STU - Steel & Tube Holdings

[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 ?