Share Name Share Symbol Market Type Share ISIN Share Description
Abacus Group LSE:ABU London Ordinary Share GB0000305796 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 55.50p 0.00p 0.00p - - - 0 06:37:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electronic & Electrical Equipment - - - - 40.82

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Date Time Title Posts
23/6/200908:43The abuse and complaints thread-
19/5/200709:23The Manchester United Trophy Thread12
04/7/200615:07Abacus, Time to start adding up286

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cyberpost: good result... well done to those that bit the bullet and bought.. AVNET has made an offer... 55p cash/share : Offer for Abacus Group plc RNS Number : 5529F Avnet, Inc. 10 October 2008 Not for release, publication or distribution, in whole or in part, in, into or from ANY jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. 10 October 2008 AVNET, INC. RECOMMENDED CASH OFFER FOR ABACUS GROUP PLC Summary * The boards of Avnet, Inc. ("Avnet") and Abacus Group plc ("Abacus") are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Avnet or one of its subsidiaries for the entire issued and to be issued share capital of Abacus (the "Offer"). * Under the terms of the Offer, Abacus Shareholders will be entitled to receive 55.0 pence in cash for each Abacus Share. * The Offer values the entire issued and to be issued share capital of Abacus at approximately £42.2 million. * The Offer represents a premium of approximately: * 115.7 per cent. to the Closing Price of 25.5 pence per Abacus Share on 9 October 2008, being the day before this announcement; * 139.1 per cent. to the Closing Price of 23.0 pence per Abacus Share on 17 September 2008, being the day before Abacus' announcement that it is in talks regarding a potential offer; * 125.4 per cent. to the average daily Closing Price of 24.4 pence per Abacus Share for the three month period before Abacus' announcement that it is in talks regarding a potential offer; and * 45.9 per cent. to the average daily Closing Price of 37.7 pence per Abacus Share for the six month period before Abacus' announcement that it is in talks regarding a potential offer. * The Abacus Directors, who have been so advised by HSBC, consider the terms of the Offer to be fair and reasonable and unanimously recommend that Abacus Shareholders accept the Offer, as the Abacus Directors have irrevocably undertaken to do (or procure to be done) in respect of their own beneficial interests and holdings, being in aggregate 429,410 Abacus Shares, representing approximately 0.57 per cent. of the issued share capital of Abacus. In providing its advice, HSBC has taken into account the commercial assessments of the Abacus Directors. * Avnet has received irrevocable undertakings to accept (or procure the acceptance of) the Offer from the Abacus Directors as well as irrevocable undertakings from certain other Abacus Shareholders, in respect of, in aggregate, 22,240,559 Abacus Shares, representing 30.24 per cent. of the issued share capital of Abacus. The undertakings from the Abacus Directors remain binding in the event of a competing offer being made for Abacus. The undertakings from the Abacus Shareholders (other than the Abacus Directors) remain binding in the absence of a competing bid for a consideration which represents an improvement of 10 per cent. or more in the value of the consideration offered by Avnet. * Avnet is one of the largest distributors of electronic components, computer products and technology services and solutions with more than 300 locations serving more than 70 countries worldwide. The company markets, distributes and optimises the supply-chain and provides design-chain services for the products of the world's leading electronic component suppliers, enterprise computer manufacturers and embedded subsystem providers. Avnet brings a breadth and depth of capabilities, such as maximising inventory efficiency, managing logistics, assembling products and providing engineering design assistance for its approximately 100,000 customers, accelerating their growth through cost-effective, value-added services and solutions. For the fiscal year ended 28 June 2008, Avnet generated revenue of approximately U.S.$18.0 billion. Avnet is a public company listed on the New York Stock Exchange since 1960. * Founded in 1972, Abacus is one of the leading distributors of electronic components in Europe operating through a network of 39 local offices and five warehouses across 10 European countries and an Asian office and warehouse in Hong Kong. The business has developed both through organic growth in its core business of component distribution and through acquisition, which has resulted in an extended geographic presence and more diversified product range. Business activities are broadly split between three operating areas, which are composed of 21 separate trading operations, these being: Abacus Electronic Component Distribution; Abacus Embedded (specialist distribution); and Alpha 3 Manufacturing. Abacus, which is headquartered in Newbury, UK, currently employs approximately 1,000 staff. * The Offer is conditional, amongst other things, on the receipt of EU merger control clearance. Commenting on the Offer, Roy Vallee, Chairman and Chief Executive Officer of Avnet, said: "This acquisition of Abacus represents an excellent complement to our Electronics Marketing group in EMEA. With a respected management team, talented associates and a substantial number of new customers, Abacus provides Avnet with exciting growth opportunities in the region. Our financial strength affords us the opportunity to acquire excellent companies like Abacus despite current conditions in the credit markets." Commenting on the Offer, Anthony Westropp, Chairman of Abacus, said: "The Abacus Directors believe that Abacus' share price has failed for some time to reflect the underlying value of the business. This, coupled with the high level of borrowings, has also frustrated Abacus from pursuing its preferred strategy of expansion through acquisition and acting as consolidator in the sector. Not only does the Avnet offer represent a healthy premium for shareholders, during a period of challenging trading conditions, but there is also a strong strategic business rationale for the acquisition." Banc of America Securities is acting as exclusive financial adviser to Avnet in respect of the Offer. Allen & Overy LLP is acting as legal adviser to Avnet. HSBC is acting as exclusive financial adviser to Abacus in respect of the Offer. Charles Russell LLP is acting as legal adviser to Abacus. This summary should be read in conjunction with the full text of the attached announcement and the appendices.
