Northgate Information Solutions Share Discussion Threads

[slaterlp] 26/12/2007 09:31

So do I, but we are stuck with I think.

[hotfinance14] 26/12/2007 08:11

Still think 95p is a low price.

[john53] 25/12/2007 14:08

Happy Christmas and New Year to all long term holders.
Patience is a rewarding virtue

[grlz] 24/12/2007 16:12

see the arbs have already started to move in - Gruss Asset Management LLP have taken CFD's over 15m shares long @92

[togglebrush] 24/12/2007 14:50

Market volumes today, a half day trading, are below the median which suggests trading is back to normal. I guess Friday was the big sell off and now people are awaiting events.

"Societe Generale Asset Management UK Ltd said it has sold about 7.98 mln shares in Northgate Information Solutions PLC at 0.92 stg per unit, cutting its stake to 18.13 mln shares or 3.11 pct"

Even the big boys are being cautious.

[paddyfool] 24/12/2007 10:17

done deal anyone thinking otherwise is deluded.

[hotfinance14] 24/12/2007 08:58

4.30pm
KKR to buy Northgate for £593m
Richard Wray Guardian Unlimited, Friday December 21 2007 Chris Stone, the pugnacious chief executive of Hemel Hempstead-based Northgate Information Solutions, stands to make up to £17m after American private equity firm Kohlberg Kravis Roberts (KKR) agreed to buy the IT firm for £593m.

Stone, who has orchestrated the turnaround of Northgate since joining in 1999 when the share price was a mere 20p, will remain with the business despite his windfall.

KKR, whose infamous acquisition of RJR Nabisco in 1989 was immortalised in the book Barbarians at the Gate, is offering 95p a share for Northgate. News of the deal came as a shock to some traders in Northgate, who had been short selling the stock after the company's release of disappointing results earlier this month.

Those figures led Morgan Stanley to slash its price target for the business from 100p to 65p in a note entitled Sailing too Close to the Wind. They warned that the company was in danger of breaching its covenants, something which Northgate denied.

Northgate, which supplies software for services such as human resources and payroll to corporations in 46 countries, was severely hit by the Buncefield oil depot fire two years ago which destroyed its nearby office.

The company said it had been approached with an offer a year ago, but those conversations never resulted in a concrete bid for the firm.

"We have significant experience in the technology services sector and look forward to working with Northgate's management team to address the numerous opportunities to grow Northgate into a leading international provider of software solutions and outsourcing services to the human resources and public sector markets," KKR partner Todd Fisher said

[grlz] 23/12/2007 20:51

hifkdmer - Your dreaming or maybe praying cos u have been wiped out by KKR coming out? - The point is why would this bid fail? (a) its a cash offer and KKR are one of the best resourced PE players on earth. (b) KKR are already buying @95 and have secured 19.9% it will be a short trading week but before the year's out their have over 29.5% as the mjr holders are already selling out. (c) Silverlake put this in play last year but by the time they get their act together with a counter bid NIS will be an asset of KKR - The board are not going to recommend a 105p bid with a 1001 conditions because Silverlake haven't got their finance in-place over a 95p cash offer, there just isn't enough difference to justify it - why do you think KKR have pitched this @95 and not 85 imho it cuts the balls off any debt based bid and makes KKR the winner saving 10p a share from Silverlakes mooted 105p bid last year

I said before a number here have made a decent return - but having said that a contra number were short and got took to the cleaners last week, njoi xmas as best you can. I know I will ;)

[aileron] 23/12/2007 20:01

hello

i last posted on 5693. i purchased on thurs at 62.25p. selling on monday and moving onto the next one. the gain in waiting for nis is just not great enough. moving on. some really good informative posts thank you.

time is limited and ive learnt to have no emotional attatchment

[slaterlp] 23/12/2007 19:48

Anyone got access to TW comments? What is his view of the price?

[togglebrush] 23/12/2007 16:32

Extract from the Times December 22, 2007

"KKR's 95p-a-share offer for Northgate represents a 60 per cent premium on its target's closing price the day before it said that it had received an approach. However, it is only a 7 per cent premium to Northgate's price at the end of April."

I reckon of possible
10% chance of shareholder pressure to jack up price
10% chance of another bidder coming in
70% chance of completing
10% chance of going pear-shaped

[hotfinance14] 23/12/2007 14:07

I am still holding...waiting for counter bid.

[slaterlp] 23/12/2007 12:59

Below from yesterdays Telegraph. Just about sums it up.

Myopic fund managers are hitting us where it hurts

The last time Kohlberg Kravis Roberts (KKR), the US private equity house, came shopping on these shores it walked off with Alliance Boots for £11.1bn. That deal proved a high-water mark before the summer credit crunch took a hold.

Northgate agrees to be bought by KKR
Now KKR is back but seeking bargains on a very different scale. Its latest target is Northgate Information Systems, an outsourcing company specialising in the mundanities of office life such as company payrolls. At 95p a share KKR is paying a 60pc premium to Northgate's closing price on December 11, the day before it originally announced it had received a takeover approach.

But the deal strikes me as odd. According to Chris Stone, the chief executive, he was phoned yesterday and congratulated by the company's institutional shareholders for securing such an attractive price. A year ago shareholders promised to back the company's debt-funded expansion plans but instead shorted the stock heavily. The public market has been driving down Northgate's price all year with analysts issuing sell notes and raising concerns over the company's finances. KKR is delighted, happy to back Northgate's plans for the future. Shareholders are left with 95p a share and large holes in their feet where they shot themselves.

