HGH - Heartland Group Holdings

[mouse]

Assuming Heartland wins the bidding war for UDC. How will they pay? More importantly, how much will I pay? Again, assume Heart borrows 40% of the cost, that means a 'rights' issue of 60% of cost. It looks as if real CASH is needed for this one. Hmmmmmmm? Do I want to double my shares in Heart?
Advice please. Your thoughts please?
And where did our 'cash back' offer vanish to?

[macduffy]

There is no specific guarantee for UDC from its parent ANZ but in practical terms it would have to support UDC if that company got into difficulties. To do otherwise would be tantamount to ceasing business, at least in NZ.

As a longterm investor in UDC debentures and call deposit facilities I wouldn't have the same level of confidence in HBL - residual MARAC memories there! - and would scale back exposures if HBL becomes the owner.

[Bjauck]

Assuming Heartland wins the bidding war for UDC. How will they pay? More importantly, how much will I pay? Again, assume Heart borrows 40% of the cost, that means a 'rights' issue of 60% of cost. It looks as if real CASH is needed for this one. Hmmmmmmm? Do I want to double my shares in Heart?
Advice please. Your thoughts please?
And where did our 'cash back' offer vanish to?

I would take up an HBL rights issue if it were used to buy into UDC (at a good price). I think it would give a welcome boost to the size of Heartland and thereby raise its profile, hopefully for the better.

[kizame]

I would have to say I think UDC is too big for HBL to swallow,who else out there would be interested?
I would think there would be competition for this one,and with HBL not paying more than they need to...

Unless they could leave it as a stand alone entity (listed) with a majority share holding.

[King1212]

http://www.nbr.co.nz/article/potenti...iness-b-187802

[mouse]

I would take up an HBL rights issue if it were used to buy into UDC (at a good price). I think it would give a welcome boost to the size of Heartland and thereby raise its profile, hopefully for the better.

But, you may have to double the size of your investment in HBL. It might eventually be a case of having ACC or similar taking half with HBL the other half.

[macduffy]

I would have to say I think UDC is too big for HBL to swallow,who else out there would be interested?
I would think there would be competition for this one,and with HBL not paying more than they need to...

Unless they could leave it as a stand alone entity (listed) with a majority share holding.

Macquarie Bank, having bought UDC's big brother Esanda last year is the obvious front-runner for me. The private equity/Deutsche Bank consortium that bought GE Finance's Aust and NZ operations recently would likely be interested also. I would expect strong competition with no-one getting a cheap buy!

[Baa_Baa]

Macquarie Bank, having bought UDC's big brother Esanda last year is the obvious front-runner for me. The private equity/Deutsche Bank consortium that bought GE Finance's Aust and NZ operations recently would likely be interested also. I would expect strong competition with no-one getting a cheap buy!

ANZ must be licking their chops with all the publicly disclosed interest in buying UDC. Sure to sell at a tidy premium, if it does = if listed company buys, longer wait for ROI.

[percy]

Macquarie Bank, having bought UDC's big brother Esanda last year is the obvious front-runner for me. The private equity/Deutsche Bank consortium that bought GE Finance's Aust and NZ operations recently would likely be interested also. I would expect strong competition with no-one getting a cheap buy!

If HBL don't buy UDC cheaply, I too hope it will go for huge multiples.
PE of 12.3 would be $700mil.
PE of 15 would take it up to about $855mil.

Then I would expect HBL would be rerated upwards.
I seem to be "well positioned" either way.

We certainly have some interesting times ahead.
And the MTF Sortzone case judgement must be due very shortly.

Opportunities for all.....!!

[Hectorplains]

If HBL don't buy UDC cheaply, I too hope it will go for huge multiples.
PE of 12.3 would be $700mil.
PE of 15 would take it up to about $855mil.

Then I would expect HBL would be rerated upwards.

Yeah, I doubt the correlation coefficient is that strong but hey there's always hope...