol

[King1212]

Both in the same problematic industry...be careful which dog you get into bed with, one has fleas the other fleas and mange lol

If u get a good flea shampo n injection then the fleas will never come back n the dog is healthy n be loved again :D

[boysy]

http://www.sharechat.co.nz/article/56243509/steel-tube-raises-42-3m-in-discounted-retail-rights-offer-with-71-uptake.html

Significant vote of no confidence. Very very difficult industry to be in. I think the chances of STU meeting their future profit "guesses" (which is all they are), are VERY slim.

Beagle with 70% uptake I think it’s a bit hard to call it a vote of no confidence particularly with the fact those holders not taking up the right are still entitled to any premium should the bookbuild be above $1.05 a share (assuming their is a premium). I would imagine if the rights were non renounceable the take up would of been close to 100% the fact remains the CR is recapitalising the business to a considerable extent. As always the proof will be in the post CR trading ....

[Balance]

Both in the same problematic industry...be careful which dog you get into bed with, one has fleas the other fleas and mange lol

Have made plenty of money in the past whenever FBU got itself into trouble and needed new capital and restructuring (as in selling assets etc). Just have to make sure you are not exposed when they get into trouble.

But thanks for the cautions, Beagle. That is why we have a market. Sincerely meant.

[boysy]

Well bookbuild price at 1.23 a good a result as could be expected will be interesting to see how it trades on market ....

[boysy]

Scaling of the bookbuild also applied should help support the price

https://www.nzx.com/announcements/323441

[boysy]

Fund managers going long on purchases it would seem. Will be interesting to see how STU trade over the shorter term the market isn’t expecting much afterall ....

[Balance]

https://www.nzx.com/announcements/323845

Always take note when directors and management buy shares and/or more shares.

Has served me very very well over the years - not a sure fire thing but close! Believe me, the buggers are tight with their money, so used are they these days to free options, discounted price entries etc. So when they put in their own money, especially more than token amounts, take note!

[boysy]

The market has fairly low expectations going forward, i suspect news that they are on target will see a rerate here....

[King1212]

https://www.nzx.com/announcements/323845

Always take note when directors and management buy shares and/or more shares.

Has served me very very well over the years - not a sure fire thing but close! Believe me, the buggers are tight with their money, so used are they these days to free options, discounted price entries etc. So when they put in their own money, especially more than token amounts, take note!

u bloody right! They are tight n won't put the money in unless they r on track!

https://www.anzshareandbondtrading.co.nz/dynamic/announcement.aspx?id=4838853

[blackcap]

No worries at all, back to $1.80 in no time.

https://www.nzx.com/announcements/324244

(re-affirm FY19 guidance)

[winner69]

No worries at all, back to $1.80 in no time.

https://www.nzx.com/announcements/324244

(re-affirm FY19 guidance)

Good they pumping out the good news

[Timesurfer]

Has to be one of the better buys at current prices?
(bought a couple more just in case I am right)

[blackcap]

Has to be one of the better buys at current prices?
(bought a couple more just in case I am right)

Thanks Timesurfer, lets get that price back to where it belongs. Already bought too many at $1.05 so cannot help but anyone else keen to jump on board will help the cause. For what its worth if they do get the guidance, $1.23 will look cheap.

[Snow Leopard]

Now trading at $1.20 or less mark.

So do I put my money where my post is or not?

Decisions, decisions

Today, amongst the many pieces of paper post from assorted share registries around the world was one from Computershare NZ suggesting that I sign up for electronic communications with STU.
Why or why when registries send your statements by email do they then resort to paper for so much else?

So, as I seem to do on a regular basis, I selected the 'I want ALL my communications for ALL the companies I have shares in sent electronically' option.

I hate Computershare and have fantasies about reprogramming Penny, their Virtual Agent, with a large axe.


Moving on.
Obviously I bought a few, and for less than the $1.20 I thought was worth a punt, like the fact that they have reaffirmed guidance [Our guess is still good :mellow:] but would like a few cents more on the share price.

Going to be a long time between drinks for this one, me thinks.

[Balance]

Today, amongst the many pieces of paper post from assorted share registries around the world was one from Computershare NZ suggesting that I sign up for electronic communications with STU.
Why or why when registries send your statements by email do they then resort to paper for so much else?

So, as I seem to do on a regular basis, I selected the 'I want ALL my communications for ALL the companies I have shares in sent electronically' option.

I hate Computershare and have fantasies about reprogramming Penny, their Virtual Agent, with a large axe.


Moving on.
Obviously I bought a few, and for less than the $1.20 I thought was worth a punt, like the fact that they have reaffirmed guidance [Our guess is still good :mellow:] but would like a few cents more on the share price.

Going to be a long time between drinks for this one, me thinks.

You got your wish - sp now knocking on $1.30

[boysy]

Always good buying in the bookbuild ...

[Balance]

Always good buying in the bookbuild ...

Unless it is SeaDragon!

[Sideshow Bob]

Unless it is SeaDragon!

You beat me to it there Balance!

[boysy]

Thanks guys should of quantified it’s was re the STU bookbuild .... looks like it is going for a bit of a run this arvo.

[Snow Leopard]

You got your wish - sp now knocking on $1.30

OK then :t_up:. Now for my other two wishes....

[boysy]

Looks to be breaking out ...

[Timesurfer]

Looks to be breaking out ...

I hope so, I doubled down a couple of days ago!

[Balance]

https://www.nzx.com/announcements/323845

Always take note when directors and management buy shares and/or more shares.

Has served me very very well over the years - not a sure fire thing but close! Believe me, the buggers are tight with their money, so used are they these days to free options, discounted price entries etc. So when they put in their own money, especially more than token amounts, take note!

$1.35

Always right to take note and buy when directors are buying!

[boysy]

ASM could be the next catalyst for a move higher in 3 weeks. Assuming they keep to or above guidance and are done with right offs those divi hounds will come sniffing again my bet assuming divis are resumed shorty....

[Balance]

ASM could be the next catalyst for a move higher in 3 weeks. Assuming they keep to or above guidance and are done with right offs those divi hounds will come sniffing again my bet assuming divis are resumed shorty....

Kinda reminds me of HBL - bought at 63 cents when George Kerr sold out and the other directors & Christchurch mafia bought all the shares at 55c.

