Shearwater Share Discussion Threads

[1nf3rn0] 28/6/2010 21:04

Goddammit! Got stopped out of this one on the drop back through £1 a couple of months ago. What a missed opportunity. Congrats to all holders though - nice little earner for you!

[indomie] 28/6/2010 19:49

Surely URS considered this possibility? £2.10 was never going to be enough to win this contest with so much other interest in the firm....have they bought stock? if not, it is going to cost them now!

My guess now is that either CH2M will win this at £2.45 or URS will have to up its bid to £2.70 or £2.80 and get some of the big institutions on board (and perhaps even CH2M).

[25babies] 28/6/2010 17:18

Time to draw breath.

If URS are to counter, they will need to find another £25m plus - it was a cash offer at 210p.

I suspect that they will find it otherwise a lot of egg on their advisers' faces. Also they need to at least try to give CH2M some crumbs for their 245p acquisition and all their hard work. Maybe they will up to 255/260p. My view is this is unlikely to see off CH2M - so we could be heading towards 275/280p.

Obviously wishful thinking?

[wcjan26] 28/6/2010 16:16

well done all

245p should be a floor- CH2M cannot now offer less. presumably they will also not accept less either.

looking at average exit multiples in the sector, 0.6 to 0.7 * revenue is about typical, so both buyers could still improve their offers

[zangdook] 28/6/2010 16:10

And I my JRVS money.

[25babies] 28/6/2010 16:08

For once I get it right and held on this am.

The terms of the agreement with URS is that they will be able to proceed with the t/o if they match any other bidder. On this basis, I would assume that CH2M may need to burn them off and now having acquired some 14% (I think) of the share cap in the last hour (who is selling?) may need to go a little higher than a 245 bid.

Anyway still staying in as now on a 100% plus bonanza at current levels. At last I get my Jessops money back.

[zangdook] 28/6/2010 16:04

Some more big negotiated trades going through.

[dickbush] 28/6/2010 15:59

Seems unlikely that the price is going below the 245p that CH2M have just paid for their stake.

[hoolers] 28/6/2010 15:55

I'm hovering on the sell button. eeeeek dunno whether to hold or not!!

[foodcritic] 28/6/2010 15:27

That looks more certain now.

[nellie1973] 28/6/2010 12:04

Nice to have two giants beefing it out over this one!

[dickbush] 28/6/2010 11:13

Hi, INDOMIE

You don't have to persuade me that actuarial assumptions re pension funds are total horlicks. You're pushing on an open door there. I've seen three fundamentally different approaches to valuing assets in the past 40 years and the current "mark to market" of what are very long term assets is absolutely ridiculous IMO. It does, however, have the advantage of terrifying large operating companies into moving from internal to external fund management, closing defined benefit schemes in favour of defined contribution schemes which leads to lots of extra income to external fund management groups and lots of extra work for consultants (actuaries) as they fail to perform and the operating company switches fund managers every few years. The merry-go-round gets faster and faster and at each turn the actuaries get a nice fat fee, and the operating company no longer gives a stuff about how the defined contribution pension fund is performing because they have no liability.

Having said all that, the current legislation requires the current crazy valuation approach on defined benefit pension funds, and an expanding deficit requires increased contributions be paid from operating profits. In addition, the deficit on the pension fund today is a real debt of the company today and if you aren't taking it into account in the cost of an acquisition you are a mug.

[indomie] 28/6/2010 09:41

US giants URS and CH2M Hill in Scott Wilson bidding war
28 June, 2010 | By NCE Editorial

US giants URS and CH2M Hill have this morning revealed they are in a bidding war for consultant Scott Wilson.


Scott Wilson has told the London Stock Exchange that it is recommending to its shareholders a buy-out by US consulting giant URS. URS would pay £2.10 per Scott Wilson share, valuing the company at £161M.

But programme management giant CH2M Hill has also told the Stock Exchange that it too has completed a due dilligence assessment of Scott Wilson and is deciding whether to match or improve on URS' offer. It said it "notes" the URS offer and that it will make a further announcement "shortly".

Scott Wilson chairman Geoff French said the board was recommending the URS offer because it represents a "compelling proposition" for shareholders, customers and employees.

