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  1. #2471
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    Quote Originally Posted by Rep View Post
    Snoopy - thoughts?

    One proposition is that given that Finaccess will achieve control, those shareholders who held out and wish to continue to hold could adopt the position that should accept the offer at $9.45 to realise the control premium on their holdings and then reacquire the original number of shares they had afterwards at the listed price less the control premium from the remaining float.

    Some shareholders may find if there is scaling on the extended offer that they end up with small holdings that don’t want (or potentially below the min holding) so may wish to exit these holdings so there may be a bargain or not.
    The fact that some people may be left with small holdings that they wish to dispose of has always been the result of this partial takeover bid, once it has become clear that scaling is going to happen.

    The market share price closed yesterday at $8.80. That is very close to the $8.89 in my post 2439, which I consider the real value of the bid. There is such a thing as 'minimum brokerage'. So I think there is now a case for those holders in danger of being stuck with a below minimum size holding to sell now on the market, effectively realising their premium from the 'Global Valar' on the market today.

    On the eve of the offer closing, I would expect the share price to approach $8.89. Immediately after the offer closes, I would expect the price for the remaining shares to drop back to $7.60 (being the market price the day before Global Valar offer) all things being equal. But of course, all things are not equal, because we are about to learn the result for the FY2019 financial year in April. The sales figures already released look good. I wouldn't be surprised if the intrinsic value of the remaining shares is now greater than $7.60.

    In the short term, the share price will be driven by supply and demand. After the offer the free float of RBD will reduce from approximately $1b to $250m. It is likely this will see RBD fall out of the NZX50 (although I could be wrong, it is on the cusp). That could trigger the index funds to sell their residual holdings. My hunch is that immediately after the takeover closes may not be the best time to top up one's holding because of this reason.

    I am unclear what the position of the index funds is now. My broker suggested that they will offer up only 75% of their shares into this unconditional offer and retain the remaining 25% until the index issues become clear. I would be interested if anyone can clarify the index funds' positions in a partial takeover like this.

    SNOOPY
    Last edited by Snoopy; 13-03-2019 at 08:30 AM.
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  2. #2472
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    I will seek to sell all my holding. It has already been a very good long-term investment for me. However it is a shame that yet another kiwi company slips out of Kiwi shareholders control.

  3. #2473
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    On the application I allowed up to all my shares to be bought. Even if I want more later I can reconsider that in the future ...

  4. #2474
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    Quote Originally Posted by Bjauck View Post
    I will seek to sell all my holding. It has already been a very good long-term investment for me. However it is a shame that yet another kiwi company slips out of Kiwi shareholders control.
    "As at 12 March 2019, the total number of acceptances of the Offer is now 91,080,599 Shares comprising 73.01% (rounded to two decimal places) of the Shares."

    So by the expiry of the original takeover date, Global Valar were short of their original 75% target. That is quite staunch resistance and I take my hat off to the 'remain in NZ hands' brigade who have not accepted the offer up until now. However, Bjauck has indicated that he will be joining me in 'sellout scum' street. And no doubt there will be others.

    The interesting point in all of this is that up until the partial takeover bid, there weren't many unhappy RBD shareholders. There was no underlying appetite to sell out and no recent management stumbles (maybe Carls?). So I am picking that quite a few of you that 'sell down' will be looking to buy back into the remaining free float of shares which are left. That means I am expecting the share price to rise from the theoretical $7.60 post offer until that residual index fund selling kicks in. But if the initial rise is high enough, there may not be any need for index fund selling?

    SNOOPY
    Last edited by Snoopy; 13-03-2019 at 08:47 AM.
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  5. #2475
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    Quote Originally Posted by Snoopy View Post
    "As at 12 March 2019, the total number of acceptances of the Offer is now 91,080,599 Shares comprising 73.01% (rounded to two decimal places) of the Shares."

    So by the expiry of the original takeover date, Global Valar were short of their original 75% target. That is quite staunch resistance and I take my hat off to the 'remain in NZ hands' brigade who have not accepted the offer up until now. However, Bjauck has indicated that he will be joining me in 'sellout scum' street. And no doubt there will be others.

    The interesting point in all of this is that up until the partial takeover bid, there weren't many unhappy RBD shareholders. There was no underlying appetite to sell out and no recent management stumbles (maybe Carls?). So I am picking that quite a few of you that 'sell down' will be looking to buy back into the remaining free float of shares which are left. That means I am expecting the share price to rise from the theoretical $7.60 post offer until that residual index fund selling kicks in. But if the initial rise is high enough, there may not be any need for index fund selling?

    SNOOPY
    I will be looking to buy back in again too. Not an unhappy shareholder at all. With my $9.45 I will be looking to buy back in at anything under $8.50 and increase my holding.

  6. #2476
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    Quote Originally Posted by blackcap View Post
    With my $9.45 I will be looking to buy back in at anything under $8.50 and increase my holding.
    You won't be the only one blackcap.

    Last years earnings were 32.7cps. So the $8.50 you are prepared to pay puts this on an historical PE of 26. There is quite a bit of future growth that you are banking to justify paying a share price like that!

    Of course, that is not to say such growth is unattainable. But our Russel has already admitted that expansion by acquisition is not as profitable as expansion by organic growth. He has sort of hinted that down the line there will be a capital raising. Discounted shares will be available at that point I think. But when will that be? And how much will RBD raise? All unknown. The trigger might be RBD purchasing some KFC outlets on the western side of the United States.

