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03-06-2018, 05:32 PM
#711
Originally Posted by blackcap
That premium was mentioned at the AGM. From memory its 6 cents for a normal seedling, 25 cents for a Arborgen one.
Sounds about right. I had 400% in my mind but didn't want to quote that figure without being able to find where it originated. It'd be interesting to know the margin difference. If they're both getting say a 50% margin the difference in net earnings would be considerable.
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03-06-2018, 05:36 PM
#712
Originally Posted by iceman
That's a very substantial premium and the upside potential quite large when one is selling close to 400m seedlings pa. Do we know what percentage of seedlings sold today by ArborGen are advanced-genetics ?
And the other issue is, as t.rexjr points out above, is whether advanced-genetics seedlings will grow the overall market or just result in fewer and more efficient seedlings being sold. I'd expect the former.
50% less trees at 200% more profit shouldn't be a big issue given operational costs would be fairly similar
Last edited by t.rexjr; 03-06-2018 at 05:38 PM.
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03-06-2018, 05:48 PM
#713
Originally Posted by t.rexjr
50% less trees at 200% more profit shouldn't be a big issue given operational costs would be fairly similar
Remembering also that the 34% advanced genetic sales is 'Arborgen sales' not industry sales. If these seedlings are the future then maintaining sales volume is quite plausible.
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03-06-2018, 06:48 PM
#714
Taking the adoption to high genetic from 60% to 80% from year 10 adds $55m to their $345m ‘valuation’
We’re talking 80 cents now
All too good to be true? Who knows
Best and quickest outcome for shareholders has to IPO / sell Arborgen (to greater fools?)
Otherwise I fear years and years of if only and it’s gunna to do this etc.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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03-06-2018, 06:57 PM
#715
Originally Posted by winner69
Taking the adoption to high genetic from 60% to 80% from year 10 adds $55m to their $345m ‘valuation’
We’re talking 80 cents now
All too good to be true? Who knows
Best and quickest outcome for shareholders has to IPO / sell Arborgen (to greater fools?)
Otherwise I fear years and years of if only and it’s gunna to do this etc.
The one bit I do not get, hopefully someone can still explain it to me. If Arborgen has such a great valuation (as per auditors notes etc) then why did the Arborgen shareholders sell it to Rubicon for a song and a dance?
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03-06-2018, 07:08 PM
#716
Originally Posted by blackcap
The one bit I do not get, hopefully someone can still explain it to me. If Arborgen has such a great valuation (as per auditors notes etc) then why did the Arborgen shareholders sell it to Rubicon for a song and a dance?
Not for a song and dance ...officially a ‘bargain purchase’
But a very good question BP
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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03-06-2018, 08:01 PM
#717
Originally Posted by blackcap
The one bit I do not get, hopefully someone can still explain it to me. If Arborgen has such a great valuation (as per auditors notes etc) then why did the Arborgen shareholders sell it to Rubicon for a song and a dance?
It explains they were bound by governing agreements in the Annual report
The reason the purchase price, in this instance, does not reflect the fair value of the ArborGen business acquired is because an orderly sales process was not run for the business. This was due to the unique nature of the then governing ArborGen shareholders’ agreement, which included strong pre-emptive rights overexisting partners’ interests in the event of a sale, and also minority veto rights in favour of the remaining partner. This meant that a 50.01% ownership interest would not have bought effective control of the business. Given Rubicon was not prepared to forgo these protective provisions, this in turn meant that the exiting partners were effectively unable to run a sales process for their respective shareholdings.
Exiting partners were hamstrung. Prior announcements by Rubicon stated the frustration with the partners lack of interest in the business and the inability for Rubicon to drive it. I always thought that was a bit of deflection, but it may well have been true and those partners were just waiting for a chance to exit. Given the setup that was only possible when Rubicon were in a position to buy it.
Why the lack of interest who knows. 17 years is a long time to remain enthusiastic...
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03-06-2018, 09:33 PM
#718
I tend to agree with the view of the Directors on this one. They got it at bargain basement prices, due to the structure of pre-emptive rights.
We shareholders now need to wait for the market to come to this conclusion also. IMO, the value could be extracted by an IPO, but apparently they aren't on this platform yet. They could get rid of the replication of governance IMO, by merging the 2 entities, and putting the R BoD on the pension, with the Yanks becoming part of A BoD
Last edited by Xerof; 03-06-2018 at 09:34 PM.
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07-06-2018, 03:58 PM
#719
Up 2% today. Probably worth another Price Enquiry. What happened to the last one?
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08-06-2018, 08:59 AM
#720
Originally Posted by minimoke
Up 2% today. Probably worth another Price Enquiry. What happened to the last one?
Could some kind person walk this very patient Rubicon shareholder through the process should Arborgen be floated in the USA and how value would flow to NZ shareholders.
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