New Star Asset Management Share Discussion Threads

[induna123] 12/1/2009 07:02

Get in early if you want to double your cash. Exciting week ahead.

[simglo] 12/1/2009 06:06

My advice is don't be greedy. I've had my fingers burned in the past. I only have about £500 on this at 2.70p per share. If it trebles I'm extremely happy. It would take many many years to make that much in a bank. Cheers.

[duncancosgrove] 11/1/2009 23:21

What are people's opinions on the 'right time to sell' in a situation like this?

Is it best (and safest) to hold up to the point of acquisition then sell before the deal goes through, or to hold and see what fortunes the sale brings? As i read it, the share price is expected to go up as speculation builds and offers come in - should a PI be looking to sell at the peak of this period as opposed to hold on for dear life and take whatever comes out the other end, so to speak?

Thanks for any help!

[knowing] 11/1/2009 23:11

'If they de-list and get their house in order, and then re-list again or sell themselves when the market has picked up in 12-24 months, they will come back with much higher levels than the current share price. We think it will come back to minimum of 50 pence within a year.'

[mercier et camier] 11/1/2009 22:12

onasis

I think the delisting is to do with the share make up of the company after the restructure. The majority of the shares will be preference shares and these will not be listed. They will eventually make up over 75% of the share capital. My understanding is that for a company to be listed on the LSE a certain percentage of the company's shares must be listed and tradable. I believe it is 25%.

Not 100% sure though.

[onasis] 11/1/2009 21:27

Why they wouldn't like to keep in the market a company that is more likely to be 50-100 times up in a few years?

[mercier et camier] 11/1/2009 21:24

Treacle28 - 11 Jan'09 - 21:03 - 981 of 981

"Any offer has to be approved by the shareholders..."

Any offer does not have to be approved by the shareholders. NSAM has outstanding debts to the banks of £240m that it cannot service. The banks call the shots here not the shareholders. The banks have put forward a restructuring plan, shareholders should be grateful they didn't file a petition to wind the company up.

chry

If a bid for NSAM is put forward and accepted it makes no difference if the shares are trading or delisted you will still get what is being offered for each share.

[onasis] 11/1/2009 21:24

My point of view is that if Schroders buy NSAM even for a pound, the share price will rocket. The share price went down to 0.05p because of uncertainty. Now in the arms of a Giant like Schroders the future will be rosy again. That's why i'm saying that the take over price is irrelevant.

[treacle28] 11/1/2009 21:21

Onasis, that depends on if the buyer wants to keep the shares listed on the market.

[treacle28] 11/1/2009 21:13

Looks like a possible bidding battle between Schroders, Gartmore, and Hendersons. Schroders have a cash pot of £700 million to spend!

[onasis] 11/1/2009 21:13

I wasn't talking about a 20p bid. What i mean is that after the company get rescued and back to business as usual, then without todays ( or should i say yesterdays) uncertainty the share price will travel north with high speed.

[treacle28] 11/1/2009 21:11

Gartmore and Henderson lead New Star race

Date: 11 January 2009
By Terry Murden, Business and City Editor
GARTMORE and Henderson are believed to be front-runners in the bidding for New Star Asset Management, which is expected to be sold within weeks for upwards of £100m.

Aberdeen Asset Management has also been tipped as a contender by sources close to the sale process, even though chief executive Martin Gilbert has distanced himself from it.

Following previous indications that Aberdeen would not be in the frame, Gilbert says in an interview with Scotland on Sunday today that New Star will go to a cash buyer. In the current market his firm is not interested in raising debt to pay for acquisitions and has just bought the asset management business of Credit Suisse in a £250m all-paper deal.

Yet despite his apparent lack of interest, City sources have linked Aberdeen and New Star due to them being seen as a good fit and because of Gilbert's close relationship with New Star boss John Duffield.

"We would love to own it because it is a very good business, but our reluctance to take on debt will preclude us from the process," said Gilbert.

It is thought that up to 10 firms expressed interest in New Star, which saw its share price slide towards the end of last year, culminating in Duffield ceding control of 75% of the business to five banks in exchange for the cancellation of £240m of bank debt. This resulted in a strong outflow of funds, leaving New Star with a fund of about £14bn.

There were tentative attempts at a management buyout by Mark Beale and Richard Lewis, head and deputy head of New Star's institutional fund management arm. They were part of the team that joined New Star in 2000 from global investment manager WorldInvest. It was the acquisition of WorldInvest and its £1.1bn of funds that provided the launching pad for New Star.

Investment bank UBS is handling the sale, which is also thought to have attracted the attention of Neptune and Schroders.

"Neptune made a lot of noise, but people were puzzled as to whether it had got the cash," said one source. Schroders could still be among the likely buyers.

Indicative offers are now in, and it is thought that all parties want to see a deal finalised quickly.

Duffield is likely to depart as soon as the break-up of New Star is complete.

[treacle28] 11/1/2009 21:03

Any offer has to be approved by the shareholders including Blue Planet with their 6.7% stake. They did put a value of 20p as a very conservative valuation of the company in its current state after the restructing. The ft is stating that about ten buyers have put first round offers in...so it might be an almighty bidding battle.