    Taco Bell has been put on hold in NZ for years. But all I see is a cashflow drain for many years if TB comes to NZ. Reading between the lines, it looks like parent YUM is pushing for this rather than RBD itself. I have said before that when the Taco Bell tolls, that might be an exit signal for RBD shareholders!

    Nevertheless I think that YUM has great faith in our Russel, to the extent they regard him as a cult figure who must be kept at almost any cost. Hence the $1m after tax payment to retain him to align his interests with shareholders (sic) so far. Added to that is the early vesting of his share options that were due to be cashed in only when the RBD share price got to $10 (now apparently $9.45 or is that $8.90 is suddenly enough).

    When I buy something I like to stack it up against a measuring stick. If I look to the far east and China, I see Yum China (NYSE:YUMC) trading at $41.14 on my projected normalised NPAT for the year just gone of $1.61. That equates to a PE of 25.5. YUMC is twenty times the size of RBD. But to my mind, the growth path ahead has less risk. All YUMC has to do to triple in size is 'just keep doing exactly as they are doing'. No capital injections in the future required. I see far more execution risk for the future at RBD. So for me, topping up on RBD at $8.50 would be too high a price to pay.

    SNOOPY

    PS Not recommending buying YUMC at these price levels either!
    Last edited by Snoopy; 13-03-2019 at 08:05 PM. Reason: Added PS
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  7. #2477
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    Quote Originally Posted by Snoopy View Post
    "
    So by the expiry of the original takeover date, Global Valar were short of their original 75% target.
    SNOOPY
    And the day after the original offer closed it increases to 86%? Seems a bit fishy to me. Might see retracement today back towards your "true offer" price.

  8. #2478
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    Quote Originally Posted by weasel View Post
    And the day after the original offer closed it increases to 86%? Seems a bit fishy to me. Might see retracement today back towards your "true offer" price.
    Blame NZ Post?

    For sure, if people think:

    1/ They are going to sell significantly more of their own shares into the offer than they first thought, then they would be rational to pay more on market pre-offer than
    2/ If they buy on market assuming only 75% of the shares they tender will be accepted.

    But the more shares that are tendered, the more any implied market premium for being able to sell more shares to 'Global Valar' will reduce.

    Reworking my 'before' and 'after' value equation, we can see how the 'remainder price' (RP) and 'market price' (MP) relate to each other. I use the $9.08 share price ('Market Price' MP), which is where RBD is trading as I write this:

    ($RP+3x $9.45)/4 = $MP

    ($RP+3x $9.45)/4 = ($9.08) => RP= $7.97

    You can add 10c onto the remainder price. That is the 'foregone dividend' that those shareholders who have their shares accepted into the offer will never get back. Effectively the market is now telling us that the price for the remaining shares after the takeover is done and dusted, should be $8.07. Whether that is fair or not depends on how the results for the financial year just finished scrub up when they are presented in April (no doubt after the takeover is over).

    SNOOPY
    Last edited by Snoopy; 14-03-2019 at 08:24 PM.
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  9. #2479
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    Quote Originally Posted by Snoopy View Post
    For sure, if people think:

    1/ They are going to sell significantly more of their own shares into the offer than they first thought, then they would be rational to pay more on market pre-offer than
    2/ If they buy on market assuming only 75% of the shares they tender will be accepted.

    But the more shares that are tendered, the more any implied market premium for being able to sell more shares to 'Global Valar' will reduce.

    Reworking my 'before' and 'after' value equation, we can see how the 'remainder price' (RP) and 'market price' (MP) relate to each other. I use the $9.08 share price ('Market Price' MP), which is where RBD is trading as I write this:

    ($RP+3x $9.45)/4 = $MP

    ($RP+3x $9.45)/4 = ($9.08) => RP= $7.97

    You can add 10c onto the remainder price. That is the 'foregone dividend' that those shareholders who have their shares accepted into the offer will never get back. Effectively the market is now telling us that the price for the remaining shares after the takeover is done and dusted, should be $8.07. Whether that is fair or not depends on how the results for the financial year just finished scrub up when they are presented in April (no doubt after the takeover is over).
    Wow, share price closing at $9.20 today. This is getting a bit crazy. Starting to think I should not have accepted the offer at all and just sold everything on market!

    The more shares that are tendered, the more any implied market premium for being able to sell more shares to 'Global Valar' should reduce. As of today 87.1% of shares have been accepted, so this theory is looking a little fragile.

    Reworking my 'before' and 'after' value equation, we can see how the 'remainder price' (RP) and 'market price' (MP) relate to each other. I use the $9.20 share price ('Market Price' MP), which is where RBD is trading as I write this:

    ($RP+3x $9.45)/4 = $MP

    ($RP+3x $9.45)/4 = ($9.20) => RP= $8.45

    You can add 10c onto the remainder price. That is the 'foregone dividend' that those shareholders who have their shares accepted into the offer will never get back. Effectively the market is now telling us that the price for the remaining shares after the takeover is done and dusted, should be $8.55. Whether that is fair or not depends on how the results for the financial year just finished scrub up when they are presented in April (no doubt after the takeover is over). It seems some of those on market buyers must be expecting a very favourable result

    SNOOPY
    Last edited by Snoopy; 19-03-2019 at 08:58 PM.
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  10. #2480
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    FWIW today my full service broker revealed that there is strong interest from those that tendered their stock into the Global Valar offer to buy back in to RBD.

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