Flowtech Fluidpower Share Discussion Threads

[mudbath] 30/5/2008 22:03

Thanks Engineer66-Terminal dissenting does not seem an attractive option.My suggestion for a "white night" has to be Ansys.We should know soon enough.

[engineer66] 30/5/2008 21:56

Management buyout doesnt seem too attractive. Better if a smart company like Aveva (AVV) came in with a sensible offer, it would make good sense for all parties.

Mudbath - if you don't accept and the bid goes unconditional you go on a dissenting shareholders register. There is no point in staying on that register as you don't get dividends. So you basically have to accept the offer price that was given to the other shareholders. At least that was my experience in another case.

[littlemadam] 30/5/2008 21:02

yes, let's not forget about the 'other parties' FLO board are considering. I think one could be a management buy-out.

[eagle eye] 30/5/2008 20:22

Hey guys, I'm sure you have all read this...

Mentor Graphics Corp. said it has posted a letter to Flomerics Group Plc. shareholders, reiterating its belief that its cash offer of 104 pence per share for the group represents a "highly attractive proposal".

But they omit to say... ' FOR MENTOR SHAREHOLDERS'

Best wishes to all Flomerics shareholders!
Eagle Eye

[battlebus] 30/5/2008 18:59

What if all the small shareholders and Mudbath got together and bought the company ourselves.Mudbath as C.E.O. Then we would see a better shareholder return. 25 million between the dozen or so posters is only 2 million each. Speak to your bank managers on Monday.

[psolomons] 30/5/2008 17:59

Time for the white knight to charge into the frame. That would really get things moving. Frankly if borrowing was easier in the current climate the management would be mad not to try and get a buyout themselves. I think we all know FLo is a little gem. The interest on all the cash is becoming significant too.

[battlebus] 30/5/2008 17:41

Yeh it looks a bit like a panic statement. Both me and Mrs Battle will not be selling our shares to Mentor at 1.04. If everyone holds tight a new offer will definitly be made.

[techmark] 30/5/2008 17:26

Looks to me like Mentor are struggling to get the acceptances.

LONDON (Thomson Financial) - Mentor Graphics Corp. said it has posted a
letter to Flomerics Group Plc. shareholders, reiterating its belief that its
cash offer of 104 pence per share for the group represents a "highly attractive
proposal".
Simulation software company Flomerics has repeatedly rejected the Mentor
offer as it believes it materially undervalues the company.

[mudbath] 30/5/2008 10:16

Thanks for the Idiots Guide bungler.Don't like to say it,but there are still parts of the process that I am not sure of.For example; if a FLO shareholder accepts the 104p current bid,then Mentor up the ante to(my peferred figure of)£1.45;does that shareholder benefit from the higher offer?If one does not accept any ofer and the bid goes unconditional,how does the dissenting shareholder stand?There seems to be a school of thought that, should FLO remain independent, then the share price would return to lower levels.With our company seeing T/O jumping by 42%(the holy grail for a software house)and generating what will soon build towards £10++million in CASH,it seems to me that the current bid is more anchoring the price at £1.04.Thwart the current offer and watch shareholder value inrease.(imo)

[engineer66] 30/5/2008 09:43

I've been away and it been good to catch up with some excellent posts on this tread. It is surprising there is a frosty relation between FLO and Mentor board, since quite much of the value is having the staff of FLO on board. My guess is that Mentor will just fall short. So its back to the FLO board running the show. At least the bid will have focussed their minds on creating better added value on their past investments! share price would be weak if Mentor sell their holdings but then there are the fundamentals and another bidder might come in. FLO imho do need to find a strategic partner. Any other views on the outlook?

[techmark] 30/5/2008 09:20

I think the chances of them walking away at this stage are pretty low as well. They already have 30% at 104p, so if they raised their bid, it will only be for the remaining 70%.

For example an improved offer of 120p, would mean that Mentor are effectively purchasing the company for 115p, which I'm sure they would be delighted with. So I can't see them walking away without making an improved offer.

Regards

[eagle eye] 29/5/2008 22:30

Hi varies,
Sorry I missed you at the AGM. If you do get a copy of the shareholder register, I would be pleased to make contact with you. As you say, its those nominee holdings that can be misleading. I understand that private shareholders can make a major impact to the current situation. I don't think Flomerics would have gone to the considerable expense of producing such a detailed defence document if they did not think they had a chance of survival.
Cheers
Eagle Eye

[welsheagle] 29/5/2008 20:43

Useful post, Bungler.

[psolomons] 29/5/2008 18:20

Good post bungler, v useful. Not long til the next episode then !

