ARB-ArborGen Holdings Ltd

[ari]

Finally something to report.....https://www.nzx.com/announcements/381921

[Sideshow Bob]

Finally something to report.....https://www.nzx.com/announcements/381921

Back to the future with Hugh Fletcher.

[Balance]

Back to the future with Hugh Fletcher.

Well, if Hugh Fletcher's acquisition tracks record when he was in charge of Fletcher Challenge is any guide, ArborGen would have just sold very very well!

Hugh was infamously known in the Western corporate world for paying too much for too many assets.

[Thistle72]

If the 15% of the company with a flat sales forecast is worth $22.25m, then the remaining 85% with a healthy growth outlook must be worth much more than the $127.5m implied equivalent. Shares remain undervalued.

This also clears the way for a switch to a US listing.

[LoungeLizzard]

If the 15% of the company with a flat sales forecast is worth $22.25m, then the remaining 85% with a healthy growth outlook must be worth much more than the $127.5m implied equivalent. Shares remain undervalued.

This also clears the way for a switch to a US listing.

That's what I was thinking - this may be preparing the ground for an eventual US listing. Personally I wouldn't like to see yet another NZ company de-list from NZX and NZ investors miss out on what I feel is a good growth path for ARB. Anybody - XER0 investors perhaps - know the mechanics of that process and whether local investors get shut out?

[t.rexjr]

If the 15% of the company with a flat sales forecast is worth $22.25m, then the remaining 85% with a healthy growth outlook must be worth much more than the $127.5m implied equivalent. Shares remain undervalued.

This also clears the way for a switch to a US listing.

Would that not imply that current market cap is about right? $150m for $85% of the company (sale proceeds more than likely disappearing into the abyss)

[biker]

Well, if Hugh Fletcher's acquisition tracks record when he was in charge of Fletcher Challenge is any guide, ArborGen would have just sold very very well!

Hugh was infamously known in the Western corporate world for paying too much for too many assets.

Quite so Balance. An indication on that alone that ARB got a good price.

[Thistle72]

Would that not imply that current market cap is about right? $150m for $85% of the company (sale proceeds more than likely disappearing into the abyss)

If all the assets were the same, yes, $150m would be about right for the total company value ($127.5m for 85% remaining + $22.5m cash).

But if you believe the press release, the business they are holding on to has much higher growth potential and should therefore be worth more. Presumably the cash will be put to work in building capacity to further expand. Maybe they can even build a nursery somewhere that is not in hurricane alley.

[Thistle72]

Grant Samuel's valuation of the Arborgen ANZ business is worth reading: http://nzx-prod-s7fsd7f98s.s3-websit...921/358173.pdf

One part of the "Future Opportunities" section caught my eye:

By selling ArborGen ANZ first this simplifies the ArborGen business. ArborGen will then be focussed on two countries, the US and Brazil. The Proposed Transaction would also likely reduce regulatory approvals required for a potential future transaction. In particular, by selling ArborGen ANZ first this may remove the requirement to obtain OIO approval in New Zealand if a sale of the remaining businesses were to occur.

Does the sale of the ANZ business make a sale of the whole company more likely? And does it have anything to do with the conditional offer received in June? The valuation report also reveals that the bidder is foreign (page 5), so prior to this sale, OIO approval would have been required for the deal to go through. Inquiring minds and shareholders would like to know!

I am not in favor of a sale and believe the greatest shareholder value will be realized with a US listing.

[Maxtrade]

Grant Samuel's valuation of the Arborgen ANZ business is worth reading: http://nzx-prod-s7fsd7f98s.s3-websit...921/358173.pdf

One part of the "Future Opportunities" section caught my eye:

By selling ArborGen ANZ first this simplifies the ArborGen business. ArborGen will then be focussed on two countries, the US and Brazil. The Proposed Transaction would also likely reduce regulatory approvals required for a potential future transaction. In particular, by selling ArborGen ANZ first this may remove the requirement to obtain OIO approval in New Zealand if a sale of the remaining businesses were to occur.

Does the sale of the ANZ business make a sale of the whole company more likely? And does it have anything to do with the conditional offer received in June? The valuation report also reveals that the bidder is foreign (page 5), so prior to this sale, OIO approval would have been required for the deal to go through. Inquiring minds and shareholders would like to know!

I am not in favor of a sale and believe the greatest shareholder value will be realized with a US listing.

Tend to agree with your comment that best option for shareholder would be US listing. It seems we are being left in the dark somewhat as to which is more likely, sale or potential US listing?

That said with either scenario any reason why SP seems to be struggling a bit to push up past 0.30 currently. Seems to be a bit of a bottleneck there. Wonder if those sellers don't think either of these scenarios are on the cards, because if they did wouldn't it make more sense to at least adjust their sell orders up closer towards 0.35.