Accrol Share Discussion Threads

[darrin1471] 17/4/2024 12:24

Court Meeting and the General Meeting on 15 May 2024
Year end trading update was May 16th last year.
It appears unlikely we are going to get any more trading updates before the sale.



The Offer represents an EV/EBITDA multiple of "9.9x using Accrol LTM (last twelve months) adjusted EBITDA of £18.7 million for the period ended 31 October 2023."

However the last trading update said:
"The Group is firmly on track to deliver FY24 results in line with the Board's expectations and, following the acquisition of Severn Delta Limited ("Severn Delta"), now expects to outperform its previous expectations for FY25."
"Market expectations (Shore Capital & Zeus) as at 29 January 2024 for FY24 and FY25 respectively - Revenue £205.0m EBITDA £21.0m and Revenue £211.1m EBITDA £21.9m."

Thats a EV/EBITDA multiple of 8.8x using the current years figures

[darrin1471] 17/4/2024 12:06

Metsä plans tissue paper mill in Goole. " the capacity to produce 240,000 tons of tissue paper, built in several phases over the next decade"





There was also talk on this thread a year ago about a planned mill in North Wales.

These projects take years and it was only a few months ago management were saying ACRL were highly cash generative after the investment.

[keyno] 17/4/2024 11:10

Another way of management saying, we don't think we're up to the challenge so we'll just take the money and run........

[arbus5000] 17/4/2024 10:57

funny enough, the "turks are coming" was also a headline in the run up to the brexit referendum. They should have also mentioned the risk of the Tejani's making a comeback in leicster!

I've read through the offer circular, perused the micro-site and have decided that there are no compelling reasons to to vote in favour for this deal.

[darrin1471] 17/4/2024 10:47

Management explanation for low price.
"However, the supply dynamics in the UK are set to change. Multiple European and Turkish tissue suppliers have indicated and commenced investments to expand their operations in the UK by investing in brand new, state-of-the-art tissue making and converting facilities in the coming years (circa. 500kt of tissue paper reels). It is anticipated that this will make the UK market significantly more competitive and has the potential to disrupt volume growth and margin stability as new entrants seek to establish a foothold in market share."

[this_is_me] 17/4/2024 07:43

There is a very serious chance that they will not get the 75% they need. Those who have been buying at almost 40p will be looking for a good profit before they agree to any offer and most long term holders are not impressed by 38p. It looks like the expense of continuing is just going to be money money down the drain.

[markdallara] 16/4/2024 13:16

No one is worrying here.For me it is just a question of how big the big haircut is going to be. Yep, maybe the atractions of being smaller fish in a bigger pond is more attractive to the management than being in charge of their own destiny. Different strokes for different folks.

[darrin1471] 16/4/2024 08:49

"Something happened" has been a concern for me.
That "something happened" is unlikely to be a long term fundamental downturn. I have taken a tour of the supermarkets and discounters and see toilet paper on offer and reduced in price. For example Aldi 12 double rolls have been reduced from 6.99 to 4.99 for the last month. Does that indicate lower prices paid to ACRL or sales volume moving towards the competition.
At the same time kraft pulp prices appear to be moving up over the last year. Plus 25% from their lows.

I am still very overweight ACRL and I would be thinking of reducing my exposure on the evidence of shop prices and pulp prices going in opposite directions. As Navigator have been in discussions since early January and are an integral part of the industry, then they will know the full facts and reasons. Navigator could even be selling volume into the UK at a loss to depress the UK market.
What has stopped me considering reducing ACRL is the current share price is above the offer with 24% of ACRL stock now being held by new opportunistic shareholders and 20% being held by existing shareholders when there has been a chance to sell above the offer price.

[scemer] 15/4/2024 22:03

Markdallara something has definitely happened the towel has been thrown in

[darrin1471] 12/4/2024 13:06

I agree. Undervalued and likely to attract a higher offer. I don't think it will be a much higher offer unless there are two bidders. If ACRL were at 60p today I would be happy to continue holding in anticipation of the mill and bolt on acquisitions.
The fact that 25% of ACRL stock has moved from existing shareholders to new shareholders at a couple of pence above the cash bid price shows existing shareholders are uncertain of the outcome and hedging their bets.

[arbus5000] 12/4/2024 12:25

i'd buy into any blood bath, the shares would be doing quite nicely right now if this takeover sideshow hadn't occured. Even the French banking mutual society thinks this company is undervalued, and i agree with them !

[miti 1000] 12/4/2024 12:08

Why would they walk away ? Market cap of Navigator is about 10-15 times that of accrol so its peanuts for them. They are in same sector and can clearly pay more. Or perhaps someone else will join the bidding.

[darrin1471] 11/4/2024 17:31

Trading volumes are down significantly over the last 3 days.

By my calculations there are now 7 new declared holdings who have bought at an average above 38p and they now hold about 23%.
Lombard Odier and the board hold 34%
The other declared holders who have been reducing now hold about 22%

If Navigator walk away there will be a bloodbath as ACRL have 23% held by institutions who have bought expecting a higher bid.

[darrin1471] 11/4/2024 10:27

75% would make sense as 75% of those voting are required at the general meeting to delist from AIM and Navigator would require 90% of all issued shares to compulsory purchase the remaining 10%

[superbobo] 11/4/2024 10:03

I also read at a broker report that 75% is required. The alternative read could be that a majority is required if at least 75% of the share capital votes. Often many companies with large retail holdings have missing votes. I hope it’s the former. The fact that merger arb funds are vying would imply that 75% is required

[arbus5000] 11/4/2024 09:44

i read it as 75% acceptance required, i.e. that 75% is considered a majority..?

[darrin1471] 11/4/2024 09:38

Offer RNS:
"the approval by a majority in number of Accrol Shareholders present, entitled to vote and voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Accrol Shares voted"

I initially read this as 25% could block the takeover.
Now I am unsure.
Is it saying a simple majority is required at the vote and the total of those voting should equal 75% of shares?

[deanowls] 11/4/2024 09:01

What happens there? Do they raise or pull out?

[this_is_me] 11/4/2024 08:24

Anyone who bought above 39p will not accept 38p so I don't see how the offer can get over 75% acceptances.

[patrickevershed] 10/4/2024 14:54

The price of pulp,has fall by 30% ? This will give a bag boost to Accrol's profits. Profits should now be well ahead of all the existing profit forecast. I think the shares are now worth between 45 and 50. I won't accept any offer below 45....Patrick Evershed

[patrickevershed] 10/4/2024 12:54

The price of pulp has fallen sharply. This makes the shares worth between 45 and 50 euros. Patrick

[darrin1471] 04/4/2024 15:13

foxman14. ACRL will know the rules better than I do.
If ACRL had disclosed they were in talks, then I am in no doubt that the share price would have been a lot higher than it is today.
Knowing they were in talks in early January, I will go back and listen to the webcast again.

[foxman14] 04/4/2024 11:25

darrin1471 in your view does this mean they were at liberty to tell the market they were talking to potential suitors in the half year end report?