HGH - Heartland Group Holdings

[winner69]

flag and pennant? looks pretty good chartwise

Top of the flag pole is about 160 ..... raise that flag

[winner69]

It seems Quadrant did ok out of HNZ share deal.


http://www.stuff.co.nz/business/6834...ussie-investor

One of the pitfalls of issuing undervalued/cheap shares to the vendor to buy things.

Quadrants 'bonus' really our money. But Quadrant won't be complaining
R
But then there was 'urgency' around the deal and this was the 'most efficient' way of doing it. That's Heartlands story.

[Harvey Specter]

One of the pitfalls of issuing undervalued/cheap shares to the vendor to buy things.

If they had raised equity from existing shareholders it would have been at the same price (or a discount) so I dont see any issue. The alternative is to have a huge cash pool available for acquisitions which just isn't efficient.

[percy]

One of the pitfalls of issuing undervalued/cheap shares to the vendor to buy things.

Quadrants 'bonus' really our money. But Quadrant won't be complaining
R
But then there was 'urgency' around the deal and this was the 'most efficient' way of doing it. That's Heartlands story.

Your hindsight remains excellent.
Heartland's foresight meant they added another established business [diversified !] without having to spend 5 years developing a greenfield REL business.Clever,and issued shares as part payment,at NTA.

[winner69]

.........Heartland's foresight meant they added another established business [diversified !] without having to spend 5 years developing a greenfield REL business.Clever,and issued shares as part payment,at NTA.

Agree Percy, completely correct, a great acquisition

But that was not the point I was making

Top of the flag pole is 160

[Beagle]

They always seem to do well,they made a 100% plus gain on their Sum investment in 2 years and since then the share price has done stuff all, let's hope HNZ moves along a bit better in comparison after their sell down.

I agree that it seems Quadrant appear to be very astute investors and I think they did very well to get such a large stake offloaded at ostensibly no discount to the market price. I think upon refection they had a much larger stake in Sum as well as board representation and pushed management hard to execute growth. Management in that company appear to have now hit cruise control to some extent, and / or with the huge previous run-up in price maybe SUM was overpriced when they sold. On the other hand I think they would have had minimal if any input surrounding HNZ's business plan and few would try and make the case HNZ is overpriced at $1.30, some would perhaps suggest fairly priced for now, pending further earnings visibility.

I am sure there's one thing we all agree on. Its good to see the overhang gone and it will be interesting to see where the market prices HNZ how this "monkey" is off their back.

[ziggy415]

I agree that it seems Quadrant appear to be very astute investors and I think they did very well to get such a large stake offloaded at ostensibly no discount to the market price. I think upon refection they had a much larger stake in Sum as well as board representation and pushed management hard to execute growth. Management in that company appear to have now hit cruise control to some extent, and / or with the huge previous run-up in price SUM was overpriced when they sold. On the other hand I think they would have had minimal if any input surrounding HNZ's business plan.

Its good to see the overhang finally gone and I look forward to seeing where the market prices HNZ how this "monkey" is off their back.

does this mean the next heartland aquisition will have another monkey on our backs or will they tap shareholders for funds...

[Beagle]

does this mean the next heartland aquisition will have another monkey on our backs or will they tap shareholders for funds...

Good question and something that was raised at the last ASM. One shareholder strongly suggested that next time HNZ involve shareholders in any capital raising required for any planned acquisition.
The directors appeared to take him seriously so hopefully they will give shareholders the opportunity next time. They did explain that the shares issued to Quadrant, in their opinion was the most efficient and effective means to expedite that particular deal at the time. I think they got the message that shareholders want to be involved. I think they need to prove that deal is EPS accretive before going off on another hunting expedition.

[percy]

Good question and something that was raised at the last ASM. One shareholder strongly suggested that next time HNZ involve shareholders in any capital raising required for any planned acquisition.
The directors appeared to take him seriously so hopefully they will give shareholders the opportunity next time. They did explain that the shares issued to Quadrant, in their opinion was the most efficient and effective means to expedite that particular deal at the time. I think they got the message that shareholders want to be involved. I think they need to prove that deal is EPS accretive before going off on another hunting expedition.

We seem to forget Heartland have a history of successful mergers and acquisitions.
Heartland was in fact the result of merging three businesses.They then went onto acquiring PGW Finance.
I do agree most shareholders were very disappointed in the SPP, and directors, as you noted are well aware of this.
The only real way for a bank or finance company to grow is via acquisitions, as there appears to be little organic growth available in the sector.
Heartland are in an strong position,having companies accept Heartland's shares in part payment, and a very supportive shareholder base,ready to support any further capital raising.

[stoploss]

From Macq this morning "Interestingly we hear that there was limited local institutional participation in the deal suggesting the company may have attracted either offshore interest or a new cornerstone shareholder."