Today, I am getting a dividend yield of 14.3% (fully imputed) on my purchase price. How satisfuing is that?

[boysy]

Lets hope they exit the plastics business and they don't have to write off any more for this asset. Would be good to hear that margins are improving and they are winning a few larger contracts...

[GR8DAY]

ASM could be the next catalyst for a move higher in 3 weeks. Assuming they keep to or above guidance and are done with right offs those divi hounds will come sniffing again my bet assuming divis are resumed shorty....


........seems to be gaining some traction and support now.....will it last? Agree any talk of divi re-instatement will drive SP much much higher....the question remains not IF but WHEN?

[boysy]

Sell side volume appears to be thinning also. Agree comment re reinstatement of divi will send this flying ...

[King1212]

Offer from flecther...

[blackcap]

Sell side volume appears to be thinning also. Agree comment re reinstatement of divi will send this flying ...

someone knew?

https://www.nzx.com/announcements/324803

[Balance]

https://www.nzx.com/announcements/324803

Takeover offer on 10 September 2018 from FBU - $1.70

Board does not support the offer but why have they kept is so quiet until now??????????????????

[Balance]

someone knew?

https://www.nzx.com/announcements/324803

Investigation warranted for sure.

[blackcap]

Well I did say all was hunky dory a few days ago and we would be seeing $1.90 again some time soon. To be fair I was sort of exaggerating but who knows now...

Somethings smells though. They have know since Sep 10, and the SP has been really moving in one direction for a while. Not sure if insider trading has been going on but WTF surely the board should have released that info on Sep 10 with a "board will analyse offer and get back to market with recommendation in due course". Wild wild west prevails.

[steveb]

Investigation warranted for sure.

Surely the directors should have excused themselves from the bookbuild if they had known about the offer?

[Balance]

Surely the directors should have excused themselves from the bookbuild if they had known about the offer?

Offer was made after the bookbuild was completed.

Next stage of the game is that FBU increases its offer?

They can have my shares for $2.00 per share.

[blackcap]

Surely the directors should have excused themselves from the bookbuild if they had known about the offer?

So Susan Paterson buys 117,436 shares, she has done very well. This notice out on 13 September. But its all about timing when they actually signed the paperwork and sent the $. See its on 7 Sep that the transaction happened so that falls well before 10 Sep....



http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/323845/286697.pdf

[boysy]

Topping up large in the bookbuild looks lile a fantastic move in hindsight ....

[steveb]

Well I do need to thank you Boysy and Balance for your insights,as I only got stuck in yesterday!

[boysy]

Great timing steveb what do the company think STU is worth is the question ? $2 has a nice ring to it ....

[Zeitgeist]

Smells a bit funky doesn't it?

No problem with the participation in the rights offer. The maths suggests it was part of the pro rata offer rather than the placement - so no additional shares (above the normal amount per the pro rata offer) were transacted in.

Does it matter if the offer was an indicative non-binding offer? And if so, why even announce the rejection of such an offer?

Without looking into the disclosure rules more closely, this one feels worthy of a box of wine

[boysy]

From the ann - let the games begin ......

Steel & Tube recently reaffirmed its FY19 guidance of earnings before interest and tax of $25 million on the back of the continuing positive progress being made under the company’s ‘Striving for Excellence’ strategy. The company has a clear focus on growth and improving financial performance as it positions itself as New Zealand’s leading supplier of steel products. While the market remains highly competitive, Steel & Tube continues to win new customers, sign large contracts, increase efficiencies and reduce costs.

Steel & Tube’s solid foundation has recently been strengthened with a successful capital raising. The Board and Management are confident in the improving performance of the company, and remain focused on providing high quality steel solutions and products and delivering value for employees, customers and shareholders.

[King1212]

One of my greatest buying at $1.16. Saw a lot of orders wanted to get in at $1.15...so a bit of punt....for me to get in. :t_up:

[Balance]

https://www.nzx.com/announcements/323845

Always take note when directors and management buy shares and/or more shares.

Has served me very very well over the years - not a sure fire thing but close! Believe me, the buggers are tight with their money, so used are they these days to free options, discounted price entries etc. So when they put in their own money, especially more than token amounts, take note!

So easy!

Always right to buy when directors buy!

[Scrunch]

someone knew?

https://www.nzx.com/announcements/324803

Not me - I just thought the recently increasing price was consistent with an increased probability of the future $40m+ EBIT occurring as the STU had confirmed they are on-track for the first step of the process, an EBIT of $25m. The capital raise repaid most of the debt so the big deduction to get to NPAT is tax. Allowing for a 28% tax rate and a little bit of interest, this EBIT is just over 10c/share earnings. Useful but not enough to support a share price much (if anything) above market.


Its the delivery of the $40m+ future EBIT's that would take the share price up.

Interestingly $40m - $0.8m interest - $11m tax (@28%) = $28.2m
$28.2m / 166m shares on issue = 17c/share

Indicative takeover is therefore around a future PE of 10 (if the $40m EBIT is hit).

[boysy]

You would imagine a fair few synergies would be able to be extracted should fletchers buy STU .... time to up the offer

[Balance]

You would imagine a fair few synergies would be able to be extracted should fletchers buy STU .... time to up the offer

First offer is never last offer so $2 is on imo.

The way to assess this is that FBU can debt fund itself at less than 5% pa so even if FBU pays $2 per share ($330m), a takeover of STU will be earnings positive : $25m EBIT less $15m interest = $10m additional EBIT for FBU

$330m @ 4.5% pa = $15m interest or at 5% = 16.5m

Plus all the benefits from the lovely synergies and rationalization to come!

[boysy]

Seems a win win i suspect only the directors of STU are worried about a new job under a TO situation .... Time to get an independent report done pronto if they think the offer is not up to scratch ....

[Balance]

Seems a win win i suspect only the directors of STU are worried about a new job under a TO situation .... Time to get an independent report done pronto if they think the offer is not up to scratch ....


As I point out on FBU thread, next move is FBU.

First offer is never last offer so let's see what FBU comes out with.

Can imagine FBU executives huddling with their investment bankers and getting their response into shape. :D

[Snow Leopard]

You got your wish - sp now knocking on $1.30

OK then :t_up:. Now for my other two wishes....