[firth] 29/5/2008 17:51

Hi Mudbath,I think the chance of Mentor getting hold of 11.5 million shares if you are not selling is 'nil' You hold the balance of power with me and the rest of the fan club!!!!

[bungler] 29/5/2008 17:50

Here's an idiot's guide to the take-over process. I, of course, found it very helpful. It comes from something called Penny Sleuth.



Small-Cap Takeovers Return

By Tom Bulford,
First published on Thursday, May 29, 2008
Hooray! A take-over bid for a small company.

While the City in its state of bearish paralysis might not be able to recognize the undervaluation of small companies those in the trade certainly can. Bids from incumbent management or from rivals are starting to appear and one AIM-listed company that finds itself on the receiving end is Flomerics.


Using computer simulation Flomerics can model the likely flow of fluids and heat within engineering processes, thus making an invaluable contribution to their design. It is a world leader, and has attracted the attention of the US company Mentor, which is something like thirty times Flomerics's size.

Mentor has bid 104p per share in cash but Flomerics' board has rejected this offer, announced good recent trading and hinted that there may be other interested parties. We shall see, but whatever happens this is unlikely to be the last takeover bid for an undervalued small company, so for the benefit of Flomerics' shareholders or any others that find themselves in the same position, it is time to reprise the bidding timetable.

All bids are governed by a timetable set out in the City Code on Takeovers and Mergers, and presided over by the Takeover Panel. This timetable ensures the fair and equal treatment of all shareholders and gives them sufficient time to make decisions without allowing the process to drag on infinitum, with the expectation that the offer should have lapsed or been declared unconditional within 60 days.

Here's stage one...

Stage one is that the bidder states its firm intention to make an offer. This should not be confused with such vaguer revelations that companies are 'in talks that may lead to an offer'. A formal statement of intent starts the clock running and from that day the bidder has a maximum of 28 days in which to post its offer document to the target's shareholders.

Once the offer document has been sent out, shareholders in the target company have a further 21 days in which to decide whether or not to accept the offer. In the event that the target company chooses to contest the bid it has 14 days from receipt of the offer document to issue its own defence document. That leaves shareholders with a minimum of 7 days to choose between the arguments of the bidder and the target company.

Then, 21 days after the posting of the offer document we arrive at the 'First Closing Date', when shareholders in the target company must either accept or reject the offer (doing nothing counts as the latter).

The bidder will see how many acceptances it receives before deciding upon its next move. Essentially it has three options: to withdraw its offer and walk away; to extend its offer or to improve its terms; or to declare the offer 'unconditional'.

In the event that it chooses the second of these options, namely to extend its offer, it can do so for a further period or periods of 14 days, and try to win the argument within that time.

If the bidder declares its offer 'unconditional' then it is effectively declaring victory and will be able to acquire all shares for which acceptances have been received. However there will be some shares for which it has not received acceptances.

[mudbath] 29/5/2008 15:43

Well done the buyer(s)who bought 30,000 shares today at a price in excess of Mentor's bid.

[mudbath] 29/5/2008 12:17

It was STL lm.Could not say "buy" when it has doubled in a few weeks although I would love to get hold of a lot around 1.4pence.Markets are funny things,so it is a possibility.Anyway,you are on a winner with FLO.

[mudbath] 29/5/2008 10:45

Thanks for that varies.Interesting that KKE were represented.Any news from Asia?It worries me that the MM's will take the stock at 103pence.Hope T/O remains low!!The share that we discussed.I have tried to highlight all the negatives;despite this there was a small buy at 2.1 this morning.Will concentrate on the bullish elements if we can manage the stock down 33%.Mud.
Re FLO:-I remain most positive that the price will move to a higher level-soon preferably.

[bungler] 29/5/2008 09:45

Just to add my thanks Eagle Eye - much appreciated.

[varies] 28/5/2008 23:24

eagle eye
Congratulations on and many thanks for your excellent report of the AGM.
I was there too but picked up much less info than you did. Perhaps I should have stayed on for coffee but I needed to return to Central London. Hampton Court is not a convenient place for most of us.
It will be very interesting to see the rate of acceptances at the first closing date but I like to hope that it will be far short of 50%.
One can. of course, obtain a list of shareholders from Companies House for a modest fee and I plan to do so next week. These lists are hard to interpret as so many of us hold through nominees but one might learn something.

mudbath
I don't think I can add anything useful to what eagle eye has told us about the AGM. I am inclined to agree with you that, barring a much more generous offer, FLO would do us better on its own.

[cockneyrebel] 28/5/2008 19:36

Not much to say is there, but wait. It's a bidding war or 104p underpin as I see it.

CR