Arla Foods Uk Share Discussion Threads

[gerry321] 20/11/2006 20:02

Peaeff
The half year results are due on 23 nov and will include the interim divi
Its very likely in my view also to include the long awaited announcement on the bid share price ........and indeed the timing of the bid allowed several weeks for "negotiations"
The perceived wisdom on this BB is for a take out share price of around 75p possibly excluding but probably including a 1p divi paid end Jan early Feb
So If you want a quck 8% gain you need to buy pronto

[damofarl] 20/11/2006 10:17

QP,

dairywise, longterm i think Arla and Dairy crest have a march on Wisemans. As a milk proccessor Wman are ruthleslly efficient, but in a commodity product theres not really anywhere to go; Arla and Dc have far more diversified earnings from (branded) products with their spreads and cheeses (higher margins).

With regard to amba takeout, i seem to recall read in some results small print somewhere that whilst ArlaUk make great stall on success/sales of Anchor/Lurpak/feta etc, the way the deal is structured amba receive high 'royalty' payments, which to my mind means the profit from these products iseffectively siphoned out of Arlauk already, so not withstanding the above, Arlauk is also really just a milk proccessor!

[peaeff] 19/11/2006 14:51

QP or any helpful poster

Have some spare funds to invest, preferably on a short term basis be happy to nick 10-12%.

Have researched all I can and read the board and the belief appears to be that a buy out could happen at anytime.

Would appreciate your views on current situation and what you see arriving with results this week.

Regards PF

[gerry321] 18/11/2006 21:37

Que
Re ave
Perhaps there is indeed some room for share price growth if a bid is imminent from somebody
I dug out this old ave post based on research which may be of help

Gerry321 - 17 Nov'05 - 11:45 - 199 of 283 edit

Allowing for the rights issue
The big shareholders Fidelity and Templeton averaged around 65p for their current holdings....
On a similar basis
Dieteren stake cost them around 430m to 500m ie around 80p/share
If current mgt can evidence signs of a turnaround in their 16 Dec statment.......
At 30% bid premium
D`Ieteren definitely won`t sell below 100p
If current mgt don`t evidence signs of a turnaround in their 16 Dec statment.......
D`Ieteren will surely sell at 80p...
Happy Days...imho

[quepassa] 17/11/2006 13:35

For Gerry. Really appreciate your thoughts on AVE. Kind of you to spare time on this when I know that you are not in this stock any more.
I bought in the 50's. Didn't subscribe to rights which I sold for a handsome cah profit as i didn't want to increase exposure to AVE at that time.
There is something going on. The sector is in play at the moment and my instinct tells me that the ownership of AVE will change/evolve soon. Must trawl through Google for any US news. Thanks again.

[quepassa] 17/11/2006 13:31

For Damofarl. thanks for your useful reply on one of my earlier posts. - Good feedback/confirmation from Farmers Weekly that the farming communities would not be opposed to Arla amba.

[gerry321] 17/11/2006 09:46

Heres a thought
Either
1 The arla board are negotiating in secrecy with their Bosses and owners Amba on what share price to recommend to the 49% shareholders of which a large chunk are funds and coop..........which they would like everyone to believe
Or
2 The arla board are negotiating in secrecy only insofar as the PIs are concerned
and are keeping thw big holders posted as they go along..........may be illegal
Or
3 The arla board initially consulted the big holders pre announcement on the potential buy share price ..........reached a deal in principle on an bid share price range and are only going through the motions in secrecy right now.....
.......this is the most likely scenario
What would you do as a big fundholder if 3 was the case ?
........probably buy thru as many nominees as possible up to the minimum share price you reckon will be offered............thats got to be around 72p to 73p allowing for tax etc
So for the PI
Buying more aru up to say 67.5p has got to be great value for an immediate gain albeit a relatively small gain of under 10%........

[damofarl] 17/11/2006 00:31

Que Passa - r.e

The Arla All Employee Share ownership purchased just short of 100,000

The way the share scheme is structured employees buy monthly, and notice to change contributions is 1m+ therefore those still employed won't sell unless they need to pay for a car/holiday etc., and can't stop/start contributions quickly enough to 'play' the market/their opinions.

As they are effectively locked in, their 'buying' at 67.5 is less an indication that they believe there is much higher to go than an acknowledgement that 3 for 2 shares with tax advantages is a bonus in low skill/low pay jobs.

As regards 'trading on inside knowledge' their is nothing in the share ownership scheme rules mentioning/highlighting this and most employees wouldn't understand the concept/legal ramifications of such.

Personally i do feel their is upside but only of the 10-15% margin, amba will buy it (and soon), and results/trading will be in-line+1

Interesting to note views on Farmers Weekly website, to the affect that farmers, (who through AFMP hold a vested [share]interest), would be happy for amba to take ARU out as they believe as a 'copperative' amba would be a better purchaser of their milk than Arla.



