Range Cooker Share Discussion Threads

[westcountryboy] 16/8/2002 21:54

james8

yesterday's takeover update said:

"The undertakings previously entered into by John Armstrong (Chairman of the
Company) and Nigel Wray have now expired. These undertakings committed them to
enter into irrevocable undertakings to accept an offer if made by the Existing
Potential Offeror at or around 20p per share before 13 August 2002, and
committed them not to take part in any talks or negotiations with any third
party for the sale of shares in Range at a lower value than that envisaged by
the heads of terms agreed between the Company and the Existing Potential
Offeror."

I interpret that to mean that there has as yet been no formal offer by Russell. What I can't work out is why not? And if there was no offer, what is to stop AGA (if it is AGA) offering 20p or even less - if, as is possible, Armstrong wants to sell?

WCB

[netsurfer] 16/8/2002 15:07

the whole thing stinks. directors trying to have the company on the cheap at 20p each share. i welcome the interest of AGA. hopefully, if a bid succeeds, we will be getting fairer value. Armstrong has a duty towards himself and other shareholders.

[james8] 16/8/2002 14:53

Hi WCB,
Sloppy use of words on my part to say 20p bid rejected- more put to one side.
The original statement saying RCC would accept an offer of 20p or more doesn't necessarily mean they HAVE to accept a 20p offer IMO.
I wish Armstrong well for compassionate reasons, but it is also in shareholders' interest that he has the strength to thrash out a good deal for us.(IMO not something we can rely on other directors to do).
I'm surprised to see any slippage in share price because I feel it should be underpinned at 20p.

[westcountryboy] 16/8/2002 14:00

Hi james8

Thanks for the Indie reference. In fact the article does not say the 20p bid was rejected and I don't quite understand how it could have been rejected, given the earlier statement that there was a binding agreement on Armstrong and Wray to accept it. I suppose the board meeting without Armstrong might have rejected it? Or did Russell withdraw it for some reason?

I do think it's bad that we're not being told more.

Cheers
WCB

[james8] 16/8/2002 10:09

This is from the |Indie.
Says that Russell made a bid of 20p which was rejected and that AGA is the 3rd party. Before RCC were talking of offers in region of 20p. Sounds more encouraging.




16 August 2002 09:49 BDST Home > News > Business > News

Range Cooker receives second takeover approach
By Katherine Griffiths, Banking Correspondent
16 August 2002
The chairman and chief executive of The Range Cooker Company yesterday informed the Stock Exchange and shareholders that he has been working part-time for several months due to illness, at a time when the company was in takeover talks.

John Armstrong, who holds a 68 per cent stake in Range, said in a statement: "I have been unwell during recent months and have relied upon the rest of your board to oversee and pursue the company's strategy."

Range Cooker, which has been talking about a management buyout by a group of directors since February, also announced that it has received another approach.

The company said it would continue to talk to both parties as the period of exclusivity had ended on the first offer. Its shares added 1p to 19.25p.

The first offer was from Robin Russell and other directors, which was backed by the venture capitalist Graphite Capital Management. Mr Russell offered 20p a share, valuing the company at £31.8m.

City observers said the new offer may have come from Range's arch rival Aga Foodservice. Aga would not comment, but it is believed to have been eyeing Range's business because it thinks the company would fit well with its own.

Range Cooker's main cooker range is branded Britannia. It sells stoves costing between £1,200 and £35,000, mainly to independent retailers.

Range Cooker said it "remained positive" that discussions with Mr Russell and the directors would "continue to make good progress".

Range said that if it invited the company behind the new offer to carry out due diligence and then did not take up any resulting offer, Range would reimburse costs up to £350,000. The company updated the market on its bid situation as it issued full-year results to 30 April.

Range Cooker said pre-tax profits rose to £4.4m from £3.6m a year earlier, slightly ahead of market expectations, on a 14 per cent increase in turnover to £15.4m against £13.5m before.

The company said there was no dividend due to the ongoing takeover talks. It added that if both lots of talks fell through, the board would consider recommending a special dividend.