Just one left now :t_up: :t_up:

[steveb]

I must admit it will be interesting to see what FBU have to say,hopefully they are busily getting a response together.Their SP is just drifting, down 8c today.

It's a forgone conclusion of the EBIT @ $25 mil,it's really a matter of how much icing is on the top!

[winner69]

Be fun if Fletcher’s go the hostile way

Haven’t had a good stoush on the NZX for a while ....things are just too friendly these days

[Balance]

Be fun if Fletcher’s go the hostile way

Haven’t had a good stoush on the NZX for a while ....things are just too friendly these days

Well, STU directors who topped up at $1.05 and $1.23 are not accepting the offer so FBU either withdraws (unlikely) or goes aggressive (likely).

Unlikely because FBU would look donkey stupid if this is their way of handling a takeover - no backup plan or counter offer. Credibility at stake.

[steveb]

The proposed acquisition would need clearance under the Commerce Act, which would take some time to work through due to Fletcher’s vertical presence and significant size in several steel product markets.

FBU would look a tad silly(again) if they went aggressive and the got shafted by the commerce commission !

[Balance]

The proposed acquisition would need clearance under the Commerce Act, which would take some time to work through due to Fletcher’s vertical presence and significant size in several steel product markets.

FBU would look a tad silly(again) if they went aggressive and the got shafted by the commerce commission !

If FBU made the indicative offer without considering competition issues, then they deserve to continue to slide down the slippery slope.

[steveb]

here you go from FBU

https://www.nzx.com/announcements/324808

[King1212]

Well, STU directors who topped up at $1.05 and $1.23 are not accepting the offer so FBU either withdraws (unlikely) or goes aggressive (likely).

Unlikely because FBU would look donkey stupid if this is their way of handling a takeover - no backup plan or counter offer. Credibility at stake.

what do u think the fair value of the offer balance?

[boysy]

Interesting announcement from FBU certainly seems like they are willing to progress and negotiate a higher offer in due course wonder if any other suitors are out there ...

[Balance]

what do u think the fair value of the offer balance?

irst offer is never last offer so $2 is on imo.

The way to assess this is that FBU can debt fund itself at less than 5% pa so even if FBU pays $2 per share ($330m), a takeover of STU will be earnings positive : $25m EBIT less $15m interest = $10m additional EBIT for FBU

$330m @ 4.5% pa = $15m interest or at 5% = 16.5m

Plus all the benefits from the lovely synergies and rationalization to come!

[Snow Leopard]

With FBU the usual benefit from the lovely synergies and rationalization is a 'non-cash' write down of goodwill :eek2:

[100101]

Just need another company to pop in a takeover offer and its game on.

[boysy]

https://i.stuff.co.nz/business/107574674/fletcher-building-wants-to-buy-steel--tube

Fletchers sound fairly keen on STU some of those premium figures quoted seem a bit disingenuous re being a .... premium over the CR price - not sure that means much to most holders ....

[winner69]

With FBU the usual benefit from the lovely synergies and rationalization is a 'non-cash' write down of goodwill :eek2:

So true .....always pay far too much

But this time it’s different

[King1212]

Well..if the market thinks STU is worth more than $1.70...then it should trades more than that..so time will tell....wait and see ...next couple weeks. AGM is in 4 weeks time.

[Timesurfer]

Thanks Timesurfer, lets get that price back to where it belongs. Already bought too many at $1.05 so cannot help but anyone else keen to jump on board will help the cause. For what its worth if they do get the guidance, $1.23 will look cheap.

Cheap as chips.
Can't say we didn't give everyone a heads up, along with Balance (thanks for the Directors dipping in notice).

Nothing like getting home from a days work to find you have made the best part of a months wages ;)

[boysy]

assumes you are selling, could be closer to 2 months wages if fletchers really wants in .....

[boysy]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12136404

Fletcher dropped 1.5 per cent to $6.48 after its initial bid for steel products maker Steel & Tube was turned down as too low. Fletcher offered $1.70 a share, or $284m, and has the support of shareholders with 20 per cent of the company's stock. CEO Ross Taylor says he will keep pursuing the company, but was coy on whether he'll raise the bid.

Lindsay said the takeover bid was a surprise with other firms seen as more likely targets.

"The market was quite surprised that they would look to spend quite a lot of their capacity in bidding for Steel & Tube," he said.

Steel & Tube, which is outside the top 50, climbed 16 per cent to $1.56, still below the non-binding offer.

[Scrunch]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12136404

Fletcher dropped 1.5 per cent to $6.48 after its initial bid for steel products maker Steel & Tube was turned down as too low. Fletcher offered $1.70 a share, or $284m, and has the support of shareholders with 20 per cent of the company's stock. CEO Ross Taylor says he will keep pursuing the company, but was coy on whether he'll raise the bid.

Lindsay said the takeover bid was a surprise with other firms seen as more likely targets.

"The market was quite surprised that they would look to spend quite a lot of their capacity in bidding for Steel & Tube," he said.

Steel & Tube, which is outside the top 50, climbed 16 per cent to $1.56, still below the non-binding offer.

Yes interesting wording from the FBU announcement "Through this process shareholders, who collectively own more than 20% of all Steel & Tube shares on issue, confirmed their position that the Board of Steel & Tube should, in good faith, progress the development of the proposal with Fletcher Building, with a view to it being put to Steel & Tube shareholders"

This doesn't say they will accept at $1.70, rather that they would be receptive to a proposal to decide on (or accept if FBU ups their offer price).

[winner69]

https://i.stuff.co.nz/business/107574674/fletcher-building-wants-to-buy-steel--tube

Fletchers sound fairly keen on STU some of those premium figures quoted seem a bit disingenuous re being a .... premium over the CR price - not sure that means much to most holders ....

Not disingenuous boysy, only doing what you do boysy — promote the stuff that best supports your story

Isn’t 58% premium to the weighted average capital raise price of NZ$1.07 tremendous return in such short time. Cool eh and many of us on here happy it eventuates.

What you make of the transaction multiple of 12.3x FY19 EBIT guidance when the average over the last 5 years of 9.2x. Without a takeover on the table you’d be rapt with a share price of $1.70, even with the touted improved performance that still has to be delivered in future years

Anyway we might get a bit more or we will have a chance on STU performing ...or take the money now and run

What you doing Blackpeter?

