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Real-Time news about Chieftain Grp (London Stock Exchange): 0 recent articles
Current offer price for the shares is 208p. Add another 1.04p for stamp duty and you have to pay 209.04p, leaving a magnificent 0.16p profit to be made per share. That's less than 0.1% - around a week's interest on the money - and you've still got to pay your broker's commission... As the typical payout period from the offer going fully unconditional is about 2 weeks, you'll do better keeping your money in the bank!
And note that even if your broker can get a price decently inside the spread (which I suspect is unlikely at this stage), the offer has not yet gone fully unconditional. That means that there is a risk that it could still come unstuck on one of the other conditions - almost certainly a very small risk, but nevertheless a risk... So even if you can get significantly more than that 0.16p per share by buying at say 205p, be aware that it's not entirely risk-free. You might of course be willing to take that risk, but make certain you're OK with the consequences if something goes wrong and the deal falls through at this late stage.
E.g. I've done some buying myself in the last few weeks back, at prices around 200-207p. Those purchases were going to roughly break even (buying at 207p) to make a small profit (buying at 200p) if the deal went through - but importantly, if something went wrong, I was (and still am) entirely happy to have bought the shares. If that were to happen, the share price would of course fall - I'm quite realistic about that! - but I would be happy to hold the shares. If I didn't feel that way, I would not have done the buying...
|davidosh: featured in the FT yesterday..
Shares in Redhall, the Aim-listed specialist engineer, have held up well this year, enabling the company to continue on the acquisition trail. Last week it announced a recommended bid for Chieftain, a smaller Aim-listed group providing engineering services to the marine, petrochemical and power sectors. It is offering 209.2p a share in cash, a premium of 9.5 per cent to Chieftain's share price on September 18, when news of the approach surfaced. Redhall is also raising £20m through a placing at 245p a share to fund the deal, which values Chieftain at £18.6m. Chieftain is for sale because Bill Taylor and Peter Wardle, who have led the board for 23 years, want to retire and sell their interest in more than 30 per cent of the equity. Redhall believes the acquisitionwill boost its capability as a niche UK engineering services group. The deal will improve its access to the nuclear marine sector and enhance its prospects in the oil and gas industry. It might also point to further consolidation among Aim companies.
I must admit looking at some of my Aim stocks with solid businesses on p/e ratings of around 2 to 6 it is not difficult to expect further consolidation and at this moment in time I am very much thinking that accepting the deal on Thursday if there is no counter bid by then is the way to go and re-invest before the next deal is announced....Save for the fact that I will expect a huge premium on a company trading on a p/e of three. CFT still has huge potential but in these markets the retiring directors probably are taking a safe exit.|
|wilmdav: The circumstances of this offer strike me as similar in some ways to those surrounding Infosys's recent recommended bid for Axon (AXO), which was also deemed too low by ADVFN holders (including me). In that case a scheme of arrangement had been utilised as the mechanism.
Soon after the bid there were press reports that AXO had been putting feelers out for a bid for months, suggesting that 700p might be acceptable. Ultimately the best they could get was 600p from Infosys, which was 'irrevocably' accepted by the directors. It soon became clear that 'irrevocably' did not mean quite what it seemed and that the recommended acceptance was a means of flushing out a competing offer which duly arrived from HCL a few days ago. AXO altered their recommendation to accept the higher offer. The current share price suggests that the market expects Infosys to trump it.
It is hard to imagine that CFT's directors are thrilled by Redhall's offer, but it is conceivable that it was preceded by a similar behind the scenes process as occurred with AXO. However, in this case the market has not even marked the price up to meet the offer, which presumably reflects an expectation that shareholders will reject it - but that no competing offer will be received.
Whether there is any truth in this hypothesis or not, the directors have indicated by their recommendation that they would prefer to sell out, even at the offer price. In these circumstances, if the market fails to signal prospects for a higher bid, I might find acceptance preferable to the thought of a business being run by people who don't actually want to be there.|
|simso: On the one hand, it is a little surprising that anybody can easily raise the finance for a cash bid for any other company. Also interesting to see the share price completely underwhelmed by the news, almost as if it doesnt believe it will happen|
|davidosh: The announcement did not have to be made as there has been NO share price movement on a day when the rest of the market (banks and big caps generally) are up 8%. Begs the question why say anything at all until completely a done deal. Maybe there is a reason for flagging this up now !?
My advice FWIW would be hold on tight until we hear more and hope for a counter bid as there must be a number of larger players that would want the security of the large order book and future potential we all have been patiently waiting for.|
|veryniceperson: Well I have held them now for 7 years. Got 10ks worth and hope to pay a large chunk of my mortgage in 2 or 3 years time. If the country wasn't in the economic woes as it is now David, what do you the share price would be a the present time.|
|davidosh: It also shows what is likely to happen to the share price if the company were ever to have some bad news to tell us....I doubt we would be able to sell many in that case either.
Thankfully the story just builds and builds and the directors have been guiding us carefully with the forecasts and outlook statements. The next big move will most likely happen if they receive firm orders or contracts for the aircraft carrier work ....the sheer size there compared to the market cap will IMO be rather company transformational.|
|glasshalfull: Share price has shown remarkable resilience/strength over the last fortnight and still look extremely good value given the recent trading updates and potential contract news.
It's also demonstrated just how illiquid the stock is when relatively small trades have such an effect on the price.
|davidosh: I have added a few too....there should be lots of newsflow in next three months....contracts hopefully that are awaited, finals which are well ahead as per RNS, updated forecasts and new broker/analyst note and then the AGM.
The share price should not be below £2 still if there is good newsflow like that coming through....the results are scheduled for 18th March so not long to wait now.
Has anyone heard anything locally about how things are going ?
Any news from the shop floor ?|
|gengulphus: The current drop isn't particularly unusual. Reading prices off a chart (so they may not be entirely accurate), it's from about 228p near the start of May to about 168p, a 26% drop.
Last year, it dropped from about 138p in April to about 108p in August, a 22% drop. And in 2005, it dropped from about 78p in March to 60p in June, a 23% drop.
None of this has stopped the share price rising very nicely over the last three years!
By the way, if anyone thinks they can see a "spring/summer fall" pattern in the above: I suppose so, but if you go back to 2004 and 2003, there's no very obvious continuation of the pattern. So I doubt that it's very reliable...
Chieftain share price data is direct from the London Stock Exchange