Share Name Share Symbol Market Type Share ISIN Share Description
Home Retail LSE:HOME London Ordinary Share GB00B19NKB76 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 159.70p 0.00p 0.00p - - - 0 06:30:08
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Retailers 4,234.7 -840.3 -104.2 - 1,299.07

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Date Time Title Posts
02/9/201612:32Home Retail Group3,809
12/6/201613:25The new UK Housing and politics thread (moderated and idiot-free)103
23/11/201516:10Run shorters run15
04/11/201511:53home-- bottomed9

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tradesmarter: The offer has not changed, the rise in the sbry share price has improved our offer...breakdown as follows 55p cash x 0.321 sbry share (our share price will mirror sbry movements to an extent now)...the special divi and final divi worth approx 28p.……so at current sbry price offer stands 90p (2.80x 0.321)per share plus 55p cash =145p offer add on special divi and final at 28p…... price around 172{ to market due to no 100% guarantee....we need sbry to get over sticky resistance area 282-285 soon or price will fall back. For now still risk of sbry dilution to fund the buy and dividend payments not 100% guarantee....hence discount to market price, I'm thinking we will be in the 161-175 range for the dip applies And profit taking likely over 170 my best guess...good luck
imperial3: In the final analysis,I must admit cash is far better,than shares.If the offer is more shares,then you have to consider the outlook for the Sainsbury share price.If you believe they will reach 300p,then yes,the share price option is favourable.If you think that the share price will fall back below 250p to say 200p,then it is an open and shut case for cash.In this environment,I prefer the cash element.Just my view.
jonny33: I want to speculate about the future and especially the 24p per share return to shareholders. 1. Lets assume the Sainsbury's bid does not go ahead - Then I believe the share price will drop back to around £1.20, it'll hold this price until the Homebase sale is ratified by shareholders and the special div (24.6p) is paid. At which point the share price should drop by c24p to just under a pound. 2. Lets assume Sainsbury's successfully strike a deal, the share price will move to the agreed price....but now it gets complex, what happens to the share price once the special dividend is paid? I'm really looking for some guidance here as either way there is a big movement in the share price about to take place, which to a certain degree is predictable and has the potential to allow some money making opportunity if it's worked out. I'm interested to hear peoples views, especially if you have come across this type of scenario before.
jonny33: This looks like the cause of the wobble just now FT Alphaville today BE Anyway, HOME a bit weak this morning. PM hxxp://www.theguar...eam-football-story BE Some talk around among the short sellers this morning, which as absolutely not been backtested, to be clear. BE The idea being that Sainsbury will bid again, but it's likely to be an incremental bump rather than a knockout. BE And HOME would struggle to accept an incremental bump. PM hmm Real time stream connected. New messages will appear here the moment they are published. BE Note the HOME short interest, though. BE PM 8% or so BE Yup, still nearly 9% of free float. There's a plenty to be made from spreading bear stories. BE Anyway, let me get Haitong BE Tony Shiret, who absolutely hates Argosbury. PM does he now BE Or Argbury. Perhaps that's better. BE Clearly the only things that can save Home Retail (HOME) as an independent company now would be pressure on Sainsbury (JS) (SBRY LN, 236p, Neutral, FV 235p) management not to proceed to make an offer, or a derisory low-field price. For Sainsbury CEO Mike Coupe either would represent a significant personal blow and we would expect management to be even more determined to continue despite the almost universally negative response to his proposed strategy. The HOME team’s surprise move to sell Homebase to Wesfarmers of Australia does raise the question of whether the subsequently de-levered Argos rump could be taken private, which we examine in this note. However, our main finding having done this work is that divisional profits as shown by HOME may have been boosted for Argos by re-allocation of Financial Services EBIT and that this undermines the overall valuation. Our FV rises to 135p from 95p. BE We have tested the various elements of Buy-Out arithmetic here. Private Equity could generate significant returns if the Argos Transformation Plan is successfully delivered in private ownership. But this is based in part at least on the starting point of very low profitability, which both highlights the risks involved for PE and limits the leverage a private vehicle could support initially and hence the exit price for HOME shareholders. Any consideration of the exit value of Argos must also be based on assuming that the Argos business model – which we believe has become more dependent on the contribution of consumer finance – is sustainable in private ownership (see below). As part of this exercise we have also had a much closer look at the composition of profits as stated by HOME. We believe that the Financial Services (HFS) business achieves far greater profits than stated and that these are re-allocated to Argos (mainly) and Homebase. We have estimated that over half of current year Argos EBIT is in fact re-allocated HFS profits, suggesting that the erosion of product based profitability has been greater than investors would generally believe. (We have received no co-operation from HOME in our analysis which incorporates a number of assumptions which may limit the accuracy of our conclusions.) The implication here is that Argos needs the support of a consumer finance structure to sustain its operations. BE Having performed the analysis we feel that there is a bit less to HOME than meets the eye. While HOME management may be motivated to offer for