|Arla Foods Uk
||EPS - Basic
||Market Cap (m)
|Household Goods & Home Construction
Real-Time news about Arla Foods (London Stock Exchange): 0 recent articles
|damofarl: 71 p it is and no dividend!
The boards of Arla Holding and Arla Foods UK announce the terms of the
recommended acquisition by Arla Holding of the 49 per cent. of Arla Foods UK it
does not currently own at a price of 71 pence per share in cash (the
The Acquisition price values the entire existing issued share capital
of Arla Foods UK at £434.5 million and the shares not owned by Arla Holding at
The Acquisition price represents a premium of 22.4 per cent. to the
Arla Foods UK share price before discussions were announced on 20 October 2006
and a premium of 43.5 per cent. to the average share price over the 3 months
prior to the announcement concerning discussions.
Under the terms of the Acquisition, Arla Foods UK Shareholders will not be
entitled to Arla Foods UK's proposed final dividend of 0.8 pence per Arla Foods
UK Share in respect of the financial year ended 30 September 2006. The Board of
Arla Foods UK has undertaken to seek the approval of the Arla Foods UK
Shareholders at the Arla Foods UK Annual General Meeting to be held on 27
February 2007 to adjourn the resolution to approve the payment of such proposed
final dividend. No further dividend will be paid or declared and the Board of
Arla Foods UK will not reconvene a meeting to consider the adjourned dividend
resolution unless the Scheme does not become effective in accordance with its
The Loan Notes, which will be governed by English law, will bear interest (from
and including the date of issue of the Loan Notes), payable every six months in
arrears on 31 March and 30 September in each year at a rate of 0.75 per cent.
below LIBOR, such rate to be determined on the first business day of each
interest period. The first interest payment date will be 30 September 2007 in
respect of the period from the date of issue of the Loan Notes up to and
excluding that date.
The Loan Notes will be redeemable at par (together with accrued interest) for
cash at the option of the holders, in whole or in part, on each interest payment
date from (and including) 31 March 2008. Arla Holding will redeem all
outstanding Loan Notes at par (together with accrued interest) on 30 September
2012. Arla Holding may redeem outstanding Loan Notes at par (together with
accrued interest) earlier if, at any time after the first interest payment date
following the first anniversary of the date on which they were issued, 25 per
cent. or less of the aggregate nominal amount of all Loan Notes issued in
connection with the Scheme remains outstanding.
2. The Scheme will be conditional upon:
(a) approval of the Scheme by a majority in number of Arla Foods
UK Shareholders present and voting (and entitled to vote), either in person or
by proxy, at the Court Meeting representing 75 per cent. or more in value of the
Arla Foods UK Shares voted;
Votes attaching to Arla Foods UK Shares controlled by Arla Holding or persons
acting in concert with Arla Holding will not be exercised at the Court Meeting
or at the EGM.
Expected timetable of principal events:
Posting of Scheme Document 15 February
Court Meeting/EGM 12 March
Scheme Hearing 2 April
Capital Reduction Hearing 4 April
Effective date of Scheme/Capital Reduction 5 April
Latest date consideration posted to shareholders 19 April
I think I'll pass on the loan note option! D.|
|tiredoldbroker: QuePassa, you say that Dairy Crest are on a p/e of 24 but the fact is that for the year to March 2007 they are forecast to have eps of 45.1p per share, rising in the year to March 2008 to 52.3p, so the prospective 2008 p/e at Dairy Crest's current 651p share price is around 12.4.
For ARU, with a September year end, the forecast for 2008 (six months further away than for DCG) is 5.39p so the p/e at a 71p exit price would be 13.2. So ARU is going out on a premium to DCG, even though ARU already has a controlling shareholder, which effectively excludes any third party offers.
ARu has a record over the last few years of really quite patchy earnings, even when "normalised" to reverse the exceptional items (which come up every year so are hardly exceptional any more !). An exit p/e of more than 14 times this year's forecast earnings seems like quite a full price, the rate of growth forecast is hardly stratospheric and frankly the exit p/e is higher than for many stocks showing real growth and a decent record. By all means refuse to accept the offer, you'll just become a dissenting shareholder with the offer proceeds held in an account until you do accept, with you unable to access the cash for reinvestment. So I don't see how you'll benefit or what the financial justification is.|
|quepassa: Exactly. This is what I was banging on about a couple of weeks ago. This is a very hybrid situation.
Ex-divi date is 6th.December. Record Date 8th December. -Payment date is normally Record Date + 20 days. Although it appears that Arla will use its discretion this time about the payment date.
The divi must be approved at the AGM. There is not yet any set date for the AGM - which is very curious indeed. Arla amba have additionally notified The Board that if a recommended offer is not forthcoming by the date of the AGM, then Arla amba reserve their right about which way they will vote on actual payment of the divi. - So theoretically and potentially, the announced dividend could be withdrawn. What this would do to a share price which had already gone ex-divi, one can only guess.
A real curate's egg, where the share could have gone ex-divi and then Arla amba veto the payment of it. - I have never seen anything like before.
