Alfred Mcalpine Share Discussion Threads

[mikey34] 20/10/2007 15:44

I hope you`re right,Ed, with regard to a third party.If the CLLN deal comes off at 570 and is75% in shares which are currently reflecting this bid it will initially at least be afairly paltry return for mca holders-especially in view of where they were before the slate problem, and in view of the potential likely to emerge from a demerging of the parts.

It seems a bit incestuous with the large dual holdings.Schroders in particular must find this awkward.

Miami S,

I agree that the break up now is highly unlikely and that it offered no certainty of additional value.If only 570 wins the day though I will be left feeling short-changed.

[ed 123] 20/10/2007 12:37

I'm one of those holding both MCA and CLLN. I'm happy to keep holding both because in my view MCA is virtually certain to be taken over at a price above the current market price. Also, if CLLN get MCA for 570p (assuming the deal doesn't have CLLN below, say, 390p - which is by no means certain) then CLLN holders will get a good deal. If CLLN's shareprice weakens too much then it can't do the deal. If someone else wins MCA, then CLLN should see a relief rally. So, I view it as win/win for me, but only time will tell.

I expect the coming week to see some further expressions of interest in MCA. The major shareholders want to sell it and, so far, the only interested pary is struggling with a largely paper offer. This situation is shouting for venture capital to step forward and I think it highly likely that they will.

Evens odds that 3i will express an interest next week?

[miamisteve] 19/10/2007 20:33

As expected Standard Life have come out in favour of the bid now.

Bearing in mind that it was the major shareholders who had pressed for the review / break up, I don't see how management can ignore.

Read somewhere that 74% of Carrilion shareholders own 52% of MCA, so when you add up the smaller holders Carrilion maybe closer to the finishing line than first suspected.

It all depends on fidelity. They are waiting to see if this offer flushes out any premium bidders. If nothing materialises in the next few weeks then they'll take the Carrilion offer.

There's no guarantee that the break up would produce a sum of the parts premium to the current shareprice.

Seems very little chance imho that the break up will happen. Don't have all that much sympathy with the management. They share price made little progress since the housebuilding sale at the beginning of what turned out to be the greatest house boom in the uk. The proceeds were spent dubiously at times and 5 years on profits are still lower than before the sale. Never got my head round how the slate fraud could have gone so long unnoticed.

[mikey34] 19/10/2007 19:35

Where do we think we are now ?

[miamisteve] 19/10/2007 11:14

My advice Fidelity if you are reading this is do nothing for now.

Wait until the slate sale goes ahead and then make a conditional acceptance at a premium 580p, with the right to withdraw if a 600p+ offer is made by another party.

[miamisteve] 19/10/2007 10:47

New Star have agreed. So it is all down to fidelity now.

[mikey34] 19/10/2007 10:43

miamisteve.

Good analysis.

[miamisteve] 19/10/2007 10:19

And possibly legal & General, which would give CLLN 16.5% (assuming 10% Schroder)in the bag. Fidelity and New Star would take them to around 30% which would be enough to force the issue. I'm guessing 600p. They'll hold out for more, but one way or another I doubt if the demerger will materialise. Either CLLN get it or a new suitor enters the game.

[miamisteve] 19/10/2007 10:10

For CLLN

Schroder - 20.1%
Standard life - 15%
F&C Asset Management - 5.07%
HBOS - 3.91%
Legal & General - 3.63%

So one would assume that Standard Life would also be accepting the 570p offer.

[gbb483] 19/10/2007 09:52

Do you have the figures for CLLN ? According to the MCA announcment Schroder have 20% of CLLN.

[mikey34] 19/10/2007 09:51

Statement just released by MCA is just what I wanted to hear.They expect more and I think they can get more.

[miamisteve] 19/10/2007 09:41

The stock component is too large and it is having a detrimental effect on Carillion share price Anyone else who maybe interested will emerge after slate.

I can't believe that 25 bidders for slate, strong interest in pfi portfolio and only Carillion interested in the rest of the company.

[gbb483] 19/10/2007 09:13

Schroders are also effectively saying "all cash, no CLLN stock".

[ed 123] 19/10/2007 09:06

Good point, Mikey34. I expect Andy Brough will be in discussion with both MCA and CLLN. He may well have given CLLN the green light to make the initial approach.

After a slow start this morning, MCA is firming up. I think this spells the beginning of the end.

MCA ......... RIP

[mikey34] 19/10/2007 08:28

Ed

Yes,interesting.Andy Brough is the fund manager involved and he is pretty shrewd IMO.It`s also interesting that Schroders owns even more of Carillion.

[ed 123] 19/10/2007 07:57

Well, that's come as a surprise to me!

Interesting that Schroders say, "at a value of 570p per share". CLLN may have to issue more shares than planned if they cannot boost their share price.

Also, this tells other parties the price being sought. If this doesn't stimulate more interest, then nothing will.

Next week could bring further news. :-)

[ed 123] 18/10/2007 10:35

Yes, a quiet period is likely now. Once a price has been accepted for the Slate Divsion it will make MCA easier to value.

