FKI Plc Share Discussion Threads

[skyship] 11/2/2008 11:23

Ye Gods - I'm really no with it today!! I see that was Wilkie's post.

Whatever - it is certainly a good day for FKI.

[skyship] 11/2/2008 10:37

Badtime - sorry, we posted at the same time!

[badtime] 11/2/2008 10:19

Erm i did mention blackstones possible involvement re the indie article earlier skyshippy

[wilkie_hk] 11/2/2008 10:01

I paid 89p for these about 15 months ago. If the analyst forecast numbers are hit when the finals are announced (I guess this would be around June/July) then the share price would have to recover to these levels. The present foreward PE's are only justified if there is to a warning of a sharp drop in profits.

I don't see 70p per share being accepted and believe that Melrose have got this figure bandied about as an opener to make a more serious bid at around 80p seem generous. What they do have is their favour is that they can refer back to the share price hitting sub 50p. How it reached this low level, I'd leave to someone who understands the impact of loan stock to explain, as this was a nonesense. Personally, I'd favour management rebuffing any offer unless a significant premium to the average of the last 6 months share price is paid ie 80p + 20% premium = 96p.

If Melrose want a bit of FKI, then they can have Hardware and Logistics division at say £200M!

[skyship] 11/2/2008 08:50

68p bid - looks as though something could be brewing - another party soon to enter the "discussions" perhaps - volume rather low though!

[badtime] 09/2/2008 19:55

ickle bit in indie as wel saying thy r talking to Blackstones...all taken with a pinch of salt of course :)

[skyship] 09/2/2008 16:01

pickph - thanks for the FT article.

[melton john] 09/2/2008 14:46

Don't be too hard on Heiden. Enron did the company a lot of damage which they are now getting over with a good order book for the energy side of the business (the only bit of FKI i know as they are local to me). Their sale of Dewind in 2005 also lost money, £M90 if I remember correctly, I suppose that was a sink or swim post Enron/ post 911 survival tactic. I do know that business is certainly very busy at the Brush site. Demand for generators, transformers and rail traction refurbishment is high. The run down buildings are having money spent on new roofs etc and FKI management have recently located there. The management and workforce seem motivated from what I hear. I suspect the sell off is overdone with worries of interest rates, maybe the next results will confirm this.

[pickph] 09/2/2008 05:38

LOMBARD - ANDREW HILL: Melrose versus FKI
By Andrew Hill, Financial Times
Published: Feb 05, 2008


Paul Heiden, chief executive of FKI, must have mixed feelings about attracting the attention of Melrose. One of the industrial investment group's criteria for selecting targets is that they should be "good companies, poorly managed". If FKI wants to guarantee an independent future, Mr Heiden will have to convince shareholders he can do a better job of turning the engineering group round than Melrose can.

That will be a tough case to make. Since Blackstone, the private equity firm, pulled out of talks to acquire the company last August, the engineering company has suspended its plans to sell underperforming units (including one, hardware, that is squarely exposed to the US housing downturn) and issued a profit warning. Its shares have been dragged inexorably down towards the jaws of the waiting Melrose.

FKI might not look like "the big one" that Melrose's followers hoped for, but with an equity value of £400m and debt of about £350m, it is no tiddler. In 2004, when Melrose made its first foray into the public markets to bid for Novar, it managed only to tee the target up for Honeywell of the US. But at the time, the Melrose team was trading on past glories, particularly at Wassall, the mini-conglomerate. Since then, they have proved themselves by more than doubling the value of McKechnie's aerospace businesses, sold last year, and returning £220m to investors. Those same shareholders should be prepared to entrust some of that cash to a Melrose rights issue to finance a formal offer for FKI.

FKI's investors should also study the McKechnie deal. When those businesses were bought from Cinven, the private equity group took a stake in Melrose. Cinven sold within eight months, but if it had stayed put, it would have reaped the benefits of the turnround. A carefully structured cash-and-shares offer for FKI would give the engineer's blue-chip investors a similar opportunity - and a chance to weigh the prospect of Melrose's stewardship of their company's assets against Mr Heiden's.

[pickph] 09/2/2008 05:03

i tend to think that the Fki managemnet are not really that good [they probably think their fantastic] but look at what's happened to the share price and that probabaly tells the story.And that's why they are always under the bid spotlight.Other comapnies boards must think that they can deliver cost savings/growth and make a good profit.............

[melton john] 08/2/2008 09:16

Agreed pickph, the debt scares me off every time i look at it. A bit like buying a car to find that the vendor still owes hire purchase.
Us pi's don't get the luxury of examining the company as part of due diligence that a bidder gets. I reckon if they are thinking of around 70p, they certainly think it is worth more than that, but how much??? Too many unknowns for me.

[pickph] 08/2/2008 07:33

I think this is a v good recovery play if they can sort out the debt. FKI always attract's a bid or two which seems to indicate they have a good business/s
but the management don't always get the best value....not sure why?

[skyship] 07/2/2008 15:25

Taking the average broker forecast which gives a current year EPS of 10p and a divi of 4.5p, FKI is on an historic PER of 6.5, yields 6.9% (net) and is "In Play". Why are we not already at 90p ahead of any prospective bid.

Will be looking into this further over the weekend; and would appreciate others' forecasts on the earnings front, especially in view of this week's trading update.

[scrapman] 06/2/2008 15:38

good report , steady earnings , GE could shell out 450 mil and double their money in a 1 to 3 year time frame , seems like a good hold, but then again I bought in the 120s so not really one to be giving advice

[wyorke] 06/2/2008 15:28

now 64p. buy or sell ? please help...

[skyship] 06/2/2008 07:44

Not a nice day for it, however a pretty darned good Interim Management Statement which should help to squeeze a better price from any prospective bidder.

[scrapman] 05/2/2008 08:27

wonder what potential a counter bid from GE , seems a bit of bargain at 70p

[robo175] 04/2/2008 13:35

Im out,too much downside on this.

[skyship] 04/2/2008 12:57

Looks like a rather cheeky start to negotiations. Made first foray @ 65.998p.

[avh] 04/2/2008 12:42

very very unlikely fki will accept this offer as it declined £1.30 not long ago full order book all this year whats the rush.

[wilkie_hk] 04/2/2008 11:46

Personally, given the information on the company, it's performance and future prospects that exist in the public domain, I would be inclined to issue a polite version of 'swivel on it' to any suitors that think they can pick this up at the bargain price of 70p. This share spiked down to 50p for a very short period, where the indicators were that the penny was dropping that the stock was way undervalued due to overreaction to a mere 13% of the turnover being gained from the US housing market. About 2/3 rds of this company is in fine fettle with ridiculously low forward PEs on solid foreward orders. It's a shame that I was looking to top up this week on my return from a break last week only to be hugely disappointed to find that the price had already recovered.

Notwithstanding the above, you have to be realistic in your expectations. From that albeit very short term low of 50p, I would take 80p now, perhaps from a counterbidder, rather than wait maybe 12 months for the negative sentiment to clear and the price to pass back through this level.

Can anyone cut me in on an MBO at 70p on this as I'd be very interested!

[scrapman] 04/2/2008 11:28

amazing how the market knew about the 70 p limit