Actually, it is so hybrid and so unusual in my experience that it leads me to conclude that a recommended offer was - and still is- expected by all parties in which case a normal AGM would not be necessary according to a senior representative of Arla Uk whom I contacted twice on the telephone specifically about this latter point.
This is one of the many reasons why I personally feel that the deal is in the bag and we are just finalising price.
|tiredoldbroker: You know, I quite like ARU as a trading stock and have done some nice trades over the years, but I have to tell you that I'm not convinced it is a real growth story - I can see that Arla in Scandinavia likes to have a major market for Lurpak safely in their control, and will happily marry the distribution of other products to that. But institutions won't consider what they've paid for ARU shares in the past, or Express Dairies shares in the distant past, and expect that price back with interest.
If that was their policy, they'd just put money on deposit. Shares don't work like a savings account, so I don't go along with Gerry321's idea that "Surely the take out share price must reflect what the major funds paid for their holding and the profit + interest they believe they are due". They'll look at the share price over the last year or two at most, and the profit record (which is patchy), and the forecasts of future profits from brokers and their in-house analysts. Then they'll decide what sort of exit p/e on coming earnings makes sense to them, and I reckon they'll feel that a prospective p/e of 14 is pretty much top whack for a company with a record like ARU's. You can buy a stock will genuine growth prospects cheaper than that.
Another £30m on the exit price is equivalent to them giving away another full year's profits after tax, and I think they'll feel that is too much cream on top of a pint of at best semi-skimmed.|
|topsy turvy: I suspect we won't see fuel prices fall any further. Quite apart from seasonal factors and the political situation, I can't see OPEC wanting them to drop below current levels. We need something more substantial to drive the share price of ARU much further upwards from here, such as an Arla Amba bid.|
The branded butter,cheese and other value added products are manufactured and marketed outside the u.k. by Arla Amba and are ONLY distributed in the U.K. by Arla Foods U.K., I presume the margin made by Arla Foods U.K will be determinded by the transfer price set by Arla Amba which of course can be manipulated to suit, ie Low transfer price = proft for the u.k plc and higher share price , High transfer price = more profit for the european co-op which is Arla Amba and less profit for the u.k plc and a lower share price, ask yourself what suits Arla Amba at the present time High share price or
Low share price !!
Most of the milk that goes into processing is worth less than the milk that finishes on the shelf as fresh liquid milk as it goes into world wide commodities such as milk powder,chocholate crumb, unbranded bulk cheese and bulk butter and into food manufacturers who buy high volumes at low prices and use it as ingredients to make desserts,soups,and confectionery ect.
It is only worth more when it is used in the dairy companies own added value products such as branded cheese,butter,yogurts,cottage cheese,flavoured milks ect ect.
None of the milk bought by Arla Foods u.k. goes into manufacture it is 100% for liquid milk.
|ptgint: deniscaff - its' by association AND by name that I think there will be an effect on ARU share price, particularly short term. Its' a shame as I've only bought in quite recently and had high hopes for this compamy.|
I don't think the situation in the middle east is good news for any of parties involved, I was pointing out that ARLA AMBA which is a Danish farmers co-op is a different company to Arla foods uk Plc, ARLA AMBA export added value branded dairy products world wide and are share holders in ARU , while ARU operate in the uk and depend on processing and suppling liquid milk to the major uk supermarket's, IF The ARU share price is affected it will be by association not a loss of profit to the plc|
|deniscaff: That would be Arla Amba and not Arla foods u.k and should not impact on Aru share price.
Where did the info come from ? and surely they mean a million in sales revenue and not a full cost !!|
|quepassa: I have been following Arla Foods for 4 year since it's earlier days as Express Dairies when the share price was 20p. I continue to believe that Arla amba will want and need to take over Arla Foods UK. The UK market is an integral part of their stated strategy.
Go to www.arlafoods.com and read their corporate strategy and mission statement which are spelt out clearly and make fascinating reading.
They missed the tie-up with Campina last year.
A highly important AFX was released yesterday 18/1/06 by Andreas Lundby their MD about competitor Groupe Lactalis of France buying Galbani and ousting Arla amba from their top slot in Europe in terms of sales.
This will undoubtedly put further pressure on Arla amba to speed up their corporate strategy and maintain / regain their position in the market. An obvious step is to increase its stake in its 51% subsidiary, Arla Foods UK.
This share price has moved from 55p to 70p in two months and has recently retrenched to 66p. I believe this retrenchment has more to do with market softness in the last few days, lots of small-ticket retail sales ( stop-losses being triggered at 65p? ) and some profit-taking after a rapid 30% rise in share price
I personally doubt that the share price will fall to or below 60p but rather believe that once the news about Lactalis and Galbini has filtered through and been thought about, investors and the market will realise that this will further make/ compel Arla amba increase its stake of 51% in Arla Foods UK.
These are personal views only. DYOR|
Arla Foods Uk share price data is direct from the London Stock Exchange