Looking at the number of people trying to back out at 330 and the relative lack of depth, I wouldn't be too surprised to see it at sub 3 bucks today.
Well, the volume is not too shabby. One hour into trading and already more than 1% of all MET shares changed hands. Not sure, whether this is just mum and dad investors.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
That will depend on what international financial and investment markets look like. My recollection is that takeover activity normally builds during the economic cycle and decreases during recessions. If so, an alternative takeover is less likely... but still possible.
A lot of companies are raising big amounts of equity so this is going to gobble up a lot of cash that is looking for an investment market home. There's also a lot of companies now trading at a lot lower price than previously, so the candidate pool of companies with knocked-down share prices is a lot larger.
I think if you are buying this one at present, its because you think it gives good value for money exposure to the retirement sector, not because there's a potential takeover around the corner to save your bacon.
While I 100% agree with all of these points, to add a few more to the mix:
1. the NZD has weakened since Covid-19 started to impact financial markets
2. NZ is currently getting a lot positive press for our handling of the crisis - it raises the possibility of NZ being seen as a relatively safe haven/early recovery candidate
3. central banks are flooding the world with liquidity and interest rates are expected (by me at least) likely to relay lower for longer - much longer making funding cheap and depressing required returns
4. reading through the latest round of confusing substantial shareholder notices I can't tell how many shares the big institutions who tried to arbitrage the offer still hold (they no longer have to report after they drop below the 5% level). If (and it's a big speculative if) they collectively still hold a reasonable percentage, I could imagine an investor getting commitments to accept a new offer from them which would provide a degree of confidence that such an offer would succeed
5. lastly, it's not clear whether the current offer is in fact dead. While the bidder would not have withdrawn unless they had at least a defensible legal position, the comments on this thread show that's it's not a certainty.
Of course, this is all very speculative and I would not be buying back in in the hope that either the current offer will go ahead or a new offer will emerge but with the shares trading at less than half the NTA reported with the last interim results* and relatively little interest bearing debt, value is starting to emerge.
Disclosure: former holder tempted to get back in.
* not sure how big a haircut the last NTA number should be given in the current environment?
Well, if you're comparing NTA's then the equal of OCA@40 would be MET@<280
That's the only useful navigational marker we have at this point. Fair to say there's going to be a LOT of arbitrage players shares looking for a new home.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
That's the only useful navigational marker we have at this point. Fair to say there's going to be a LOT of arbitrage players shares looking for a new home.
Well, I feel with the people who thought buying in the 680'ies gives them a safe and well paid parking space for their money - but not sure I would sell now if I would be them.
Discl: bought a small parcel at 317 ...
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"Prediction is very difficult, especially about the future" (Niels Bohr)
FWIW ... sold this morning out of MET. Not that I am too concerned about the takeover failing, but I see limited further up potential for the share price, but some down potential in case the takeover turns for some reason to custard (like lack of OIO approval or ongoing anti virus fear attacks).
Given the current viral fear mongering tsunami across social media it just might be better to have some more cash at hand to mop up various stock bargains after they have been hammered down rather than waiting for receiving 12 cents more for the share in May ...
Love thy scaremongers and shorters ... well, I don't.
Originally Posted by Beagle
1. The longer we go on with no superior bid the less likely it is one will emerge. (likelihood of a superior offer is now lower than it was)
2. OIO approval is not a certainty by any means considering the deal involves ceding control over a substantial amount of land and housing to overseas control.
3. The virus is the new wild card and the fine print is quite vague on what constitutes an "adverse event"
4. Major institutional shareholders who had previously agreed to sell at $7 have sold significant parts of their holdings meaning its now less likely that the deal will get 75% shareholder approval
5. The markets are under the pump and I think its less likely a competing higher would be made in the current investment climate.
6. A 12 cent premium represents only an annual return of just over 5.3%, assuming the takeover proceeds are paid out on 31 May 2020.
7. If for any reason this deal falls over I see a potential downside of as low as $5.00
I have also carefully reconsidered the potential rewards and the not inconsiderable risks and decided its time to move on.
From 3 February 2020. Perhaps we should allow ourselves a small pat on the back selling at ~ $6.90
I don't think you are far off the mark at $3.17 but note you bought only a small parcel. I am thinking of dipping a paw in the water too but there's probably a VERY substantial overhang from disenfranchised arbitrage players so (oh my goodness), who knows how low it could go ?
OCA did get down to 38 cents at one point, (just 37.52% of its last reported NTA) so using that as the sole beacon of light by which to navigate, we could see 0.3752 x $7.00 = $2.63
Last edited by Beagle; 08-04-2020 at 12:33 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Keep in mind OCA was at 38 cents because global sentiment...it was 23 march...the world was in fear....NZ was preparing the lockdown.... newspapers were bombarding the market with negative news.....
I am thinking of dipping a paw in the water too but there's probably a VERY substantial overhang from disenfranchised arbitrage players so (oh my goodness), who knows how low it could go ?
Well, you did say in the shopping list thread "MET $3.50 (inept management and imminent takeover failure, needs to be half NTA to get me interested)" haha.
Originally Posted by Cyclical
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