Argos, we believe that the valuations of Argos and HFS have to be considered together by investors rather than assuming a separate valuation for HFS based on its debtor book, because the returns implicit in a separate valuation of HFS would effectively be double-counted as its profits are mainly shown currently within the Argos EBIT. We assume that Sainsbury has probably done the same work we have managed in a couple of days over the last six months. So we would expect that it does not want to double-count assets either. This said the logic of its approach eludes us so its valuation is likely to as well. BE Canaccord also advising caution into the deadline. PM Hang on PM We assume that Sainsbury has probably done the same work we have managed in a couple of days over the last six months. PM That's a bit cheeky no? PM But go on PM Canaccord BE Similar conclusion, slightly more tame argument. BE With the clock ticking down to the 5pm deadline on 2 February (or potentially later if agreed by the Takeover Panel), by when J Sainsbury has to decide whether or not to make an increased bid for Home Retail, the answer should soon become clearer as to whether Argos is to continue with its Digital Transformation plan as an independent operator or (potentially) as a subsidiary of J Sainsbury. Home Retail is currently just over three years through its five-year plan, so it is a case of unfinished business at this stage. This will, of course, be dependent on a number of factors. First and foremost is whether Sainsbury does return with an enhanced bid. Assuming it does, we must see at what level this is pitched and whether shareholders are willing to accept this. In turn, this may depend on the mix of cash and paper offered. Given Sainsbury's own travails and challenges in its core grocery market, we would assume that the higher the mix of cash over paper, the higher the chances of success in securing Home Retail's shareholders' agreement. BE The market is not privy to the level at which Sainsbury's rebuffed offer last November was pitched (although press speculation centres at around 130p). There have been three key events since then - the proposed sale of Homebase to Wesfarmers for £340m (c 42p per share); a further profit warning from Home Retail; and market weakness and volatility. These will all play a part in Sainsbury's thinking for what it views as both a "strategically compelling transaction" but also "not a must do deal". As the potential bidder, it is only Sainsbury's (and its shareholders') view on the strategic compulsion of the transaction that matters. We do not have adequate insight into Sainsbury's strategy to comment in an informed manner, but it is clear from some of its published materials that the company (and its advisors) are serious in their deliberations and justifications on this matter. This has certainly changed our initial scepticism on the probability of a higher, follow-up approach. BE As long-term observers of Home Retail, we remain less convinced of the strategic logic and rationale of such a deal. However, just as beauty is in the eye of the beholder, value is in the eye of the bidder. Our analysis of the value of "rump" Home Retail, excluding Homebase at a £340m value, shows that any bid for the total group above 135p values this rump at a premium to the wider sector, compared with the 13% discount Wesfarmers has proposed to pay for Homebase. Only a "strategically compelling transaction" could justify that in our view. BE In light of our 10% forecast cuts following Home's Q3 IMS and some sector de-rating, in the absence of a bid approach we would have cut our fundamental valuation to 100p (from 115p). Ascribing a two in three chance to a bid at the current share price and a one in three chance of no further - or failed - bids, in which case fundamentals would re-apply, this gives our new target price of 134p. We therefore retain our SELL recommendation. BE All of which plays into the bear stuff above rather neatly. BE There's a quite startling disconnect between what the buyside says HOME is worth -- remember the flush of "we won't sell for less than 200p!" articles a while back -- and the value the sellside sees in the business. BE One can be cynical about both sides, of course. Though only the former is talking its book. 11:38AM
dangersimpson2: 25p is the return to shareholders. Of the proposed payment of £340m for homebase £75m will be eaten by seperation costs and is effectvely lost to the group. The rest adds value to the remaining group by strengthening the balance sheet and reducing the pension deficit. So this should be considered as £265m = 33p value to HOME not just the £200m = 25p proposed return. Homebase sale also reducing the lease liability. When we add in the £550m = 69p net loan book which is essentially just a receivable then you get 102p. The offer then depends on the valuation of the Argos trading business plus cash net of it's pension liabilities. Cash is £193m Pension deficit £100m (will be reduced by £50m but we have already counted that above.) Provisions £191m - being conservative and assume none of these are transferred with Homebase. = -£98m = -12p Overall then 90p + Argos. (Shows what a good but this was sub £1.) HOME trading (in a poor year) at c.£100m PBT. Homebase sale likley to reduce profit by c.£20m giving £80m PBT or £64m PAT = 8p. In a good year I expect them to do at least twice that = 16p. A 170p offer from SBRY would be paying a 10x net bad-year multiple or 5x good-year multiple. A 210p offer would be a 15x net bad-year multiple or 7.5x good-year multiple. So even a 210p offer would not be that crazy given that SBRY trade on a fwd multiple of 11, HOME consistently generates higher OCF than earnings, the deal could be debt funded to reduce tax and the potential synergies that have been detailed. Execution risk has reduced with the sale of homebase. I'm not expecting taht SBRY will go as high as 210p (not without a counterbid anyway) but on balance of probablities it would seem worth them table a higher offer than the current share price.