[Balance]

http://www.sharechat.co.nz/article/e1a4f234/fletcher-to-continue-steel-tube-pursuit.html

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12136277

"Asked if the price might increase, Taylor said Fletcher hoped to continue to talk to Steel & Tube but "we "think it's a good offer and would like to see it put to shareholders. We'd like to continue discussions with Steel & Tube."

Body language says FBU is ready to increase offer and STU wants a higher offer.

GAME on!

[boysy]

Yes fletchers arnt doing much of a poker face are they ...

[boysy]

http://www.sharechat.co.nz/article/e1a4f234/fletcher-to-continue-steel-tube-pursuit.html

STMOD: Do not copy & paste entire articles!

[steveb]

So if STU could stump up with say a quick $7 bil we could be on for a reverse takeover!

[clearasmud]

Steve I couldn't stop laughing.

[Marilyn Munroe]

The mice(Fletchers) offering to guard the cheese in the merchant steel market again.

The Commerce Commission would be unwise to let this takeover proceed without deep scrutiny.

Boop boop de do
Mariiyn

[BlackPeter]

Not disingenuous boysy, only doing what you do boysy — promote the stuff that best supports your story

Isn’t 58% premium to the weighted average capital raise price of NZ$1.07 tremendous return in such short time. Cool eh and many of us on here happy it eventuates.

What you make of the transaction multiple of 12.3x FY19 EBIT guidance when the average over the last 5 years of 9.2x. Without a takeover on the table you’d be rapt with a share price of $1.70, even with the touted improved performance that still has to be delivered in future years

Anyway we might get a bit more or we will have a chance on STU performing ...or take the money now and run

What you doing Blackpeter?

travelling - not a lot of time (and internet access) to montior the NZX. But yes, for what it is worth - I am holding a small parcel and don't intend to sell around the current level.

[Timesurfer]

So if STU could stump up with say a quick $7 bil we could be on for a reverse takeover!

All gone quiet from FBU ... maybe they got windy after their share price dropped and they read your threat?

[winner69]

Sort of a hint they are out looking for other suitors

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/325082/288335.pdf

[Balance]

Sort of a hint they are out looking for other suitors

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/325082/288335.pdf

Enough hints in there for either FBU to up the offer price or for another suitor to approach the Board with a better offer.

Meanwhile, company is making progress and resumption of dividends next year.

What is there not to like about STU?

[King1212]

Well...$1.70 is a no...current sp is 1.48..what a bargain...might top up a bit today. Confirmed to resume dividend this financial year...so assuming STU is paying the same amount of dividend...the yield that I got is almost 12%:eek2:...better than my rental property!

[Filthy]

Well...$1.70 is a no...current sp is 1.48..what a bargain...might top up a bit today. Confirmed to resume dividend this financial year...so assuming STU is paying the same amount of dividend...the yield that I got is almost 12%:eek2:...better than my rental property!

surely yield will drop as there is more shares on issue

[Balance]

surely yield will drop as there is more shares on issue

Initially for sure.

But as can be seen with some recapitalised turnaround stories (HBL being prime example), could be much higher in future.

[percy]

surely yield will drop as there is more shares on issue

Craigs;forecast PE 11.63.Gross yield 5.67%.

Future ratios are dependant on whether or not STU performs.

[winner69]

Enough hints in there for either FBU to up the offer price or for another suitor to approach the Board with a better offer.

Meanwhile, company is making progress and resumption of dividends next year.

What is there not to like about STU?

Does make you think that the Board see’s the path to delivering ‘best value to shareholders’ is to sell the company

That alone is reason to hold in the meantime .......if that process drags out to next year time to move on. Would be a brave person to rely on STU delivering those touted bug profits

[King1212]

Craigs;forecast PE 11.63.Gross yield 5.67%.

Future ratios are dependant on whether or not STU performs.

well more Percy..got my small parcel at $1.16....

[percy]

well more Percy..got my small parcel at $1.16....

Astute buying.

[mfd]

With EBIT of 25 million and a 70% of NPAT payout ratio (policy is 60-80%), over the 166 million shares now on offer we can hope for about 7.5c dividends, assuming 28% tax rate and negligible interest. Rising to 10.5c if they achieve 35 million. Unlikely to get back to previous dividend levels any time soon.

I'll be crossing my fingers for a higher offer from somewhere.

[winner69]

With EBIT of 25 million and a 70% of NPAT payout ratio (policy is 60-80%), over the 166 million shares now on offer we can hope for about 7.5c dividends, assuming 28% tax rate and negligible interest. Rising to 10.5c if they achieve 35 million. Unlikely to get back to previous dividend levels any time soon.

I'll be crossing my fingers for a higher offer from somewhere.

Bold bit the key ......might achieve it by hook or by crook in F20 (delivering the promise) but I doubt whether they could sustain it at that level

[King1212]

Got the letter...saying that to hold the shares tight as the sp will double in the future:t_up:

[Marilyn Munroe]

Steel is one of the central commodities in the current trade war which is supposed to make America great again.

A steel manufacturer tiring of the tariff and protectionist BS facing its internationally traded products would find a merchant steel distributor in a relatively friendly market to foreign trade an appealing distribution channel.

Cmon merger and acquisition drones there are potential fat fees in the offing here.

Boop boop de do
Marilyn

PS. I want to give some confidential advice to the Fletchers government relations drone. Has everyone else stopped reading... good I'll go on.

You want persuade Winston First to play the nationalist card and block any nasty Johnny Foreigner taking over STU.

Hey it has worked before. Remember when Petrocorp was to be sold to foreign British Gas. Richard Prebble imperiously over ruled the sale and handed Fletchers the golden ticket.

[Balance]

Steel is one of the central commodities in the current trade war which is supposed to make America great again.

A steel manufacturer tiring of the tariff and protectionist BS facing its internationally traded products would find a merchant steel distributor in a relatively friendly market to foreign trade an appealing distribution channel.

Cmon merger and acquisition drones there are potential fat fees in the offing here.

Boop boop de do
Marilyn

PS. I want to give some confidential advice to the Fletchers government relations drone. Has everyone else stopped reading... good I'll go on.

You want persuade Winston First to play the nationalist card and block any nasty Johnny Foreigner taking over STU.