mt67: " Notwithstanding the current trading environment, the Board of Abacus believes that the Company's share price has failed for some time to reflect the underlying value of the business and now materially undervalues the Company." Why would management accept 25p when the above clearly states they believe the current value materially undervalues the company. Anything above 50p imo still undervalues this company massively as in 1-2 years time the macro environment should be improving along with a higher share price anticipating better times ahead, but bear markets throw up these low valuations for predators to snap up vastly undervalued companies. Of course debt is the concern but i believee ABU will come through and profits will be substantial in the future but i guess we will have to see whether management are negotiating from a position of strengh or if their hand is weak. If the share price is 25p and the mkt believed that to be the price investors/pi's would now be dumping in case the deal doesn't happen...there clearly is upside from much is anyones guess lets hope management obtain a much higher price.
dumbarton2: More institutions dumping I reckon they are getting the jitters on slowing sales and rising euro plus weakness in euroland. This has all the hallmarks of getting into severe financial difficulties and with a poor share price they would have difficulty with a rights issue.
nigelwestm: I thought Abacus was cheap at 89p in July last year, and then the shares fell so I bought some more. The shares kept falling and I just felt they were getting cheaper, so I've bought at various points all the way down to 45p. So now my current holding means I am 'out of the money', as they say, by approximately 4p per share. Meanwhile, I've picked up a dividend payment along the way - so I've almost broken even at the current price. Am I about to sell now just because of MT67 bearish comments? Not on your nelly! I knew the market would eventually see the value here and when the trading statement came out the other day it prompted a long overdue rally. I'm convinced the results will show that things aren't so bad in the electronic components disty market and am fairly confident that we'll see the divi maintained. If the latter does happen then the 75p target that everyone is talking about will come v. quickly. But even if the divi was halved I reckon the current share price would still end up looking cheap over time. Yes, Abacus has a lot of debt, but not in relation to profits and certainly not relative to turnover. And enough cash is being made to both pay down the debt and pay dividends. Meanwhile, official interest rates are coming down on both sides of the Atlantic and this will eventually translate to cuts in the rates that commercial banks lend too. At this stage, I have no concerns. But we'll know for sure when the results come.
like2share: Anyone have any Buy Recs on Abu that they can share... From 'The one analyst offering a 12 month price target expects Abacus Group (ABU:LSE) share price to rise to 200.00 in the next year from the last price of 55.50.' For the past 3 months it is showing rec as BUY.
bletherer: Personally I wish they'd be a bit more forthcoming in their statements - this one says very little, and once again makes reference to the company's expectations rather than market expectations, which I don't like (it's not clear what their own internal expectations are...). But at least there's no warning on profits or sales, so I hope this will help the share price find a base even if it doesn't send it shooting upwards.
bletherer: The last set of results and the AGM statement don't really justify this sort of price action, but the market just doesn't want to know about companies with significant debt with tight credit markets and worries about recession. I'm holding on to what I've got but not wanting to add to my exposure as I've lost enough already on this one and I think there is a risk that they could run into serious trouble in the next 12 months, depending on how bad the economic situation gets in Europe. If they're still up and running a year from now though I think the share price will be up way above current levels. It's what I would call a high-risk, high-reward play at present.
value stock picker: The dividend is now 12% so it concludes me to think has the market got wind of a cut or is this just a consequence of the malaise sweeping the general market. The sell-off has been indiscriminate with share prices obliterated on slowdown concerns across the whole market. The p/e ratio for Sep '07 is likely to be in the region of 5 if management guidance is to believed but of course historic. The FORWARD LOOKING STATEMENT will determine share price direction and it may well be a case of battening down the hatches. Imho if ABU fall further this will prove an exceptional opportunity to accumulate on the cheap looking 2/3 years out hence i will be adding after Tuesday on further weakness.
simon gordon: Hi VSP, I am neither long or short on ABU. As ABU are a highly operationally geared company, any drop in T/O bangs straight to the bottom line. Market Cap = 52m Net Debt = 66m I pre-qualified my 'rights issue' opinion - it is just speculation: but a possibility if Europe goes into recession. Europe is slowing.. The share price is indicating trouble and change - if you know the sector indepth then you can have the conviction to Buy or Sell - I don't, so I'm watching from the sideline. The share price and graph do not lie: they are telling a story!!!
bletherer: Jimi - of course it's always when profitability comes into doubt that debt levels really matter, but though ABU is okay at the moment it clearly does have a material impact on the share price as the risks of declining revenue for an indebted company are much more serious than for a non-indebted one. A company with a surplus can run down its cash or take out a loan to tide it through temporary trading difficulties, whereas a company already saddled with high debt will have trouble getting much more out of the banks and may have to turn to shareholders instead with a rights issue or in really bad cases a debt-for-equity swap. Even if that's not going to happen today or tomorrow the share price is going to factor in a risk premium because there are possibilities of unpleasantness further down the line which are not there (or are a lot further down the line) for a company with similar trading but with a stronger balance sheet. I must admit it's been a mistake I've made more than once to buy into a company on a low P/E thinking "this is ridiculously cheap" only to discover to my cost that relatively small dips in its profitability can spook the market because of its debt levels. Of course the upside to this is that a highly geared company which emerges out the other side from a period of difficult trading is going to shoot up much faster as the market worries less about debt and warms to the low valuation. But it doesn't sound like ABU is going to be in that sweet spot in the near future.
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