Short-termism is not the preserve of private equity (as so many like to claim) but our public stock market instead. Northgate may well turn out to be the better bargain for KKR than Alliance Boots but either way our pension funds lose out thanks to the myopia of fund managers.
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[slaterlp] 23/12/2007 12:41

grlz,


good post, shame though, I would have liked to get more by waiting. But you are probably right about the price and this bid will go through.

I will still hold though for the same reasons as you.

And hifkdmer I am hoping it will fall through, as then I can buy a whole more. Can you imagine how hard these would fall in the current markt conditions? It would be like printing your own money as the share price recovered after falling to way below it was worth.

Sure the divis not much, but the 3p I can get commision free is worth 1800 quid to me, and I dont have anywhere else I could put the money right now that would gaurantee that return.

Although, I have been watching the way that FGP moves over the last year or so. I already have 2000 of them and I do plan to use some of the NIS money to trade FGP. And now they are in the 100, I think they will rise and fall even more with bad market news. So plenty of scope there to earn a dollar or two.

[mr leeson] 23/12/2007 12:07

Sold my lot on friday,held these dogs for 6 years,should have traded them more like i did at the start of late 90's but thought i'd invest in them rather than trade.

Will probably buy back when they drop if i've any cash left after building but for now just got a few tepnel and s life left

[eithin] 23/12/2007 11:28

Holding for the 95p plus the divi. Must be one of the crazy ones...

[hifkdmer] 23/12/2007 11:20

no guarantee the bid will go through, although highly likely.
Anyone holding for an extra 2-3p is crazy with the slight possibilty of the bid falling through the share price would collapse.

[grlz] 23/12/2007 01:37

slate - I agree with u totally - 95 it's a giveaway but fair value at this point - Arinso I know will go well and NIS if it remains independent could easily carry a 120/150 share price valuation as a result -> problem is what I or anyone else believes counts for sh#t as Arinso has yet to prove it's worth, even though early signs are good this is all washed away by the high debt NIS currently carries eg. MS note

KKR will now speculate with this risk but I believe Stone is sticking around as CEO and KKR will fund a continued expansion programme as well as the pension shortfall so great news for staff.

I would like another bidder to come in but I doubt it KKR hold 19.9% and are buying more. The bid is all cash and they have the NIS Board behind them - They could have offered 80/85 but 95 prices out Silverlake and any other debt based offer. I am going to hold until I get 95 direct as the % is there and it's assured.

imho The market is unforgiving and the Arinso purchase pushed the limits - I believe Stone's strategy was right as Arinso takes the company to another level, pity the "credit crunch" shone a harsh light on it after the event - Stone is capable of delivering the objectives KKR want and KKR can deliver in lower cost debt facilities than NIS can negotiate as a standalone business so the deal works

KKR rehashing Northgate's view of Arinso being transformational is a poke to Numis who are looking like idiots. The analyst over at Numis should bank his bonus quickly imho..

I know a few here have made a decent return but the real winner is Jos Sluys former owner of Arinso - he sold Arinso to Northgate at the top of the market and now makes a huge additional profit on his NIS stake - his Christmas has come early!!

we didn't see a "£1 by xmas" but it got close enough ;)

[slaterlp] 22/12/2007 20:41

I'm holding. See if anything happens.

[john53] 22/12/2007 17:46

slaterlp Have you sold out or are you waiting to see what happens?

[slaterlp] 22/12/2007 16:56

well like I said, if its such an undervalued company (sp too low), why should all the holders agree to sell, since it is agreed that it is a global force likely to be worth a whole more this time next year.

I sure hope some other PE group steps up to muddy the waters. Maybe force KK to up their offer.

[sharw] 22/12/2007 15:11

Stone speaks:

[bullspread] 22/12/2007 15:07

sold 100k 92.5 i am out.

[togglebrush] 22/12/2007 14:51

"Back of a Beer Mat number" these are thoughts and ROUGH numbers on the takeover

On Friday morning:-

Those who have irrevocably undertaken to do in respect of their own beneficial
Directors holdings of 1,660,231 representing approximately 0.3 per cent.

Those who have each today sold to NIS Acquisitions:-
GAP North Limited (a General Atlantic company), 68,780,000 Northgate Shares
and Jos Sluys, a Director of Northgate, who 45,349,200 Northgate Shares, in aggregate representing 19.6 per cent.

Other parties:-
Party Interest in Northgate Shares
Goldman Sachs International 9,541,803 (long)
Goldman Sachs Asset Management L.P 150,299 (long)

Goldman Sachs International, which is authorised and regulated in the UK by the
FSA, is acting exclusively for NIS Acquisitions.

This doesn't yet add up to a KILLER 29.5% of share holding

By Friday evening using Market Forces.

Market Volume was 181,655,570 transaction or 15% plus of shares changed hands. WHO BOUGHT them I know not.???
Prices seem to be around 91.5 Buy and 92.5 Sell

An interim dividend of 0.29p is payable on 21 January 2008 to shareholders on the register as at 4 January 2008. (Ex 2nd January)

Timing

Expected to become effective in March 2008

SELL or not to SELL that is the question ???

i) Another offer is POSSIBLE

ii) A price increase under shareholder pressure POSSIBLE

iii) Hold for 3 months receive an extra 3.5pence plus 0.29 pence dividend then shares acquired without paying commission. That is an extra 4.5% over three months or say 18% annual yield. PROBABLE. Do your own calculation please!

iv) All goes pear shaped ... just might be possible!

Opinions and comment is invited.