Hey it has worked before. Remember when Petrocorp was to be sold to foreign British Gas. Richard Prebble imperiously over ruled the sale and handed Fletchers the golden ticket.

Yes, indeed!

And Winston being such a fervent admirer and die hard fan of Muldoonism - FBU needs to simply convince him that FBU & STU = Think BIG and good for NZ.

Easy as!

[Balance]

http://www.sharechat.co.nz/article/e1a4f234/fletcher-to-continue-steel-tube-pursuit.html

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12136277

"Asked if the price might increase, Taylor said Fletcher hoped to continue to talk to Steel & Tube but "we "think it's a good offer and would like to see it put to shareholders. We'd like to continue discussions with Steel & Tube."

Body language says FBU is ready to increase offer and STU wants a higher offer.

GAME on!

https://www.nzx.com/announcements/325268

Revised offer - $1.90 plus 5c dividend.

Game On BIG TIME!

I LOVE THIS!

[blackcap]

https://www.nzx.com/announcements/325268

Revised offer - $1.90 plus 5c dividend.

Game On BIG TIME!

I LOVE THIS!

Well called Balance, you did say the $1.70 would not be the final one.

[winner69]

https://www.nzx.com/announcements/325268

Revised offer - $1.90 plus 5c dividend.

Game On BIG TIME!

I LOVE THIS!

Obviously pretty keen eh

Screw them for a bit more

This really is a get out of jail for free card for STU investors .....sustainable EBIT of $40m, they must be dreaming but makes a good story

[boysy]

Good buying in the cap raise afterall. How will mr market react this morning is the question ...

[winner69]

Com Com approval won’t be a problem ......Fletcher’s probably done their homework and had some ‘discussions’ with them already (on a hypothetical case of course)

How STU see market
https://steelandtube.co.nz/sites/default/files/attachments/Steel%20Market%20Share%20Matrix%20Letter.pdf

If acquired the resulting top 2 control a fair chunk but room for others

[Beagle]

Obviously pretty keen eh

Screw them for a bit more

This really is a get out of jail for free card for STU investors .....sustainable EBIT of $40m, they must be dreaming but makes a good story


Further signs of ongoing FBU ineptitude I reckon. Amazing they would bid this much for this this mutt of a pup with so much uncertainty hanging over future earnings and all that before FBU have the money in the tin for the sale of their unwanted assets. Mind boggling stuff. I'd be dumping any FBU like a hot scone if I had any.

[winner69]

Further signs of ongoing FBU ineptitude I reckon. Amazing they would bid this much for this this mutt of a pup with so much uncertainty hanging over future earnings and all that before FBU have the money in the tin for the sale of their unwanted assets. Mind boggling stuff. I'd be dumping any FBU like a hot scone if I had any.

Might be inept but company suicide is not an option when you are this big

[BlackPeter]

Further signs of ongoing FBU ineptitude I reckon. Amazing they would bid this much for this this mutt of a pup with so much uncertainty hanging over future earnings and all that before FBU have the money in the tin for the sale of their unwanted assets. Mind boggling stuff. I'd be dumping any FBU like a hot scone if I had any.

Just smart investors. STU is much more healthy than FBU - i.e. their aquisition for FBU definitly would be EPS acretive :p.

Discl: hold an (unfortunately only) small parcel in STU and loving it ;);

[Beagle]

Interesting dilemma for shareholders and punters. I chose the word punters carefully because anyone buying at this level is really taking an unknown punt of Com Com approval and in this political environment you might as well flip a coin on the outcome. Heads they get approval and you get your $1.95 including special dividend in about 4-6 months time, tails you "enjoy" remaining a shareholder and look forward to hoping that STU directors with their chequered track record can deliver on earnings.

[trader_jackson]

https://www.nzx.com/announcements/325268

Revised offer - $1.90 plus 5c dividend.

Game On BIG TIME!

I LOVE THIS!

If I had cash I would have brought STU soon after the initial take over offer, this one was always on the way.
Pondered buying at cap raise time as well but ultimately decided not to (my mistake I suppose).

Congradulations to holders. If FBU bid in the low $2's, I'm sure STU would accept

[Timesurfer]

Looking promising toward lifting my portfolio out of last weeks doldrums.... if only I had had some spare cash when it all went down!

Then comes Beagle's dilemma - do I cash out now and quickly reinvest in other languishing stocks, or do I hold out for Trader Jacksons low $2 offer to eventuate? Decisions decisions.

[Beagle]

Looking promising toward lifting my portfolio out of last weeks doldrums.... if only I had had some spare cash when it all went down!

Then comes Beagle's dilemma - do I cash out now and quickly reinvest in other languishing stocks, or do I hold out for Trader Jacksons low $2 offer to eventuate? Decisions decisions.

Thankfully I don't have that dilemma. It doesn't matter which pet shop you visit mutts of questionable parentage are a lot cheaper and always will be, than well bred pedigree stock :)

[GR8DAY]

Good grief!............I actually got this one right (thus far). Acted on the gutometer and information out there that indicated (to me) this was a given. Picked up 15000 of them last week at 1.50. At 1.70 i may even buy more........still looking cheap based what we know as of today??

[Beagle]

Food for thought. Does the current political environment have any influence on the Commerce commission ?

[Timesurfer]

They are too busy trying find out why petrol prices are so high (without drawing attention to greedy govenment double dipping on tax)

[Beagle]

Cindy thinks we're all part of her Kindy. Her hypocrisy costs her substantial political capital, no question about that but she seems keen to hammer food companies next, what's after that, building products ?

[winner69]

Cindy thinks we're all part of her Kindy. Her hypocrisy costs her substantial political capital, no question about that but she seems keen to hammer food companies next, what's after that, building products ?

Governments been trying to hammer building products companies for a while now ....they are a resilient lot ....and at the end of the day don’t make excessive profits do they

[Beagle]

Governments been trying to hammer building products companies for a while now ....they are a resilient lot ....and at the end of the day don’t make excessive profits do they

Not when they get involved in high rise construction lol.

[Filthy]

https://www.nzx.com/announcements/325313

withdrawn anyway. carry-on everyone. nothing to see here

[Timesurfer]

Just another day that proves I will never understand the stock market :confused:

How did we go from a buck 50 to a buck 70 and then to a buck 40 based on that news?

