|Looks like the market are about to re-rate NBF to the equivalent RGD price with respect to the takeover - last weeks buy price of 167p looks like it was a bargain.
Once the deal is done and dusted the enlarged RGD will be a good share to hold and tuck away IMO - they should start to attract the interest of bigger investment companies and the share become re-rated accordingly.
Hope so anyway as they look far too cheap too me.
|Hi dave.....I'm still holding.
Although I'm disappointed with the takeover, I've had a look at RGF and have taken the decision to hold shares in the enlargened Company, as I reckon that the value of NBF within it, overall makes it at worst reasonable value.
I'm adopting a wait and see policy for a while before committing more funds, but from my viewpoint at the moment I would say that's more than likely.
|RDG interims due soon and the shares have bounced over the last couple of days - NBF trading at a discount so look value still at these levels IMO.
|sentiment looks like remaining weak until its a done deal then who knows - the uncertainty of this acquisition is putting people off short term but possibly good value in the long term. Others highlighted the issue of debt. The other is of course synergy - No immediate hurry to buy methinks as uncertainly may last until first results of comined RGD group....|
|Anybody on this BB still holding NBF - the slide in share price of RGD looks unwarrented to me on fundermentals - any comments.
The enlarged group looks good value to me.
|Jassie, the ratio isn't that relevant unless you have the ability to arbitrage by shorting RGD today in any meaningful volume. What matters is the price you will be able to sell RGD at when you get allocated your 1.6236 shares per NBF share.
It was different in the case of SEG & EID, where there was enough liquidty to play those games.|
|Currently getting £1.93/nbf share (1.6236*£1.19)|
|Yes I am holding and expect the RDG share price to rise around the time trading in NBF ceases.|
|If you want to buy RGD shares, NBF is a cheaper route at the moment.|
|Agree with you Typo - although I think the drop in the RGD share price is a short term one. The deal at current prices is only a few % premium to NBF at the time of the first announcement not 220p a share.
NBF on 175p bid and offer for some time now - strange..|
|If NBF wanted to look after their shareholders, why didn't they hold out for a 220p cash deal? If it was a good deal for RGD they should have funded the acquisition through a placing/open offer/rights issue.
Also, surely it would make sense for NBF to be acquiring RGD?
The whole thing is a bit odd IMO.|
|Once trading in NBF has ceased I expect the share price in RGD to recover back to 140p plus level - while trading continues in both the market is going to factor in price descrepancies between the two companies with regard to share price value.|
|True. Same thing happened with XNC.|
|Its not a £2.20 offer anymore - RGD shares are significantly down this morning - if they drop to £1.14p any premium has been removed on my holding of NBF purchased at £1.83p.
I think RGD will bounce back though so I will be sitting tight on these.
I have seen very similar situations before.|
|£2.20 offer effectively and no increase in price?!?
Shares rarely make any sense to me.|
Yes the debt may be one of the reasons for the weakness in the market at the moment coupled to a few taking a profit and running - will see what IC, Shares, GCI think of it over the next few days.
Corporate Synergy`s forcasts suggest RGD is cheap and the company update today was encouraging - I dont expect the weakness to last once those who want out are out and those looking to take advantage of the drop buy in.
I will post the gist of any GCI comment once its on the website.
|Not woried about the debt Dave?NBFs debt looks thinly covered from the results today.The Group does look cheaply priced though..|
|Yes I think your right - similar price drops have occurred before after takeover announcements - Hercules/Erinaceous springs to mind last autumn - the price initial rises, then drops, then rises again as the value begins to be realised.
I am going to hold as I beleive from the research I have done the enlarged RGD will be on a cheap rating going forward once the synergies between the various businesses within the group have been realised and established.
|Took 195p I'm afraid. I think it will bounce back but there'll be a lot of people exiting in the short-term who don't want/know RGD.|
|So its a done deal - any comments? - after a initial 20p rise it has fallen back with selling - seems worth holding on to me.