[onasis] 11/1/2009 20:54

i can't stop thinking about Blue Planet's comments of share price at 20p is very conservative for now. And i believe that if the winning bid is either AAM or Schroders the share price will easily be above that by end of Jan.

[treacle28] 11/1/2009 20:48

This is very encouraging for a Bidding War:-

'About 10 potential buyers, including Schroders, have submitted first-round proposals for New Star, the struggling fund management group'.

'People familiar with the situation said the price tag being put on New Star was substantially above £100m'.

[treacle28] 11/1/2009 20:45

Schroders among the suitors for New Star
By Andrea Felsted and Kate Burgess

Published: January 11 2009 18:54 | Last updated: January 11 2009 18:54

About 10 potential buyers, including Schroders, have submitted first-round proposals for New Star, the struggling fund management group.

Other parties that have submitted indicative proposals for the asset manager, which in December agreed a debt-for-equity swap with its banks, include Henderson, Gartmore and Neptune Investment Management. Aberdeen Asset Management has taken an opportunistic interest after its £200m share-based acquisition of Credit Suisse's traditional fund management business.

People familiar with the situation said the price tag being put on New Star was substantially above £100m, although some other observers were sceptical that this level would be achieved.

New Star's banks, a consortium of HBOS, Lloyds TSB, HSBC, Royal Bank of Scotland and National Australia Bank, put New Star up for sale in December.

First-round bids were due to be submitted in early January.

A speedy sale would help to end uncertainty among clients about the future of the fund management group and stop more redemptions from New Star funds.

New Star, which managed more than £20bn six months ago, now has assets of about £11.5bn.

The bank consortium is hoping for a quick disposal of the whole group rather than a break-up, which it fears could leave it with a rump of the business that could be difficult to shift.

The asset manager has taken measures to retain key staff until March, and continues to work on restructuring its debt.

New Star was founded by John Duffield in 2000 after he left Jupiter, a rival fund manager. It established itself quickly as one of the best-known fund management names on the high street.

But it put itself in the hands of its banks after a sudden drop in confidence and a sharp rise in redemptions by clients following the property market downturn and poor performances from star fund managers.

The interest in New Star continues the wave of consolidation in the fund management sector. As well as Aberdeen's deal, F&C, majority owned by insurer Friends Provident, continues to talk to potential acquirers, while insurance entrepreneur Clive Cowdery, who recently raised £600m, is keen on asset management because of economies of scale.

New Star and Schroders declined to comment.

[westcoastrich] 11/1/2009 18:59

Official figures due in a fortnight will confirm if the UK is in recession. A country is considered to be in recession when it experiences two consecutive quarters of declining economic growth


Whoever buys this distressed company will be leaking dirty water when that data comes out

[treacle28] 11/1/2009 17:55

This is good:-excess of £100m

'The investment house last week put in a bid for its rival, thought to be worth in excess of £100m, as part of a process that could see the business snapped up within weeks'.

'Schroders is considered a front-runner in the contest since it has a cash surplus of about £700m, which puts the group in far stronger financial position than most fund managers at the moment'.

[treacle28] 11/1/2009 17:30

Just got back. Friday's volume and close was good. Excellent press mentions as expected and a bidding war should emerge. IMO should see the price get upto 5-6 pence minimum tomorrow.

Someone's posted this on iii:-

'The re financing deal has not yet been approved by share holders
If someone offered £100m before refinancing then this would be 38p per share after debt this would equate to 1.6% of FUM.
Surley there are others who agree with Gilberts view that NSAM are a "very good business"'.

[salonie] 11/1/2009 17:13

The first £100m will cover the preference shares on any sale. Then the baks own 75% of anything left over from the ordinary shares. Therefore if it sells for £150m, you are looking at £12.5m to ordinary shareholders after the banks take their cut. So excluding any debt you would be looking at 4p ish per share based on £150m sale. Should it go for £200m as reported elsewhere you may get 8p approx per share.

[doorway] 11/1/2009 16:52

company valued at around 7m offer 100m this will at least 10 bag..

[chrysippus] 11/1/2009 14:34

Thanks again wattzy, also expecting a rise in the morning on all the speculation.

The not being greedy advice is so true - I've had much more success recently using a system that takes profits on larger stocks at 10% then buys back in if the share price still looks good. It worked really well with the miners (fres, kaz, pog)over the past fortnight, catching the rise and minimising the hit on the fall leaving a good profit. Using it with the banks at the moment (hbos, stan). Generally, I'm wondering whether sentiment will rotate between sectors for a few months whilst the economic outlook is so uncertain.

Alongside this, running a couple of higher risk trades - this is one and considering mnr.

Good luck back at you

[wattzy] 11/1/2009 14:22

Chry,

I believe it's open ended but i am no expert i guess it depends on the viability of the company going forward, but there are others on here who will have more knowledge than i do.

I believe we will probably hear of other interested parties this week now the first bid's been revealed which won't hurt the share price. All i will say is don't get greedy in these times, a profit is a profit unless of course you can afford to lose the lot on the chance of big gain's later on.

Good luck mate should be a bit of fun for a Monday morning.