[Filthy]

https://www.nzx.com/announcements/325313

withdrawn anyway. carry-on everyone. nothing to see here

shame shareholders didn't get a say in it. $1.95 was probably a fair deal

[Timesurfer]

https://www.nzx.com/announcements/325313

withdrawn anyway. carry-on everyone. nothing to see here

Oh ok.
I wonder if FBU shareholders had a quick vote on it?

[Filthy]

I note the FBU proposal was strictly confidential (point 4). I wonder if STU actually got the okay to release the information of the revised offer to the market? If they didn't, you cant blame FBU for getting the hump and pulling the plug can you?

[winner69]

shame shareholders didn't get a say in it. $1.95 was probably a fair deal

You need to TRUST your Board ...they know what’s best

Pressure on them now to deliver on those bullish promises

[trader_jackson]

wow! this is a sudden reversal! Punishment of STU's arrogance/confidence?
I suppose STU were just to ambitious with the price they wanted!
(given they haven't yet delivered...)

I am surprised people are still willing to pay $1.40 right now, given that prior to these rumours/announcements people were barely willing to pay mid $1.20's

I suppose PEB will be the only one for today to continue double digit percentage gains

[King1212]

Well...party over.....sorry guys!

[Filthy]

You need to TRUST your Board ...they know what’s best

maybe they just don't want to be out of a job.... lol

[artemis]

Brinkmanship?

A way to bring STU board to the table?

Or possibly FBU was too hasty with the revised offer. Certainly wasted no time in withdrawing it.

It ain't over yet, I predict.

[trader_jackson]

Over 20 minutes later and STU still haven't announced anything...

They giving FBU a call apologising for there arrogance and begging them for a deal at $2.10?

[boysy]

Very odd doesn’t reflect well on either party does it ?

[blackcap]

I am surprised people are still willing to pay $1.40 right now, given that prior to these rumours/announcements people were barely willing to pay mid $1.20's

[/SIZE]

That is because before these rumours/announcements, there was nothing to suggest that anyone might be remotely interested in STU. That perception has changed, especially now that we know that FBU had put an offer of $1.90 on the table. (after an initial offer of $1.70). I guess you could call the extra 30 cents a "potential takeover premium".

[ddrone]

We have an implied value of at $1.90 per share here right - how that can be a bad thing?

[Beagle]

Very odd doesn’t reflect well on either party does it ?

Scraggly mutts the pair of them.

[winner69]

Brinkmanship?

A way to bring STU board to the table?

Or possibly FBU was too hasty with the revised offer. Certainly wasted no time in withdrawing it.

It ain't over yet, I predict.

Might go the hostile way and let shareholders decide

[boysy]

Yep you wonder if FBU are looking to buy a stake and go hostile on the board .... could be an interesting ASM next Thursday ....

[steveb]

I can see that reverse takeover happening now STU have found the $7 billion and are just finalising the terms!!

[Marilyn Munroe]

Some advice to the Commerce Commission;

If the merger goes ahead where there are now two warehouse or distribution premises in the same area one of them must be immediately divested.

Where the premisses are owned they must be sold without any restraint of trade conditions.

Where leased they must surrender the lease when the landlord finds a new tenant even if this tenant will compete with the merged entity.

If the closed premises have any cutting, folding, machining or materials handling equipment it must be held in situ and be available for sale on an unconditional basis. Any scrapping of this equipment will require the approval of the commission.

Boop boop de do
Marilyn

[blackcap]

What seems really strange to me is that STU has not informed the market that FBU has withdrawn its offer. That should have come out at the same time, as it would be material one would think. Or did FBU not even inform the STU board that it had withdrawn its offer? WOW!

[Filthy]

What seems really strange to me is that STU has not informed the market that FBU has withdrawn its offer. That should have come out at the same time, as it would be material one would think. Or did FBU not even inform the STU board that it had withdrawn its offer? WOW!

maybe they are still out to lunch...

[Balance]

What seems really strange to me is that STU has not informed the market that FBU has withdrawn its offer. That should have come out at the same time, as it would be material one would think. Or did FBU not even inform the STU board that it had withdrawn its offer? WOW!

It has gotten antagonistic.

[Scrunch]

Might go the hostile way and let shareholders decide

Agree. FBU have withdrawn a proposal for a scheme of arrangement that was dead in the water anyway as it needed the endorsement of the STU board. If Fletcher walked away from any potential takeover when the targets management/board said they didn't like the offer they would never have become the conglomerate they are.

[boysy]

Still nothing that’s a decent long lunch those STU boys and girls are having. What a shambles so they managed to infuriate FBU from 8-30am then FBU pull the pin over 2 hours ago and not a peep from STU ...

[Snow Leopard]

Gosh. This is more dramatic than Shortland Street !!


Disc: I have never watched Shortland Street

[Jantar]

Still nothing that’s a decent long lunch those STU boys and girls are having. What a shambles so they managed to infuriate FBU from 8-30am then FBU pull the pin over 2 hours ago and not a peep from STU ... Does it really matter that FBU have withdrawn the offer? STU board had already rejected it, so it wasn't a happening thing anyway. What it does mean is that both STU and FBU boards agree that that the STU shares are worth at least $1.95.

[trader_jackson]

Over 20 minutes later and STU still haven't announced anything...

They giving FBU a call apologising for there arrogance and begging them for a deal at $2.10?

I find it extraordinary that the share price is still about 20% higher than it was 3 weeks ago, all simply and only due to speculation on a potential (far from done deal!) takeover offer from only 1 company.


I know it, you know it, we know it that management have told us for months the share price is worth north of $2, and nobody believed it just over 3 weeks ago! So for FBU (a company who has a track record of overpaying) to maybe offer up to $1.95 doesn't mean that much to me, unless they follow through of course.


Not too keen to pay 20% premium for something to maybe happen, however, things are quiet... too quiet.

[winner69]

At least not many punters got sucked in first thing this morning

[winner69]

Does it really matter that FBU have withdrawn the offer? STU board had already rejected it, so it wasn't a happening thing anyway. What it does mean is that both STU and FBU boards agree that that the STU shares are worth at least $1.95.