Apropos the PFI investments, I wonder if MCA are waiting for a UK interest rate cut? If the UK economy shows some signs of weakness and inflation remains under control, the value of these investments may firm a little. That said, they are long term and so less sensitive to short term interest rate movements.

I see BBY picked up Covion today. It's only add-on size but they are always looking and could swallow something much bigger.

Another thought, the Business Services Division of MCA might be of interest to CPI. It would fit nicely with their Capita Symonds Division.

There are many possibilities. :-)

[miamisteve] 18/10/2007 07:58

Carillion will wait to see how the sale of slate progresses before making their next move.

I'd guess the sam esort of 2 week time fame will apply for the final round of the auction.

[miamisteve] 17/10/2007 18:31

Alfred McAlpine slate business sets deadline for first round bids last night, source says
By Alamin Rahman in London
Published: October 17 2007 16:27 | Last updated: October 17 2007 16:27


Please email [e-mail] or call EMEA: + 44 (0)20 7059 6105 Americas: [phone] Asia-Pacific: [phone] for further information on mergermarket and how to receive more articles like the one below.
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The auction for Alfred McAlpine's slate business set a deadline for first round bids for tonight (16 October), according to a source close to the situation.

The source said that the information memorandum for the auction process was sent to some 20-25 players "two and a half weeks ago", and that the first round bid deadline has been earmarked for last night. The sourced added that the memorandum was sent to a healthy mix of trade and financial players.

A McAlpine insider said that memoranda were sent to Alchemy, the Jon Moulton led buy-out firm; Imerys, the listed French materials company; US-based trade player, Evergreen Slate; and UK-based Ennstone, among others.

The same source said that the process is outlined to be a traditional two-stage auction process, and is expected to be completed by the end of the year. He also said that the asset is expected to fetch some GBP 30-40m through the process (on the basis of a 6-8x EBITDA multiple). The insider said that a successful auction process may push the price of the target up to GBP 50m.

Alfred McAlpine yesterday rejected yesterday's 570p takeover offer from its UK counterpart Carillion. The board of McAlpine believed that this offer materially undervalued the company and therefore did not progress discussions with Carillion, the company said.

A spokesperson for McAlpine said that the sale of the slate business is proceeding well, with a substantial level of interest from both trade and financial players.

[ed 123] 17/10/2007 13:07

Interesting comment, miamisteve.

Yes, CLLN may wait a bit (2 weeks?) to see their shareprice stabilize and to see whether anyone else makes an approach. A cash offeror would be in a strong position. BBY could do it with a little borrowing and no dilution.

If there's no other offer and CLLN recovers to say 415-ish, then a bid of 625p, with CLLN subsequently dropping to, say, 400p might do it?

Lots of speculation, and fortunately all three companies are trading well, so, whatever the outcome, it's likely to be good for shareholders, imho.

[miamisteve] 17/10/2007 12:36

Just made a quick calculation on the 2 offers.

Based on the closing price prior to the offers the August offer (560p carillion share price 385p) constituted 10 million more shares and 3 million less cash then yesterdays offer (570p carillion share price 420p) . First offer around 35m gbp net more than yesterdays offer.

There is no way that Carillion would've expected yesterdays offer to have been accepted. My belief is that they wanted the news out and to establish a currency for their shares for a further bid.

They have stated that they won't go hostel, so presumably they have been given some sort of idea of at what price the deal could be put to bed.

It goes down to the view of the majority shareholders who seem to be looking for 600p.

[ed 123] 17/10/2007 11:37

Mikey34, very much agree that the Board want significantly more than was offered.

Set in context, though, the Board will no doubt be mindful of their own futures, in addition to shareholder value, and would want the demerger to be executed. The shareholders, however, are simply seeking best value from their holdings. Interestingly, 2005 to 2007 (pre-slate fiasco) the chart shows a strong positive performance. With that in mind, shorn of the Slate Division and with the resultant improved sentiment, a year on from the revelation of fraud, the market could well rate the three parts plus Slate proceeds at about the 600p mark from which it fell. That is to say, in six months or so from now, the two independent parts of MCA plus the cash from the Slate and PFI parts could add up to 600p, without accepting a bid.

Long term MCA holders have had a bumpy ride since the sale of the House Building Division and may be prepared to throw in the towel for a certain 600p cash. I suspect that the recent, speculative shareholders would find that acceptable, too.

As ever, time will tell. Whichever way it goes, my guess is that there should be another 50p, or so, onto the shareprice over the next six months.

[mikey34] 17/10/2007 10:45

Ed,

When you read what MCA said yesterday re the improved position and progress on the demerger you get the impression that the board feel this is a lot less than they would accept.

[ed 123] 17/10/2007 10:19

Even 570p in cash would not be enough, imho.

Climbing nicely this morning. Possibly owes something to press mention that one of MCA's bigger shareholders would not accept less than 600p.

This is a great opportunity for someone to buy all or part of MCA. Further expressions of interest should come soon, imho.