Comvita - CVT

[Beagle]

Given the share price sensitivity of this forecast update, the Comvita Board
believes it is obliged at this time, to disclose that Comvita is party to a
Confidentiality Agreement with a third party, pursuant to a due diligence
process currently being conducted on the Company. This process, which has
been ongoing for several months, is to enable the third party to assess the
potential acquisition of all or substantially all the shares in Comvita,
whether by way of takeover, scheme of arrangement, amalgamation or other
business combination.

What they said in mid April. It strikes me that this has now become unusually protracted. given that due diligence had already run several months in mid April.
Perhaps the buyer is absolutely dazzled and trying to wrap their head around CVT's "world class" management systems and procedures.
This is starting to look rather ominous for shareholders. I struggle to see the value in a company with clearly defined horticultural risks trading at 35 times current year earnings and its looks like the buyer might be struggling to see the common sense of that too.
Sure some of their products are actually quite good but 35 times is too rich, a bit like their overtly optimistic forecast of $400m sales by 2021, or have they quietly pushed that target year out again already ?

[Balance]

What they said in mid April. It strikes me that this has now become unusually protracted. given that due diligence had already run several months in mid April.
Perhaps the buyer is absolutely dazzled and trying to wrap their head around CVT's "world class" management systems and procedures.
This is starting to look rather ominous for shareholders. I struggle to see the value in a company with clearly defined horticultural risks trading at 35 times current year earnings and its looks like the buyer might be struggling to see the common sense of that too.
Sure some of their products are actually quite good but 35 times is too rich, a bit like their overtly optimistic forecast of $400m sales by 2021, or have they quietly pushed that target year out again already ?

" ....... we should expect to be in a position to further update the market by mid-May 2018".

2 days past mid-May 2018 and no update.

Have a suspicion that deal is off and management are drafting statement of 'excuses' to explain?

Very successful old timer investor told me years ago about takeover deals - 'the good ones happen very quickly'.

2 days past mid May when CVT stated it expected to be update the market.

[Balance]

I hope someone who is a shareholder of Comvita has sent a request to either Comvita or NZX or FMA to remind them of Comvita's continuous disclosure obligation.

Having let the 'cat' out of the bag with extremely favorable price impact, Comvita will be well aware that if the potential acquirer walks away - the sp is going to tank.

Many days past the 'update the market by mid-May 2018' - especially when you consider that the potential acquirer has been doing due diligence for many months.

[Beagle]

I hope someone who is a shareholder of Comvita has sent a request to either Comvita or NZX or FMA to remind them of Comvita's continuous disclosure obligation.

Having let the 'cat' out of the bag with extremely favorable price impact, Comvita will be well aware that if the potential acquirer walks away - the sp is going to tank.

Many days past the 'update the market by mid-May 2018' - especially when you consider that the potential acquirer has been doing due diligence for many months.

Yes if one were to take the view that May is equally divided in three parts into early May 1-10 May, Mid May 11-20 May and late May 21-31 May then clearly if there is no announcement by Monday the very least CVT should do (if they are interested in good governance) is to update the market on where this thing is at.

[Balance]

Yes if one were to take the view that May is equally divided in three parts into early May 1-10 May, Mid May 11-20 May and late May 21-31 May then clearly if there is no announcement by Monday the very least CVT should do (if they are interested in good governance) is to update the market on where this thing is at.

No announcement yet to place stock in trading halt - seems to be no takeover deal?

The Chinese (if indeed it is them) will be wanting their pound of flesh after buying in at $10 plus on huge potential which has been dissipating with each passing year?

In their shoes, I would pull the plug and let the sp fall (my pick - $2.50 down) and let the market sweat it out.

[Beagle]

No announcement yet to place stock in trading halt - seems to be no takeover deal?

The Chinese (if indeed it is them) will be wanting their pound of flesh after buying in at $10 plus on huge potential which has been dissipating with each passing year?

In their shoes, I would pull the plug and let the sp fall (my pick - $2.50 down) and let the market sweat it out.

I think this is yet another shocking example of the companies lack of respect for the continuous disclosure requirements of the NZX.
Time after time we have had really shocking downgrades, the extent of which really stretches credibility that management wouldn't have known a severe downgrade was coming a lot earlier than when it was officially announced to the market. Perhaps downgrades should be monthly in future, (assuming they are actually using 21st century accounting systems and are doing monthly accounts), but really as mentioned earlier they should simply cease giving any forward guidance whatsoever in the future because its quite clear they have very limited, if any, forward visibility.

I know Forest went to one of the annual meetings and came away unhappy with the "answers" he received so its not like they give you the real story in person either.

[winner69]

It all started turning to custard for CVT when they changed their balance date a few years ago

Gave them a couple of years grace in hiding things .....like confusing the market with normalised earnings over different periods and all that sort of stuff.

I think they even confused themselves.

That was a red flag.

[forest]

Yeah they seem to confuse themselves also by thinking SEA is worth investing in. Or is that donating to?

[forest]

Balance you are so right, CVT just announced : The subsequent discussions between Comvita and that third party have now concluded with no agreement on a transaction. The due diligence process and further consideration of any proposal to acquire Comvita, is now at an end.

[winner69]

Good they ‘captured valuable insights’ about global markets