"The board of Scott Wilson considers that the Offer, at a price of 210 pence per Scott Wilson Share in cash, provides a compelling opportunity for Scott Wilson Shareholders to realise a significant premium in cash, and reflects the underlying value of Scott Wilson," said French.

"As part of an enlarged and global group, our employees will be able to participate in larger and more complex projects as well as benefit from further investment in new areas of expertise and international markets where Scott Wilson has already established strong foundations.

"In an increasingly global marketplace, the board believes that a combination with URS will significantly enhance Scott Wilson's future prospects and we are excited about our future together," he said.

URS chairman and chief executive Martin Koffel said the takeover was an important step forward in his firm's strategy to expand in the UK infrastructure market and in other key regions around the world. URS believes that the acquisition of Scott Wilson will increase its non-US revenues to approximately 14% of total revenues from the current level of approximately 8%.

"Scott Wilson's market sectors are well aligned with URS's existing focus," said Koffel. "In addition to its strong infrastructure practice, Scott Wilson is well positioned in the environment and natural resources sectors, including the nuclear power market, which is a key area of strength for URS."

Takeover speculation was triggered earlier this month when a large movement in Scott Wilson's share price forced the firm to announce that it had received approaches with regard to a possible acquisition.

Following these approaches, Scott Wilson provided due diligence information to a number of undisclosed parties, including URS.

If no further offers are made, shareholders will be asked to vote on the URS bid on or around 30 July.

[wcjan26] 28/6/2010 09:35

spot1034 - 28 Jun'10 - 08:18 - 1210 of 1222


I think the market has been far too harsh on companies dependent to any extent at all on UK public spending. SWG's exposure to this problem was not as severe as the market was pricing in.

spot1034 - 28 Jun'10 - 08:24 - 1211 of 1222


WSH up a little which is perhaps a reaction to this news, but HYC not moving higher yet. I'd have thought they now look very cheap indeed after this news - perhaps on the radar of one of the rejected suitors here.


==============================================

spot - you and i on the same page here, that's for sure

there are not many of these sort of companies around and many are likely to get taken out

[dickbush] 28/6/2010 09:31

INDOMIE

When SWG got to 340p three years ago, the market was 30% higher. The increase in the pension funds's deficit since then is equivelant to circa 70p. So the current price, adjusted for the pension deficit and the lower level of the market, is actually higher than that peak.

I'm already feeling incredibly thankful, but if another bidder wants to turn this into a bidding war I will be deleriously happy.

[indomie] 28/6/2010 09:19

CH2M HILL do have an advantage in that they are 100% employee owned.

If I was an employee shareholder of Scott Wilson, I'd probably prefer them as you'd share any future profits amongst employees (not external shareholders) and job security may well be better. Having been employee owned until 2006, many SWG people may prefer the values and organisational culture of an employee owned business too.....wont be long before we find out whether URS will bag this unopposed!

[spot1034] 28/6/2010 09:12

CHM2 HILL certainly seem to have been on the ball with the release of their statement. You often don't see that in these circumstances until later in the day so it does suggest they are still seriously considering an offer.

[indomie] 28/6/2010 09:11

How much spare cash does CH2M HILL have?

[25babies] 28/6/2010 09:05

The premium at the moment is only 12p above the offer price -less if you take dealing costs into account. I suspect that CHM2 HILL would have known that they were not the preferred bidders late last week - therefore it suggests that they are seriously considering upping the offer. If that was the case, URS may come in again. Thus I believe the upside opportunity is much greater than the downside.

Hence I am sticking for the moment.

All pure speculation of course.

[indomie] 28/6/2010 08:58

CH2M HILL response will come out 'shortly' which having done due diligence already shouldnt mean too much of a wait. Having done so much work on this firm I'd be amazed if they dont come in with a higher offer, £2.50 should clinch it I'd have thought. These were trading at £3.50 over two years ago and the firm is in better shape now.

SWG's results have seen a doubling of operating profit!

[philo124] 28/6/2010 08:54

Sold out. Well done all! nice £7k profit,
For those hanging on hope you get another 15%.

[spot1034] 28/6/2010 08:49

A further thought on the prospects for a rival bid - there was a report of two US firms in talks which seems to have been exactly right, and that report also said 'several' European firms had been rejected as they were not seen as the right partners for SWG going forward. So one of them could also perhaps be looking at coming in now. This might not be over yet!