They own quarter of the company between them, so they no doubt think they are better to double down rather than taking their chances with the board continuing on their current path.
Theirs was a very highly conditional offer, subject to a multitude of conditions - hardly doubling down but more like wanting the company to 'open-kimono' so they get to know what the hell is really going on, especially with the sale of the Oz business.
If they are serious, they just need to talk to the group's bankers - that's how distressed company deals can get done.
Would not be holding one's breath on a good price for the Oz business, if a sale occurred at all. Been 5 moths since they put the business up for sale and if it was going to happen, would have happened by now.
Meanwhile, VSL has come out to state it has no interest, despite rumors, to buy MPG.
Reading between the lines of that NBR piece it seems Wells doesn’t rate current management that highly and adds being listed is a bit of hindrance to Metro in this sector ……seems Wells wants to be become more involved as an owner in running the place. No doubt he would be successful.
Wonder if he’ll show up at the ASM?
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
I would back Wells over the current board who have presided over this apparent slow death. Sure some bad luck with covid and a slowing economy and all, but when a business is forced by banks to sell (large) bits of itself to repay them it is not exactly a vote of confidence in their future. I suppose for the board to support such an offer would be a bitter pill for them to swallow, as it would effectively be an admission of defeat on their part. They may claim that the business is "substantially undervalued", however neither the banks nor investors agree. As commented above, banks are the ones in control, this Wells comment sums it up most succinctly:
“MPG are in a corner over their debt position – the board signalled their lack of confidence in any ability to trade out of the problem, by deciding to sell AGG.”
All in all the Board probably need to just negotiate the best deal for shareholders and get out of the way. They have done enough damage...
Updated chart below of Metro NZ sales v NZ Building Activity ex Stats NZ. Building Activity used a market proxy which Metro often uses in their presos so must mean something
Tells one sad story
Listed in 2014. Share registry included the regular instos - NZ Super, ACC. Jarden, Harbour, Salt, Milford etc
The 'influence' of these instos demanded they grow and then grow more. Put pressure on Board to do things to grow. Thus the Australia acquisition in 2016.
Sales through to FY17 were respectable (see chart). At least sales were keeping up with overall building activity even though margins were coming under pressure
At end of 2017 CEO Nigel Rigby left. He'd been CEO for 5 years (pre IPO) and by looks of chart hadn't done a bad job. Coincidently Rigby left not long after Peter Griffith became Chair. Read into that what you want.
Since then it's been down hill ever since for Metro. Declining NZ sales and profitability and Australia taking a while to sort of come right. Cynically you could say they let a new committed competitor make big inroads into their sales as well.
The instos have one by one deserted the sinking ship ....that alone says something. Now Masfen, Wells and Bain are left holding a sick baby.
Lesson - a successful company like Metro that was under private control for any years is not suited to be owned and unduly 'influenced' by demanding shareholders (read instos). Wells has recognised this and probably one reason why he wants to take control and run it accordingly.
Sad really - one telling fact is NZ sales are about the same level as they were back in 2008. No wonder a business once worth $360m now only worth $30m
I wonder if Griffiths and Mander reflect on that.
Last edited by winner69; 23-07-2023 at 11:06 AM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Originally Posted by Sideshow Bob
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