2p interim divi nice too.
|I dont hold anymore but am keeping a watching brief on the situation.I am surprised it has taken so long for the two parties to clinch a deal though...and interesting that NBF have remained at 18% discount to the 'offer price' of 220p.The market doesnt seem convinced about the deal or indeed if it will go through imo.Also NBF seem to sit oddly with RGD but thats a personal opinion.
The main thing that worries me is the combined debt.Should the deal go through RGD is likely to be limping along with a debt burden of near £36m...if you add the NBF debt(£27m from memory) to RGDs £9m.NBF have an excellent cashflow however but I have no figures for RGDs.
Intrigued enough to watch and wait however and may even buy back if I get satisfatory view on the debt situation.|
|Another bit of research threw up this from GCI Mag in May 05 :
The Real Good Food Company (RGFC) is not the only consolidator in a fragmented food industry. But if rumours of a large acquisition are true, the company may be on the verge of becoming a very serious player indeed.
Run by chairman Pieter Totte, RGFC was floated on AIM in September 2003 with a buy-and-build growth strategy. While the company targets small private businesses where an owner may want to exit, most of the businesses it has so far acquired have come from larger groups looking to dispose of non-core, and often loss-making, divisions. According to Totte, these businesses are ideal turnaround situations.
RGFC operates four subsidiaries: Haydens Bakeries supplies premium desserts to Waitrose and Marks & Spencer; Seriously Scrumptious is a specialist cake business; Coolfresh assembles and distributes re-packed sandwiches; and Five Star Fish, RGFC''s fourth acquisition, made last May, is a profitable white fish
products business. The latter cost ?16.6 million but its appeal lies in its unique
manufacturing process, which will be introduced to the other companies.
Totte is no stranger to the food industry, having assisted numerous successful companies such as confectioner listen, premium cake and bread maker Finsbury Food, premium ice cream maker Hill Station, and sugar, nut and dairy products supplier Napier Brown Foods. He is even setting up an operation to farm the Australian fish, barramundi. He says he may float this next year.
But he insists that RGFC is his ''baby''. ''Although I''ve been involved in setting up many other businesses, 90 per cent of my time is devoted to this business,'' he says.
Results so far for RGFC have been unspectacular, but that reflects the restructuring that has been taking place. For the 16 months to end-December, turnover increased from ?3.7 million to ?28.8 million but losses increased from ?232,000 to ?698,000. However, Totte claims the business was profitable in the second half of last year. Net debt is ?9 million.
Subsidiaries Haydens and Five Star are profit-making but the other two have incorporated new management and pulled out of loss-making contracts, such as the Coolfresh deal to supply product to Caffe Nero throughout England. By focusing on the area within the M25, Coolfresh will strip out the horrendous logistics charges it incurred before.
The key, says Totte, is to go after large acquisitions. ''To be taken seriously, we really need to place the company on the radar screens of larger fund managers,'' he says. ''In order to do that, a big jump in our market cap is needed. In addition, to achieve better economies of scale we need to be valued at £50 million at least.''
RGFC is currently worth ?20.9 million. But rumours abound that a larger acquisition or two is on the way. One possible target is Napier Brown Foods, which Totte helped take to AIM and which in March announced it was in talks with an unnamed third party that could lead to an offer. Valued at ?54 million, Napier Brown would amount to a reverse takeover for RGFC. One attraction would be the potential synergies from having an in-house supplier of sugar, nut and dairy materials.
Ignoring further acquisitions, newly appointed broker Numis forecasts the company will produce pre-tax profits of ?3.6 million for the current year, which would produce earnings of 17.8p a share. A prospective p/e of 8.3 looks very reasonable, but, given Totte?s ambitions, this is likely to be a radically different business in a year?s time.|
|Corporate Synergy have a STRONG BUY advice note out on RGD - issued mid July - quoting some tasty EPS estimates for 2005 and 2006 which would make the shares very cheap if correct and on a P/E of 6.
|Decided to buy in today - I feel the enlarged Real Good Food group will look pretty good value once the deal for NBF is announced - RGD AGM early August so maybe it will be then?