Premier Farnell Share Discussion Threads

[typo56] 04/10/2016 16:49

In case you're wondering about the large uncrossing volume tonight, PFL are promoted to the FTSE 250 tomorrow.

[geminian] 23/8/2016 18:01

For what good it will do, I am voting against the sale for my small holding. My thoughts are that the Executive and management team(s) firstly made an error with the Farnell Electronics Plc/Premier tie up and have not done enough to bring it back around since, yet still awarding themselves huge remuneration packages.

I feel that the current Executive and management team are only doing what is best for them and their pockets. Could be completely wrong?

[drectly] 28/7/2016 21:24

sold at 165 and the market up a bit since then, but well done those that held

[zcaprd7] 28/7/2016 20:27

Bidding war. Ffs

[deans] 28/7/2016 08:12

That's a nice surprise at moment holding on looks the right decision although the market is up since the first offer.

[zcaprd7] 25/7/2016 12:10

Looked like there was an arbitrage opportunity this morning?

[zcaprd7] 27/6/2016 16:07

Sold. Can't see another bid!

[zcaprd7] 21/6/2016 14:54

Just a thought, quite a safe place to hold cash for Friday? No down side, and potential upside of another bid. Can always sell if some bargains catch your eye as well...

[zcaprd7] 20/6/2016 14:30

Well I'm holding steady, I presume any other potential suitors will hold off until the brexit vote is dealt with...

[cc2014] 17/6/2016 13:04

These speculators still buying and the volume is sellers is drying up. I am interested to see if the price gets moved up as we head into the weekend

[zcaprd7] 16/6/2016 16:50

Ah yes. Of course... Must be speculators?

[redartbmud] 16/6/2016 07:44

Deans

Correct.

[deans] 16/6/2016 07:21

Z7 I don't think the acquirer can pay more than 165p unless offer same to all shareholders. IMO

[cc2014] 15/6/2016 22:05

I think things will become apparent over the next couple of days. I find it interesting that the price moved up exactly at the same time as the afternoon RNS information. I wonder the big boys understand relationships in a way I don't.

I'll put it this way. If I can get RBS at 200 or HSBA at 415, or something of a similar stupid price then I'm switching.

[ayl30] 15/6/2016 20:35

I took the money yesterday

[cc2014] 15/6/2016 20:01

Both Millenium and Elliott seem to be competing to buy stock at 1.64.

I do not know what to do. Take £1.655 or wait.

[zcaprd7] 15/6/2016 18:45

I'd take 190p in ecm shares, maybe a mix of shares and cash?

[deans] 15/6/2016 16:04

Are shorters having to close above the bid price?

[zcaprd7] 15/6/2016 15:58

Hmm. I suppose they could soak them up to 173 to protect themselves from a second bidder?

[cc2014] 15/6/2016 13:03

The share price hit 166.0 for a while this morning a penny above the bid price. Interesting.

Lots of trades are still going through at 164.5/164.75 which is higher than you would normally expect in this situation unless Datwyler is soaking them up.

[josephrobert] 14/6/2016 19:40

Olivetree’s deal summary from FT Alphaville:

Given the presence of activists on the register, and the general underperformance of Premier Farnell stock, the market has often speculated as to a creative outcome for the company. One of the more popular ideas in the last couple of years has been a merger with Electrocomponents (ECM LN). The latter established a new management team only last year, replacing a previous CEO who had run the company for 13 years, so there was hope that such developments could lubricate such a transaction. There were also calls for a break up of Premier Farnell, the pressure was to sell its Akron Brass fire-fighting subsidiary, perceived to be a poor fit with the larger electronics business. This sale was eventually announced in September last year and the details of the sale were confirmed in February 2016. Hence the next step for activists was likely to be consolidation with another industry player – something we are now seeing today.

Datwyler has secured irrevocables from 18.5% of Premier Farnell’s register, from JO Hambro, Majedie and (activist) GO Investment Partners. These irrevocables generally release in the event of an offer from a third party that is only 5% better than the Datwyler offer (ie 173.25p).

It is worth noting that Electrocomponents equity rating continues to look powerful relative to that of Premier Farnell, so a potential merger could continue to make sense. Rumours of such a transaction have never been far from the market, as recently as 9th October 2015 the press reported such speculation. The perception was generally that GO had taken its stake, post two profit warnings from Premier Farnell, in order to engineer such a tie-up. The industry backdrop continues to appear ripe for consolidation, so such a transaction cannot be entirely ruled out, especially given that Datwyler’s irrevocables are released so easily. With a current market cap of £1.2bn, Electrocomponents is much larger than Premier Farnell, although it is still smaller than Datwyler’s £1.7bn market cap. Electrocomponents217; equity currently trades on some 10.8x EV/EBITDA, compared with Premier’s 6.5x, so it does have a powerful acquisition currency, both on a relative and absolute basis:


RBC from FT Alphaville

Our view: The 165p cash offer compares well with our previous 155p
target and given weak trading, historic issues, management change and
gross margin pressures, we feel this is a good price, although wouldn’t
rule out a counterbid. We downgrade to Sector Perform and increase our
target to 165p in line with the bid from Daetwyler.


Key points:
Recommended cash offer – Daetwyler has made a recommended cash
offer at a 51% premium to last night’s close of 165p per share, which
values the group at £792m. This compares to our prior DCF target price
of 155p and equates to a calendar 2016E PE of 16x and EV/EBITA of 12x.
Shareholders will also receive the 3.6p final dividend payable on 23 June.
Management believes it can extract CHF50-70m (£37-51m) synergies from
the deal (50% gross profit and 50% cost).


Decent price – Given weak trading, the history of disappointments,
management change, gross margin pressures, and the cycle – we see
this as a good price. However, the valuation is below that of key peer
Electrocomponents,(2016E PE 20x, EV/EBITDA 16x). The synergy target
is a big number for a business that doesn’t have huge overlap, hence
we would think that the synergy number for one of the closer peers
e.g. Electrocomponents would be larger – indeed we have previously
stated that we think £60m could be achieved by a combination with it,
although the new management team has plenty on its plate with its own
restructuring plans. Mouser and Digikey in the US also have good overlap
and a strong dollar potentially to entice them. As such, despite this being
a good price we wouldn’t rule out a counterbid.


Q1 Trading weak – PFL has also put out a Q1 trading update – LFL growth
was -1.4% down from +0.4% in Q4, with weakness in the UK (-7%) and USA
(-9%) offset by Europe (+4.8%) and Asia (+26%). Cost savings do appear to
be on track and management has initiated some restructuring in the USA.


Downgrade to Sector Perform – Given our view that this is a fair price,
we downgrade to Sector Perform and increase our target price to 165p,
in line with the offer. This compares to our previous DCF derived target
price of 155p.

[deanforester] 14/6/2016 18:55

I have taken the smarties and run, sold out at 164.1 this morning after Bloomberg put out a report.

[kemche] 14/6/2016 16:26

Well that turned out nice :)

[cc2014] 14/6/2016 13:04

Well done Eastbourne. I will taking breakeven at £1.65 but still happy. If the FTSE goes much lower I will sell and stick it on well I could choose anything but RBS, LLOY, HSBA, SL., IRV plus a zillion others look "cheap".

I will hold for a while and see if we get rumours of another bidder. L2 looks well strange