jonny33: I have a theory and this may come across as the ramblings of a lunatic so bear with me. What do we know as facts We know Argos have piloted some stores in Sainsbury's We know some members of Home retail and Sainsbury's boards have worked for each other companies. We know Home retail share price is too low and in danger of a take over We know there are take over rumours about Home and Homebase. Here is a theory Suppose the pilot stores have proven to be successful for both sainsbury's and Argos. Suppose Sainsbury's has seen a small % increase in spends due to the increase footfall from new Argos customers, Suppose you multiplied this growth across to lots of sainsbury's stores. All of a sudden you have a strategic business partner who can bring you growth for little cost. Now if Amazon took over Home and we know Amazon are now playing in the food market would they want Argos stores in Sainsbury's? - I don't think so. So how do you make your strategic growth 'partner' less attractive to take over.....I'll let you join the dots.
market sniper1: Home Retail Group Plc 56% Potential Upside Indicated by Nomura Posted by: Ruth Bannister 7th December 2015 Home Retail Group Plc with EPIC/TICKER LON:HOME has had its stock rating noted as ‘Reiterates217; with the recommendation being set at ‘BUY’ this morning by analysts at Nomura. Home Retail Group Plc are listed in the Consumer Services sector within UK Main Market. Nomura have set a target price of 170 GBX on its stock. This would indicate that the analyst believes there is a potential upside of 56% from the opening price of 109 GBX. Over the last 30 and 90 trading days the company share price has decreased 2.7 points and decreased 52.7 points respectively. Home Retail Group Plc LON:HOME has a 50 day moving average of 121.35 GBX and a 200 day moving average of 154.35 GBX. The 52 week high for the share price is currently at 219.38 GBX while the year low share price is currently 96.7 GBX. There are currently 815,092,075 shares in issue with the average daily volume traded being 3,805,945. Market capitalisation for LON:HOME is £893,340,902 GBP. Home Retail Group Plc is a United Kingdom-based home and general merchandise retailer. The Company’s segments include Argos, Homebase and Financial Services. Argos is a digital retailer, which sells products through its 755 stores, Website and mobile applications.
jonny33: <<> When two businesses work in collaboration eg Argos and eBay or Argos and Sainsbury's it takes time to build the relationship and understand how the benefits can be maximised and risks overcome, there is a lot more to come for next year. ;) The problem with Homebase has been no investment, this is still a challenge when they are only making £20m profit a year, something simple like new functionality in IT can costs millions, and that comes from the profit line. However you have to invest in order to grow so it's a tricky situation, but most important is having a vision, sadly Homebase has not had this, it is unsure of it's place in the market, eg it tries to sell Homeware and compete with John Lewis and Ikea, but also sells DIY and compete with B&Q/Wickes, it sells kitchens and competes against Wren/B&Q/Wickes/John Lewis/Independents. gardening is pitched against independent garden centres and chains like Dobbies....the list goes on. Which begs the question what are Homebase known for? If you can't answer that question eg known for product x or known for price or value or quality then you have just discovered what the problem is with Homebase, it's not known for anything and is jack of all trades and master of none. If you look at AO (Appliances on line) they are known for price and speedy delivery. John Lewis for quality of service, Ikea for simple design at great prices. Homebase has lost it's way and unless they can come up with a plan will continues to be lost. Lets hope the new CEO has what it takes. As for Argos it know's what it want to be and has a plan which it is executing, there are speed bumps along the way but assuming it does not get derailed in two years time we'll look at today's share price as a great buying opportunity.
masurenguy: Predators plot £1bn takeover bids for troubled Argos owner PRIVATE EQUITY firms are considering £1bn takeover bids for the owner of Argos and Homebase. Several retail industry figures have been asked to advise on approaches for Home Retail Group (HRG). Buyout houses are understood to be circling following a slump in the company’s share price and an unusual pre-Christmas profit warning, which it blamed on uncertainty surrounding Black Friday promotions. HRG’s share price has halved since the start of the year and closed at 103.4p last week, valuing the business at £849m. It has £193m of cash on its balance sheet and a customer loan book of £550m, according to interim results released last month. Investment banking sources suggested this buffer would make the company appealing to bidders. However, they cautioned that buying HRG could still be akin to “catching a falling knife”. Argos and Homebase are saddled with big property estates and have been hit hard by the shift to online shopping. Complete article here:
discodave4: Thanks again Danger.Pension still about 18% of pbt so fairly significant!.As you say, shorting at its lowest Nov 2014 at about 2% when the share price was about 180 and on an uptrend, so some may have closed their positions a bit late. At around the peak in the share price (220 Jan 2015) shorts were still low, however shorts have increased since as the share price has reduced - so would say they haven't got it too far out this year at least! (Just my take on things - so probably wrong!).Will sit on the sidelines for a while and see what happens.ThanksDD
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