KMD - Kathmandu

[winner69]

No macduffy your posts are definately Not in the T category, its all about attitude and motives at the end of the day

That's a relief for you eh macduffy ...

How do you see the takeover playing out?

[macduffy]

That's a relief for you eh macduffy ...

How do you see the takeover playing out?

Yes, feeling much better now, winner!

I can see this bid fizzling out. BGR will be left with a 20% stake and will have some influence in the KMD business. If there's no significant improvement there, the bid will be renewed at the appropriate time, probably on slightly different terms, and KMD shareholders may see the merits in going the Briscoes way. Or may not.

[pennyacw]

The words restructure = game changer.

Although one would expect these types of actions with a new CEO, the fact that a cost saving exercise is underway means that growth is off the cards. Two ways to create value 1) operational efficiency 2) revenue growth. I had previously looked at this stock as something close to $2 but now think it is more like $1.6. Their EBIT is not close to what it was and I can't see them increases this anytime soon. Still think $1.8 is a low ball offer for a well known brand and solid product offering if you take into account the ownership premium. Nevertheless, it is going to be a hard task to restructure are retail business like KMD, it is not like a finance or services company where distribution networks, store networks and decentralised staff numbers do not exist.

What puzzles me is their store positioning. In Melbourne they have a store just off swanson street and another one just around the corner. This is the same in other cities also. While this is obviously good in terms of cost efficiency with your distribution network it has made me think that KMD has fallen prey to IPO hype and store numbers leading executive decisions without strategic thoughts.

Might by back in if this stock falls low again, but sold out this morning at $1.7. Not going to play the takeover speculation game.

[sb9]

Note KMD is out of ASX 200, with S&P index rebalancing...

[Hawkeye]

http://www.nbr.co.nz/article/heat-no...short-p-178628

[macduffy]

Yes, feeling much better now, winner!

I can see this bid fizzling out. BGR will be left with a 20% stake and will have some influence in the KMD business. If there's no significant improvement there, the bid will be renewed at the appropriate time, probably on slightly different terms, and KMD shareholders may see the merits in going the Briscoes way. Or may not.

Kathmandu shareholders rejecting Briscoes' offer. No surprises there but meanwhile BGR posts another record profit.

http://www.nzherald.co.nz/business/n...ectid=11512816

[Beagle]

And now that the takeover is certain not to succeed KMD SP is heading south @ a quick rate of knots...what a surprise (NOT). Hard to believe people didn't see through KMD directors optimistic "talk" Talking their position up to protect their position at the trough ? You be the judge.

[longy]

Does anybody know since the total take over may not going to take place and to those already sent in their acceptance form to Briscoe... Is that mean Duke have bought the shares from those sellers? Thanks.

[Beagle]

Clauses in the agreement mean any acceptance by shareholders is not binding on Duke unless he gets to the magic 90% to enable compulsory acquisition of the rest. Acceptances by shareholders normally once signed cannot be revoked.
It is possible Briscoe's may waive the 90% condition, their option, unfortunately not yours. I suspect those who have signed acceptances are going to be disappointed and when their shares are available to them to sell they may express their disgust by doing exactly that. I suspect the smart money got out when the SP was close to $1.80 as it has been pretty clear for a while the economy is cooling off and it would appear pretty obvious to everyone other than the directors of KMD that they'll really struggle to lift profitability by 50% in the prevailing economic conditions. My crystal ball says Rod Duke get's this company cheaper next year or 2017 after the directors get all sorts of egg over their faces in terms of non delivery of the promised recovery.

[Harvey Specter]

Does anybody know since the total take over may not going to take place and to those already sent in their acceptance form to Briscoe... Is that mean Duke have bought the shares from those sellers? Thanks.

I could be wrong but I think the offer is contingent on a successful bid. He could lower the bid to a minimum 50% but he cant go for a % between 20% and 50%. Happy to be corrected. I am sure it would be set out in the offer doc somewhere.

Insto's normally leave it to the last minute but quite a few (ozzie ones) have come out and rejected it so it might be a mathematical impossibility.

Edit: Roger - is my statement correct. I also dont think he is allow to creep up above 20%. The creep provisions (5% per year) only apply above 50%??? So he would be required to do another full blown takeover.