Broker Date Rating Previous assessment Latestassessment Latest target
Numis 06/12 Upgrades Hold Buy 245.00p|
|The newest Director at Melrose is David Lis, appointed as an independent non-executive Director on 12 May 2016, having just retired from his job of Chief Investment Officer, Equities and Multi Assets, for Norwich Union IM/Aviva.
In early September he bought around 130,000 MRO at 152 pence. He's already making 20% profit but what else might he see in the new $2.8 Billion acquisition of Nortek.
I suppose he will see a business that has sales of $2.5B, but which has gone nowhere in the last 3 years, except to go further into debt, this being around half the $2.8 purchase price at acquisition. But if he listens carefully in his first board meetings he might hear of a business with huge potential for growth in the range of services provided to residential & commercial properties, both by organic growth of product lines and by further acquisition. He might hear of the potential for moving in a bigger way into the European market & elsewhere. He might even detect a change from the buy > improve > sell strategy to a buy > improve > buy > improve > buy > improve... sell strategy.
I think there is more to come in the way of Rights Issues.
Some Readers may think I'm just trying to talk up the shares. But others who have followed my contributions over several years, might recognise that I'm just offering my wisdom to help them make a good living.|
|"ALLIANCE NEWS PERORT : IN THE KNOW: Analysts Welcome Melrose's Rapid Nortek Restructuring.
The rapid work by Melrose Industries on Nortek underpins confidence the Melrose will be successful at turning around its new US acquisition."
I don't know this Alliance News organisation and I haven't read the full article since this would involve me subscribing, spending money and then dealing with 50 phone calls from them as follow up. From what I see, they seem to compile & report news items, and not carry out analysis or forecasts, I bit like Barack Obama does.
I believe Nortek is being shaped to act as the nucleus of a much bigger organisation. The company & its share price could now go anywhere when this takes off.|
|Looks like the usual ruthless progress is being made. This is exactly how Hanson their boss did it.|
|I think MRO will be the better bet, especially if Nortek was on the smaller side of the acquisition size they were looking at.|
|I am back to this site, and in what I call 'speculative mode'.
I have just sold a few MRO in order to buy BME (the B&M Bargains chain), which looks an even better bet than MRO in the next 1-3 year period, especially given the very turbulent times we have.
In my memory, we've never had such great uncertainty in so many places at the same time, in this case brought about by the common people speaking up rather than leaving some establishment to speak for them, and long-overdue it is. We saw it in the Labour Party leader elections, with the Brexit referendum and now with Trump. Never have the future courses of the U.K. and U.S.A. been so uncertain, in my memory at least.
All this must throw up some wonderful market opportunities if we can predict them.
This requires speculation.|
For small acquisitions I would expect finance by debt but MRO don't like too much debt so big ones could see another rights issue. There are plenty of takers at present, here and USA.|
|The real news we need is the next dividend timetable/calendar|
Would any bolt-on acquisitions or another big unrelated acquisition be financed by
offering further shares to current PI's do you think?|
|"ALLIANCE NEWS PERORT : IN THE KNOW: Melrose's Nortek Deal "Impressive" But Upside Priced In."
'What upside?' is the question to ask here.
I think they probably mean the turnaround of current Nortek, and I must say at least a doubling of the profitability is priced into MRO.
But this is not the only upside I can see. Nortek is a business that can be built on with further acquisitions of many different size. We can expect to see the first of these soon. At some stage, there may be further share issues to raise cash.
This current Nortek just isn't enough of a challenge for these wizards.|
|yes, happily the final result was I got all my money out including the earlier profit. would have preferred to still be holding but as I spent a week or so thinking I was out ~£2000 it all worked out in the end|
|bashfish, as steeplejack says I'd expect the default to be to let the rights lapse. Supposing you were away when the rights issue took place and you returned to find a hefty bill from your broker because they'd taken up the rights!
If you think you've lost your £1,000 then you haven't finished reading the small print. If you bought MRON at 45p I think you should end up with a small profit, although perhaps not after expenses.|
|"Companies with a Standard listing will not qualify for FTSE UK series indices (which may be enough to discourage uptake of the Standard listing option)."
Ok Typo56,thanks for that.You were well ahead of me!
For what it's worth in old money Melrose are now just shy of ten pounds which means that the stock has gone up 2.5 times since the Nortek acquisition was announced in early July when the shares stood at slightly over £4....and the stock had risen strongly on anticipation of a deal from around £3 prior to the deal's confirmation.|
|No,brokers must be instructed to exercise rights since an exercise requires funding.The default is to let the rights lapse and the account will be credited with rights monies when sold for the benefit of shareholders.|
|So after speaking with my broker, it turns out that they do not automatically exercise rights, so unfortunately they expired without any action, taking my profit (and £1000!) with them. An expensive mistake but not one I'll soon forget, always read the small print!|
|If the money doesn't turn up you need to talk to your broker. I'd expect you to receive about 47p per MRON share you held (perhaps a bit less after expenses).|
|45p, so that doesn't sound too bad actually, I am just anxious as to if/when that money will turn up as it appears to be in the aether at the moment; by which I mean I don't seem to have any token that I am owed a certain amount of money|
|You're a couple of weeks too late to take up rights. You should have received information about your options from the company or your broker (if held in their nominee account). Your rights have now lapsed and it looks like you'll receive 47p per MRON. How much did you pay per additional MRON?|
|Yep, that 46.4m volume in the closing auction is due to exiting the FTSE index.|
|what is the mechanism for paying to take up rights? i initially received an amount of MRON equivalent to the value lost when the MRO price was readjusted from ~700 to ~150, i didnt specifically request these MRON or do anything other than be holding MRO when the price was changed. i actually bought £1000 additional MRON after receiving my initial load. apart from that i didnt do anything with the MRON|
|Sorry, Melrose Industries PLC is certainly not in the FTSE 250. They can't be. Effective Monday they've been ejected from the FTSE UK Index Series because they no longer have a premium listing on the LSE. Note the RNS on 31 Aug.
So far it doesn't seem to have done them any harm, but if there's a large volume in the closing auction tonight it will be funds adjusting their weightings.|
|If you didn't pay to take up your rights shares (MRON) they will have formed part of the rump. The shares got placed on 23 Aug at a price of 142p. This represents a premium of 47p over the rights price of 95p. Therefore you should be receiving (or have received) a payment of 47p per MRON you held.|
|probably a dummy question,
when the rights issue came out i received a load of new shares called MRON, i sat on them because i assumed they would be merged back into MRO at a later time. however this morning i notice they have disappeared from my account and i do not have any more MRO holdings, did i make a big mistake and should i have sold or done something with the MRON?|
|Typo56.....Melrose is now in the FTSE 250 and was in the Small Index prior to the equity issue.I guess you're saying,will the "promotion" to the 250 attract index buyers?Well,it can't hurt I suppose.|
|Possibly people shorting and planning to cover with their rights shares? Wouldn't have worked out very well!|