[washbrook] 16/8/2002 08:24

article in :-
money.telegraph.co.uk

[washbrook] 16/8/2002 00:58

Graphite Capital Management Limited

Address 4/F Berkeley Square House
Berkeley Square
London W1X 5PA

Website www.fandc.co.uk

Contact James Nelson
[e-mail]
Tel. [phone]

Investment Trusts

Graphite Enterprise








AITC Services Limited is authorised by the Financial Services Authority.
Daily Statistics and other daily data supplied by Fundamental Data. For further information, please see www.funddata.com

[washbrook] 16/8/2002 00:53

15.08.02 :confirms that discussions have made good progress and are continuing with Robin Russell and certain directors of the company (backed by funds managed by Graphite Capital Management), which may or may not lead to an offer being made for the entire share capital of the company. The undertakings previously entered into by chairman John Armstrong and Nigel Wray have now expired. These undertakings committed them to enter into irrevocable undertakings to accept an offer if made by the existing potential offeror at or around 20p per share before 13 August 2002. These undertakings also committed them not to take part in any talks or negotiations with any third party for the sale of shares in Range at a lower value than that envisaged by the heads of terms agreed between the company and the existing potential offeror. The company confirms that it has been approached by an other party, and that discussions have additionally now commenced with that party which may or may not lead to an offer being made for the entire share capital of the company. John Armstrong has again agreed to waive part of his entitlement if such an offer is made and in the event that he accepts a third party competing offer, he would personally, under these circumstances, re-imburse certain costs incurred up to a value of £350,000. Whilst this agreement has been entered into in place of the previous agreement with the existing potential offeror, the company remains positive that talks with the existing potential offeror will continue to make good progress. A further announcement will be made in due course, when appropriate.

[hectorp] 15/8/2002 22:55

He should not be trying to soldier on , part time, he'll not get better that way, if its several months, it sounds like he won't make a recovery sufficient to be the powerful character needed at the top with the stamina that demands. I wish him all the best , but he should step down now and let somone with the energy to do so, carry the company forward.

[hectorp] 15/8/2002 22:55

He should not be trying to soldier on , part time, he'll not get better that way, if its several months, it sounds like he won't make a recovery sufficient to be the powerful character needed at the top with the stamina that demands. I wish him all the best , but he should step down now and let somone with the energy to do so, carry the company forward.

[james8] 15/8/2002 14:41

Cooker chief 'too ill' to discuss bid

by Jim Armitage, Evening Standard

Today in Business





THE chairman and chief executive of Aga arch-rival The Range Cooker Company has been seriously ill for several months without disclosing the fact to the stock market, it has emerged.

John Armstrong has been working a maximum of about two days a week during a period when the group was in takeover talks and fighting to keep sales of its Britannia cookers ahead amid economic turmoil.

The 57-year-old's health problems only emerged today when he issued a statement accompanying full-year results, and an update on takeover negotiations. 'I have been unwell during recent months and have relied upon the rest of your board to oversee and pursue the company's strategy,' he revealed in notes to shareholders.

A spokesman said he was too ill to talk to Press or analysts about profit figures released today. It is extremely rare for a company to make such an announcement.

The period of exclusivity granted to talks for a venture capitalist-backed takeover from director Robin Russell has ended, and the company is in discussions with other possible buyers.

Pre-tax profits in the year to 30 April were £4.4m against £3.6m a year earlier on turnover of £15.4m against £13.5m before. There is no dividend due to the takeover talks

[shaggy666] 15/8/2002 10:51

Price slipping, city dosnt think its great what Range are doing, bum deal all round. IMO

[james8] 15/8/2002 10:41

Washbrook,
I agree it's a great company (I've held for 2 yrs).
The price does tend to spike up in Feb so maybe it was normal mkt behaviour.
Anyway I just hope that Mr Armstrong's health doesn't cause him to get forced into a sale too cheaply.

[washbrook] 15/8/2002 10:26

James 8
I don't think that was the reason they shot up.
Look at the results from 1997
Year profit £m eps divi share price day before results.sp day of results
1997..0.99..0.63p..0p..share price not known @ time of results
1998..1.96..1.19p..0.13p share price not known@ time of results
1999..2.2..1.0..0.43p 7p..8.5p
2000..2.83..1.22p..1.0p..15p..15.75p
2001..2.83..1.56p..1.88p..15.5p..17.75p
2002..4.41..1.94p..0.8p..18.25p..19.75p @9.10am
Therefore since 1997 results
Profits 345.45% up
eps 203.125% up

[james8] 15/8/2002 09:45

oniabsta,
I agree, it's a safe income stock. With the wide spread it's better to hold out for a bid

[james8] 15/8/2002 09:42

I think they shot up to 25p because of bid rumours

[oniabsta] 15/8/2002 09:40

I'm holding, even though i'm fed up with this delay i can only see a win/win situation. If the bid is successful then it's 20p min (still above bid price)If i'ts not then the dividends will resume and the profits and therefore the share price will rise over time.

