Mdm Engin. Share Discussion Threads

[hop53ton] 17/3/2014 08:49

DYOR and all that, but Foster Wheeler IR told me no final div from MDM. Guess we'll see that in black & white in the offer document.

[exbroker] 16/3/2014 22:04

The professional arbs are paying no more than 162, at that level it is a more interesting trade.

[varies] 15/3/2014 13:50

Sar10
If you own lots of MDM shares already you might be tempting Providence if you buy any more.
I would be very surprised if the agreement between MDM and Foster Wheeler permits the payment by MDM of any further dividend without an adjustment to the value of the bid.
Tying my money up for 5 months for a return of 2.8% subject to various risks does not look very sensible to me in the cold light of the morning after and I wonder why I did it !
If you do buy more, then I naturally hope very much that this will prove a sound decision.

[sar10] 15/3/2014 12:35

Varies, I am still contemplating the same move but haven't had the nerve to push the button yet. I already hold a boat load of these so I just keep thinking I should be happy with my fill!

Regarding counter offers, it wouldn't surprise me...I was a holder of Costain when they bid for May Gurney which subsequently got trumped by Kier so not out of the question.

On another note, has anybody got any clarification on the final divi? That may sway my decision to buy more...

GLA

[varies] 14/3/2014 19:36

Rather naively (and not being familiar with MDM) I bought a few shares this morning for my ISA at 164.8p. This works out at 165.35p including expenses to give a return of 4.65p per share or 2.8% over 5 months (= 6.7% p.a.)provided the deal proceeds and we get paid in August.
This is hardly exciting and the negative factors mentioned by Exbroker probably justify the cash discount as he says.
I have misgivings about this punt but hope for the best. A higher offer from elsewhere would indeed be most welcome but there seem to be fewer counterbids nowadays than there used to be.

[exbroker] 13/3/2014 19:04

There are several reason that this deal is at a bigger spread over cash that you would expect.
1 It failed last time catching several arbs long the stock, including me.
2 It is not subject to the Panel Rules
3 The deal wont close until end August
4 Foster Wheeler in AMEC tie up
5 See 1 above!!

[sar10] 13/3/2014 16:12

M1das -thanks so much for the explanation. Like you, I think this one is going through. Still toying with putting another few k in but will sit on my hands a little longer....

Cheers and good luck

[m1das_touch] 13/3/2014 13:40

sar10 - there's normally a slight discount to the offer price in takeover situations, to reflect risk that the deal might not go through. I think perhaps there's particular doubt here as we've been here before with MDM. Personally I think it will go through this time, or a better offer might come along.

I also thought of taking advantage of the arbitrage opportunity here, but decided against it in the end, as I don't want to lock up too much capital for a fairly minor % gain. If other suitors come along, it could end up taking several months to play out.

[haywards26] 13/3/2014 13:16

Strange news as Foster Wheeler themselves are currently in a bid/offer situation with AMEC looking to complete a takeover....I am a holder of AMEC so will ultimately benefit from any MDM deal by the look of it...

[sar10] 13/3/2014 12:59

I am really tempted to purchase more at this price - like somebody has already said, its a 3-5% mark up if/when the deal goes through + the possibility of a final dividend.

Anybody any idea why the share price isn't closer or on £1.70???

[davidosh] 13/3/2014 11:32

So 18 months down the line and the offer is 7% lower than the last one...

Highlights

Merger:

· Recommended merger with ASX-listed Sedgman Limited ("Sedgman") (ASX: SDM)

· Offer Price of £1.81 per MDM share values MDM (on an undiluted basis) at US$109 million1 (£67.9 million)

· 100% cash consideration to non-Key Shareholders

[m1das_touch] 13/3/2014 11:22

I wonder if this deal might be more lucrative for the board than for shareholders? I noticed this interesting little excerpt from the RNS:

Foster Wheeler will also make an offer to acquire all outstanding options held over the shares of MDM ("MDM Options"). The MDM Options shall be cancelled upon implementation of the Merger and each option holder shall be paid cash consideration for their MDM Options calculated in accordance with the formula set out in Appendix I.

[neg] 13/3/2014 10:40

Very disappointing, I shall not be accepting.

[meijiman] 13/3/2014 10:29

Doubt it as its recommended-but you never can say never especially as its a lowball offer. This dividend query should be sorted out.

[merism] 13/3/2014 10:25

I wonder if Kentz are interested in bidding?

[bsharman3] 13/3/2014 09:55

This is a pathetic offer and am annoyed that the board are recommending it as it completely undervalues the business. It should be over £2.

[hop53ton] 13/3/2014 09:07

Not sure if offer price includes a final dividend for year end March or not. Nothing about it in statement. Last year xd was 12 July, before offer due to complete. MDM due to announce results early July I think.

[deadly] 13/3/2014 08:56

Looks like a nailed on gain of 5% if you buy now at 162p.

[spob] 13/3/2014 08:48

I'm not one of those people who allows their vote to be influenced by the crowd or the consensus

I will vote for what I think is right

And keep my shares to the bitter end

[m1das_touch] 13/3/2014 08:42

Will make little difference if you turn it down spob, unless you happen to own the other 57.6% of the share capital which isn't already subject to shareholder approval!

[m1das_touch] 13/3/2014 08:39

There's little doubt really - it's a recommended offer by the board, and those almost always go through.

I think the only doubt will be on the upside, i.e. if someone comes along with a better offer. I was going to sell out this morning if the share-price re-rated to the offer, but might as well hang on now until this plays out.

[spob] 13/3/2014 08:38

I will be

Turning it down

[deadly] 13/3/2014 08:34

Price hasn't risen to 170 suggesting there is some doubt about the deal. But I can't see shareholders turning it down.