STU say FNZC reckon it could be worth as much as $2.35 (plus synergies)

Plenty of dreamers in this world eh

[Beagle]

STU say FNZC reckon it could be worth as much as $2.35 (plus synergies)

Plenty of dreamers in this world eh

Yeap it crossed my mind to have a punt and I am really pleased I decided that this pedigree dog does not play with mutts. My investment mantra has saved me again "No if's and no but's, hold no mutts"
The same FCNZ that reckon FBU shares are worth $9 lol. The market is saying there's a VERY long road ahead for both companies to build their credibility back to some sort of reasonable level and I think the market in both cases is spot on ! One ugly sister taking over another one doesn't necessarily make a case of one plus one equals three. Some of FBU's previous attempts to extract synergies have been abysmal failures so now they have to sell them off because they can't manage them properly...but they're in a hurry to make another acquisition even before they've divested themselves of past failures...go figure.

[Balance]

Yeap it crossed my mind to have a punt and I am really pleased I decided that this pedigree dog does not play with mutts. My investment mantra has saved me again "No if's and no but's, hold no mutts"
The same FCNZ that reckon FBU shares are worth $9 lol. The market is saying there's a VERY long road ahead for both companies to build their credibility back to some sort of reasonable level and I think the market in both cases is spot on ! One ugly sister taking over another one doesn't necessarily make a case of one plus one equals three. Some of FBU's previous attempts to extract synergies have been abysmal failures so now they have to sell them off because they can't manage them properly...but they're in a hurry to make another acquisition even before they've divested themselves of past failures...go figure.

Picked a few more today.

Let the games unfold!

[GR8DAY]

Well that was an expensive fishing trip i went on this morning! Set out after reading the news of a higher offer for my 15k shares I bought last week. Came home (with no fish) this afo to find my $3k paper profit has disappeared......BUGGER! shudve sold THEN gone fishing. So all in all a rather crap day. Having said that tho I still believe there's 50c a share profit sitting there.......FBU have done the ground work for a slightly higher offer now ($2.10?) which Im sure the board will recommend and be seen to be playing hard ball. Clever play FBU.

[Scrunch]

Yes let's. Someone in Fletcher must have written a damn fine board paper to get the Fletcher board looking at acquisitions when they are also trying to divest assets and reduce borrowing. Are Fletcher going to abandon now? The shear speed with which a lumbering corporate moved indicates their cancellation of the offer was preplanned and delegated to a single person.

[Beagle]

Well that was an expensive fishing trip i went on this morning! Set out after reading the news of a higher offer for my 15k shares I bought last week. Came home (with no fish) this afo to find my $3k paper profit has disappeared......BUGGER! shudve sold THEN gone fishing. So all in all a rather crap day. Having said that tho I still believe there's 50c a share profit sitting there.......FBU have done the ground work for a slightly higher offer now ($2.10?) which Im sure the board will recommend and be seen to be playing hard ball. Clever play FBU.

You've got to be an optimist to be a fisherman. There's an old saying, "a bad day's fishing is better than a good day at work"...although that's doesn't always hold true as I witnessed a boat not being secured properly while being towed away from the boat ramp the other day and it fell off the trailer and smashed up the engine and hull. Probably cost him more than $3,000, feel better now :)
STU directors are dreamers and they and senior management simply want to keep their snouts in the trough for as long as possible..its really that simple. What shareholders want is something that I doubt even figures in their thinking.

[Balance]

Yes let's. Someone in Fletcher must have written a damn fine board paper to get the Fletcher board looking at acquisitions when they are also trying to divest assets and reduce borrowing. Are Fletcher going to abandon now? The shear speed with which a lumbering corporate moved indicates their cancellation of the offer was preplanned and delegated to a single person.

STU really left FBU with no choice if you read FBU's increased/revised offer to STU - which is that the proposal is to be treated as confidential and as a basis for negotiations. STU promptly released the offer on the basis that FBU has had discussions with some institutional shareholders and so the rest of the market should be fully informed.

What STU has done is to ratchet up the sp with the release making FBU's offer (again) look not as attractive - as if the sp has stayed at $1.50.

So FBU has pulled the offer which means that sp falls back to the $1.50 type level.

A hostile bid by FBU (nothing to stop them making such a bid) at $1.95 will look most attractive with sp at say, $1.45.

More twists and turns ahead.

[Beagle]

Maybe possible Balance but don't overlook the political environment and Cindy's Kindy having their influence on Com Com.
Perhaps they'll suggest Com Com appoint a working group and report back in 2020 like all their other ones :D

[Timesurfer]

Well that was an expensive fishing trip i went on this morning! Set out after reading the news of a higher offer for my 15k shares I bought last week. Came home (with no fish) this afo to find my $3k paper profit has disappeared......BUGGER! shudve sold THEN gone fishing.

I hear that. I was watching to see where it went after the initial flurry. I decided to drop mine on the market at 1cent above trading and not be greedy - then it all went south and I was left wishing I just hit the sell button!
Not that I am too worried about still holding them, but I see some of the shares I was looking at switching to rocket away today just to rub salt in the wound!

[Balance]

Maybe possible Balance but don't overlook the political environment and Cindy's Kindy having their influence on Com Com.
Perhaps they'll suggest Com Com appoint a working group and report back in 2020 like all their other ones :D

For sure! No risk, no gain!

[blackcap]

STU really left FBU with no choice if you read FBU's increased/revised offer to STU - which is that the proposal is to be treated as confidential and as a basis for negotiations. STU promptly released the offer on the basis that FBU has had discussions with some institutional shareholders and so the rest of the market should be fully informed.

What STU has done is to ratchet up the sp with the release making FBU's offer (again) look not as attractive - as if the sp has stayed at $1.50.

So FBU has pulled the offer which means that sp falls back to the $1.50 type level.

A hostile bid by FBU (nothing to stop them making such a bid) at $1.95 will look most attractive with sp at say, $1.45.

More twists and turns ahead.

The next AGM will be fascinating with the two largest shareholders obviously not on board with this board, pardon the pun. Could be fireworks.

[Beagle]

For sure! No risk, no gain!

For sure but ask the guys who bough this morning at $1.70 + how they're feeling and they'll probably tell you that there's better odds and far more transparency at one of Sky City's roulette wheel's. At least you know what the rules and odds are, these companies seem to make them up as they go !

