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Thread: KMD - Kathmandu

  1. #771
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    Quote Originally Posted by Harvey Specter View Post
    I would have though the opposite. More than 50% of the risk is being passed to BGR and KMD holders benefit from the diversification of retail brands than BGR has.

    Also, shareholders in KMD can either put their faith in a brand new CEO or in Duke who, while new to KMD, has significant experience in NZ retail.

    Fundamentally cash offer = takeover company takes on risk synergy risk, while share offer = target company takes on synergy risk.

  2. #772
    Speedy Az winner69's Avatar
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    All quite on the western front.

    Share price drifting down and quite a way off the 180. Probably following the BGR price down.

    Market suggesting the takeover a non-event?

    Or plenty of action soon.to get things going again.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  3. #773
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    Price could also be supressed due to some big players selling their stake e.g. National Bank of Australia.

    I'm expecting a psotivie reaction when KMD board makes their comments.

  4. #774
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    Quote Originally Posted by winner69 View Post
    Share price drifting down and quite a way off the 180. Probably following the BGR price down.
    Doesn't that suggest people think it will be successful as no arbitrage opportunity. If higher, then expect a better off or a competitive bid and lower suggests fail?

  5. #775
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    Quote Originally Posted by winner69 View Post
    Just as well there is such things as 'Chinese walls'

    Goldman been buying heaps of KMD lately / Goldman advising Kathmandu

    And didn't Goldman do well at the IPO? Part owners they were with Were and Quadrant. Got more than KMD worth today they did.

    Roger, those Quadrant guys pretty clever and know when to time exits eh.
    Those Quadrant boys are very clever...never get on the other side of a trade with them, you're the very short priced favourite to lose.
    I think the drift down in the SP is recognition of a number of factors.
    1. Market risk - Grexit
    2. BGR shareholders underwhelmed and not convinced shareholders will be able to extract synergies very quickly and in sufficient quantity to make the offer worthwhile...e.g. while over time as N.Z. leases expire its quite plausible that Rebel sport could incorporate the KMD stores within their store footprint AKA a store within a store, there's far more KMD stores in Australia so how do they extract synergies there ?
    3. KMD shareholders not impressed with the new proposed group structure and very low cash component, don't want a top heavy scrip offer and also not convinced regarding synergy execution
    4. Downwards market bias
    5. Take the money and run...so many other cheap shares out there
    6. Unlikely to be a more compelling bid or full cash bid in this difficult market
    All of the above.

  6. #776
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    One can only speculate, but I think the sell off is more of a reflection that the BGR offer is to low. Therefore, investors with a short-term focus are not wanting to hold.

    If you look at the cost of creating a company similar to Kathmandu and also its Earnings Power Value (EPV) with a concervative WACC of 15%, while also taking out any potential for growth, I still get a price at around $2.

  7. #777
    2019 NZ Stock Picking Winner silverblizzard888's Avatar
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    The reaction is the deal won't go through because the takeover offer is too low. Given they are being offered $1.72 given BGR share price today, the $1.60 is a big sign of sentiment that the deal won't go through and that everyone thinks the share price will head south when it blows over, thats what I get from the market sentiment anyway. It seems BGR shareholders aren't happy about the takeover in general cause that share price is heading way down.

  8. #778
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    Yes, it appears that Mr(s) Market needs to seek some counciling as he/she is likely to be diagnosed with schizophrenia. Selling something for less because it is worth more than offered is not something that someone with a stable mind would do.
    Last edited by pennyacw; 09-07-2015 at 12:12 PM.

  9. #779
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    I think your logic has gone a bit back to front & then front to back here Mr Blizzard - the take over is too low so the share price will head down if it fails? Hmmm. If it doesnt go through - it must be perceived to be worth more.

    Think there are alot more factors playing on the current SP.

  10. #780
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    Quote Originally Posted by TheHunter View Post
    I think your logic has gone a bit back to front & then front to back here Mr Blizzard - the take over is too low so the share price will head down if it fails? Hmmm. If it doesnt go through - it must be perceived to be worth more.

    Think there are alot more factors playing on the current SP.
    Indeed!

    Current market sentiment, for one!

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