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Originally Posted by FarmerHamilton
Bright paid $82m for 51% of the equity of Synlait Milk in 2011 ... have they had a 15% annualized return ? Assume they have that would make there equity now worth $108m , Synlait Ltd's stake would be worth $105m. Assume they raise a fresh say $80m ... the value is approaching $300m ....
Anybody know if $300m would get them straight into the NZX50 ?
Hi FH , Think there is a methodology ike it has to be 10 % larger for 3 months than the smallest company in the index. You will probably be able to find this on the NZX website somewhere.
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Originally Posted by FarmerHamilton
Anybody know if $300m would get them straight into the NZX50 ?
This thread is a B!tch to search for but is worth its weight in gold:
http://www.sharetrader.co.nz/showthr...dex+components
In short, $300m would get it in at about place 40 but remember MRP, Meridian and Z are to be added in the same timeframe. From memory, you have to place 45th or above to get in (to stop constant changing at the bottom ranks).
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Member
Originally Posted by FarmerHamilton
Bright paid $82m for 51% of the equity of Synlait Milk in 2011 ... have they had a 15% annualized return ?
15% annualised return? Bright Dairy would not like be diluted for their share holding if the return is that high. When the controlling shareholder does not want to put more money into Synlait Milk it is a sufficient indication that future is not so bright.
Some expects the same happy story of Fonterra share floating happen to Synlait Milk. But they are different companies, not only in size but also in performance.
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Member
Originally Posted by stoploss
Hi FH , Think there is a methodology ike it has to be 10 % larger for 3 months than the smallest company in the index. You will probably be able to find this on the NZX website somewhere.
Just had a quick look , doesn't jump out at me but did notice that the free float is quite important ...
Bright
Mitsui
Penno
Dingle
MacLean
Those five shareholder will probably hold around 60-65% of the shares so it will be interesting to see if the get in the NZX50. I guess it also depends on how much fresh capital they are after. Still no word on that , which is a little odd. Maybe they need to wait to see how many existing shareholders in Synlait Limited will want to sell into the IPO ?
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Today's payout foercast from Fonterra will be being put into the spreadsheets at Synlait IPO HQ as we speak to give implied returns for next season. This obviously is Synlait Milk's biggest COGS and is crucial for the forcasting of future returns. The falling dollar over the last month is obviously great news but a starting price of $7.00 might be a bit of a surprise. This season ( 2012/13 ) payout staying put will be great news for the current year P&L which may well help the shares to IPO at the upper end of the range when it is set.
Waiting for the IM with baited breath ....
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Originally Posted by FarmerHamilton
Today's payout foercast from Fonterra will be being put into the spreadsheets at Synlait IPO HQ as we speak to give implied returns for next season. This obviously is Synlait Milk's biggest COGS and is crucial for the forcasting of future returns. The falling dollar over the last month is obviously great news but a starting price of $7.00 might be a bit of a surprise. This season ( 2012/13 ) payout staying put will be great news for the current year P&L which may well help the shares to IPO at the upper end of the range when it is set.
Waiting for the IM with baited breath ....
Considering the different ownership structures of synlait vs Fonterra, are should payouts be similar. ie. to what extent does the milk payout price reflect a return for the ownership of fonterra (eg. Milk price = $4, return on milk power processing = $3)
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Originally Posted by FarmerHamilton
I guess it also depends on how much fresh capital they are after. Still no word on that , which is a little odd.
I dont think they are allowed to say until a prospectus is issued.
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Member
The vast majority of Fonterra's profit comes from low value add dairy products , WMP,Skim,Cheese,Butter etc
Synlait's whole point of difference is that they are headed towards high value infant formula and nutritionals making up a big proportion of the revenue. Fonterra might build a couple of infant formula capable driers but really they have set their stall out to control the global commodity market ( to which they do a great job for NZ ). However as the 90% Gorilla in the room they do effectively control all the other independent's cost of the basic raw material ( liquid milk from the farmgate ) and so Synlait will be kind of hostage for the near term at least to the Fonterra payout ...
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Their plan to produce lactoferrin should give profits a boost if they can do it.
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Member
Agreed, moves like this do "move the needle" for Synlait. For Fonterra it is just not worth it, literally a drop in the ocean for them. That is Synlait's key point of difference and should make the float a big success
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