[traineeinvestor]

For sure but ask the guys who bough this morning at $1.70 + how they're feeling and they'll probably tell you that there's better odds and far more transparency at one of Sky City's roulette wheel's. At least you know what the rules and odds are, these companies seem to make them up as they go !

I'd say the people who paid up pre FBU announcement didn't pay enough attention to the "indicative" and "non-binding" language.

Question: the local Takeovers Code where I live has a 6 month cooling off period before someone who announced a possible offer and decided not to proceed is allowed to make a new offer. Does anyone know if the NZ Code has a similar provision?

[Balance]

For sure but ask the guys who bough this morning at $1.70 + how they're feeling and they'll probably tell you that there's better odds and far more transparency at one of Sky City's roulette wheel's. At least you know what the rules and odds are, these companies seem to make them up as they go !

But ask the guys who sold at $1.70+ and they will tell you they either read the situation better or they were happy to take their gains after buying at $1.20 when nobody was keen on STU.

That's the game, Beagle - if the kitchen's too hot, best to stay out!

[trader_jackson]

First thing yesterday STU were only to happy to announce the $1.95 offer and how it still isn't sufficient... STU did not bother to try keep it a secret (something it became apparent FBU wanted) or even mention they were meant to keep it secret, and instead rushed to trumpet the new offer and how it still isn't high enough.

It almost seems STU are in denial that management have 'blown it' as there has still no announcement that FBU have retracted the non binding indicative offer.

If I were FBU, I too would be pissed off with STU's implied arrogance and follow through with not doing anything... for months, maybe several months, wait for the share price to fizz out and then accumulate. No point rushing this one, STU management are clearly so confident in their plans they clearly don't have any worries either (or at least this is how they want it to look...)

Then again, shareholders can't be worried even if management did just blow a quick and easy deal... STU's management are clearly confident
Was interesting the market didn't share such bigly confidence just three weeks ago.

[boysy]

Clearly FBU will now simply bypass STU management and go hostile. Will we see FBU hoovering shares on market is the next question ...

[Beagle]

I'd say the people who paid up pre FBU announcement didn't pay enough attention to the "indicative" and "non-binding" language.

Question: the local Takeovers Code where I live has a 6 month cooling off period before someone who announced a possible offer and decided not to proceed is allowed to make a new offer. Does anyone know if the NZ Code has a similar provision?


Non binding and indicative is language that's not new to me so I wasn't prepared to put my hand up for any. Really the question is should such a speculative attempt at a takeover ever been played out in public ? Clearly FBU directors think not, whereas STU directors took a different view, probably because they've been so "transparent" about their problems in the past, (sarcasm intended).

Not aware of any such provision in our takeovers code but not pretending to have a good knowledge of it either.

Absolutely, Balance, one must make a decision whether they want to get involved with the shenanigans of the inept and its even uglier cousin in the industry or stick to investing in quality companies where companies have a long and credible track record of doing what they say they'll do. One is trading and speculation, the other investing.

I merely comment because I find these sort of corporate fiasco's amusing and perhaps my warning yesterday about possible Cindy's Kindy political influence of Com Com gave some food for thought to those tempted to pay up at over $1.70 and saved someone's bacon ? We'll never know but I am sure you would agree it never hurts to have a robust debate from all different perspectives :)

I agree the investment bankers will be raking over the coals of this proposed deal like a school of hungry piranha's looking for their next juicy feed...but there's no guarantee whatsoever that the two ugly cousins will wed or that Com Com will give its blessing at the alter. Remember too that while few would argue that there's a high degree of competence at the senior level's of those investment banking firms serious questions exist about whether the boards of FBU and STU are of the very highest caliber...and then there's questions about whether people simply want to stay in their jobs at STU so they can keep their snouts in the trough as long as possible.

[Balance]

Non binding and indicative is language that's not new to me so I wasn't prepared to put my hand up for any. Really the question is should such a speculative attempt at a takeover ever been played out in public ? Clearly FBU directors think not, whereas STU directors took a different view, probably because they've been so "transparent" about their problems in the past, (sarcasm intended).

Not aware of any such provision in our takeovers code but not pretending to have a good knowledge of it either.

Absolutely, Balance, one must make a decision whether they want to get involved with the shenanigans of the inept and its even uglier cousin in the industry or stick to investing in quality companies where companies have a long and credible track record of doing what they say they'll do. One is trading and speculation, the other investing.

I merely comment because I find these sort of corporate fiasco's amusing and perhaps my warning yesterday about possible Cindy's Kindy political influence of Com Com gave some food for thought to those tempted to pay up at over $1.70 and saved someone's bacon ? We'll never know but I am sure you would agree it never hurts to have a robust debate from all different perspectives :)

I agree the investment bankers will be raking over the coals of this proposed deal like a school of hungry piranha's looking for their next juicy feed...but there's no guarantee whatsoever that the two ugly cousins will wed or that Com Com will give its blessing at the alter.

Those who paid $1.70 were playing on 25c to 55c upside vs 25c downside.

Beats going to the casino where your odds of winning is pre-defined and pre-determined at 40% to 50% loss!

[blackcap]

Beats going to the casino where your odds of winning is pre-defined and pre-determined at 40% to 50% loss!

Agree the STU odds were good, but Casino odds on roulette are about 3% or 6% pre-determined, and on blackjack its closer to 0% pre-determined. It depends which game you end up playing.

[steveb]

FBU will want to tie up the main institutional holders like harbour milford and ACC before going hostile but given the amount of shares in the general publics hands certainly a hostile takeover is on the cards.

[Balance]

Agree the STU odds were good, but Casino odds on roulette are about 3% or 6% pre-determined, and on blackjack its closer to 0% pre-determined. It depends which game you end up playing.

Yup - put $10k on number 20 and hope like hell that number 20 comes out of 37 numbers! I work that out though at more like 2.6%?

[Beagle]

The deal was $1.95, anything more is pure speculation on your part. Upside was therefore 25 cps but would probably take 6 months to clear the regulatory hurdles so a 14.7% gain in six months with all the uncertainty involved while facing a (probably back to where this started at $1.40) = 30 cent downside is not as attractive objectively as you suggest.

Roulette wheel with one green zero has a 2.7% house advantage. What was insiders advantage in this fiasco so far ? Level playing field for all ?