[leslas] 15/8/2002 08:53

I agree there is something not right here they went to 25p untill they said bid at 20p????

[washbrook] 15/8/2002 08:45

Although I sold out my holdinggs @22.5p and 22.6p it is sad what has gone on in this company.
20p selling off the company and now the talks are off.If the major shareholder wanted to get rid of the company surely he could step down fom c/e and board could find another.Eventually selling off his holding to other potential buyers.
Forecast for 2002 results £3.8m profit eps 1.7p divi 1.4p.
Actual £4.2m 1.94p 0.8p
But for the announcements on 15.2.02 at 20p offered for the company the share price would be 30p or more.
Last year when results were announced on 3.7.01 profits 3.57m share price went up 2.25p on the day and were cheap then .
Now I dont know but what are the other directors there for?
Sad very sad.

[hectorp] 15/8/2002 08:43

If they can't see offers OVER 20p they simply don't need to accept it. And why should they? This is a profitable company, dividend well covered, ROE of 78% , yield of 6.44%.
- why no final div is a mystery however - and is about the one thing that stops me buying at the moment.

This won't be one of the 'popular hype' shares - may be worth buying to see what happens, at least at 19p you would get future divs and your investment money back if you sold .

[westcountryboy] 15/8/2002 08:38

Are they flogging it cheaply? I agree the wording of the takeover progress statement is ambiguous, but it's possible that they stalled on the first offer because a better one came along. There is now a prospect of a genteel bidding war.

Also note the explanation that Armstrong has been ill and I expect it was this that generated the original decision to sell out. Hardly his fault.

Price has responded well to the news; let's hope the shareholders can extract a takeover price above 20p.

WCB

[shaggy666] 15/8/2002 08:07

No Divi, Flogging the company cheap, surely illegal as not in the best interest of the shareholders.

[hectorp] 15/8/2002 07:59

Hpw an the company be taken over at 20p, thats too cheap -surely the shareholders would not pass that. ?

Results very decent, nice wee company IMO.

[shaggy666] 15/8/2002 07:46

WHY DO WE EVEN BOTHER????????????????????

LONDON (AFX) - The Range Cooker Company PLC reported profit before tax of 4.4 mln stg for
the year to April 30 2002, up from 3.6 mln and slightly higher than the market expectation due to
the strength of the product range and the growing demand for high quality domestic cookers, it
said.
The group said current trading is at the same level as the corresponding period last year,
despite the market being suppressed compared to the previous year.
The company also updated on takeover talks and confirmed that discussions have made good
progress and are continuing with Robin Russell and certain directors of the company which may or may
not lead to an offer being made for the entire share capital of the company.
It added that the period of exclusivity granted to Robin Russell has now terminated and talks
with other parties have now commenced, which may or may not lead to an offer being made for the
company.
Chairman John Armstrong has again agreed to waive part of his entitlement if such an offer is
made and in the event that he accepts a third party competing offer, he would personally, under
these circumstances, re-imburse certain costs incurred up to a value of 350,000 stg.
The group also said today that, whilst the potential takeover talks are continuing, it has
decided not to pay a final dividend.
It said it remains the company's intention to pursue a progressive dividend policy and
distribute as much cash to shareholders as is reasonable in excess of that level required while, at
the same time, maintaining adequate resources by the company to continue growing the business.
It said that, should the offer talks terminate, the board will consider recommending an
immediate special dividend and a further announcement regarding the company's strategy will be
issued at that time.
During the year to April 30 2002 turnover increased by 14.1 pct to 15.4 mln stg from 13.5 mln
and operating profit rose to 4.2 mln from 3.4 mln.
Earnings per share increased from 1.56 pence in 2001 to 1.94 pence in 2002, a rise of 24.4
pct.
In the year under review, the Britannia / Dynasty range was "very well accepted". Majestic and
Morice have still to progress to the level of sales expected and the board said it is reviewing the
opportunities for these brands in the UK market.
During this financial period a venture was formed with Waterford Stanley. This agreement has
had a limited impact on the company's profitability during the period under review, but the board
said it remains confident that given time, this arrangement will increasingly add to profitability.

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