On the contrary, the Employee Scheme buying shares at 67.5p - whilst they clearly cannot be trading on inside knowledge - may have a pretty good feeling about a positive outcome for the merger talks and this might lead you to believe that they feel there is significant upside to the shares beyond 67.5p.

[gerry321] 16/11/2006 21:13

Que
I got out of ave at 63p( up20%) after a roller coaster where I was down 20% at one point.....
The ave share price has risen 20 % since 2 Nov while the Avis Inc share price has only risen around 7%
I cant figure why avis inc hasnt jumped which it ought to do since both ave and avis inc would be targeted by Hertz type venture capitalists.....
Conclusion
May not be linked to an ave/avis inc linkup and buyout
I reckon something else may be afoot which is pleasing to some new fundholders but not to some existing fundholders.......watch for an RNS
I would not buy as I reckon the 20% rise to 75p is eqivalent to around 100p in pre rights money and at that share price the premium for whatever is afoot is probably mostly built in already
Hope this helps

[quepassa] 16/11/2006 16:20

For Gerry,
Whilst we wait for the Arla annual announcement on 23rd., have you seen the recent movements in our old friend AVE? -The Vanguard/Europcar merger and Hertz IPO certainly have lit a fuse. Some vague rumours of stake-building? The log-awaited reunion of Avis Inc and Avis Europe perhaps? Any views please? Thanks QP

[quepassa] 14/11/2006 18:25

Closed at 67.5p bid to-day, after reaching 68p bid for an hour or so earlier in the session.

[quepassa] 14/11/2006 12:55

I think you are right about this......


Amvescap still buying, now up to 16.8%.

[gerry321] 13/11/2006 21:58

Just a thought
But if the final results reflect better trading in the second half ........as we expect with higher milk prices and lower energy costs........The Arla Board despite their heavy amba representation would find it difficult to recommend shareholders sell at anything less than a 10 to 15% premium to the current sp
ie 75p to 80p...........
Although there may be a tax advantage to amba to structure the selling price as a combination of share price and extraordinary dividend...........

[gerry321] 10/11/2006 19:39

Thanks Que

[quepassa] 10/11/2006 07:32

My belief and expectation is that we will get a full update in two weeks time on merger talks ( and hopefully Board recommendation to shareholders ! ) on the 23rd November which is Arla UK's date for Annual Full Year Results announcement.

The Financial calendar for Arla UK is:-


Half-year end 31 March 2006

Announcement of interim results 25 May 2006

Ex-dividend date 28 June 2006

Record date 30 June 2006

Dividend payment date 25 August 2006

Pre-close trading update for year end 27 September 2006
Financial year-end 30 September 2006

Announcement of final results 23 November 2006

Annual general meeting End of January 2007

[gerry321] 09/11/2006 21:09

Does anyone know when we may here the result of the negotiations between ARU and Amba on the share price for the residual 49% ??

[gerry321] 08/11/2006 22:14

Thanks Que for that info ....
....reinforces my gut feeel that buying at 67p is still godd for 10% at least.........

[quepassa] 08/11/2006 15:01

Two very significant news/RNS announcements to-day:-

1. Amvescap are still buying more shares. Another 100,000 taking their share-holding from 16.6% to 16.75%.

- They seem to mop up even small amounts whenever there is softness in the price.


2. The Arla All Employee Share ownership Plan announced to-day that it had exercised certain rights and purchased just short of 100,000 shares on 3rd. November at 67.5p per share. For each 2 shares purchased, they received one free.


There was no corresponding announcement that all or any of the shares had been sold upon exercise which is what you frequently see - especially if the employees see no immediate upside to the shares.

On the contrary, the Employee Scheme buying shares at 67.5p - whilst they clearly cannot be trading on inside knowledge - may have a pretty good feeling about a positive outcome for the merger talks and this might lead you to believe that they feel there is significant upside to the shares beyond 67.5p.

All IMHO. DYOR

[gerry321] 07/11/2006 16:49

tiredoldbroker
" They could be buyers at 66.5p, looking to accept an offer at 71p, for example. .........."

Thats me your`e talking about

..I just topped up again today

[tiredoldbroker] 03/11/2006 19:47

I'm not sure how much meaning to attach to Amvescap's dealings in ARU shares - after all, on 26 July 2006, they sold 203,665 shares and I think that was around the recent low point of maybe 47p. I wouldn't take that to mean that Amvescap were then prepared to sell ARU out at 47p to a bidder, if there had been one.

It is also worth remembering that Amvescap, in previous announcements, have made it clear they don't hold any of their ARU shares beneficially; they are all on behalf of investment clients for whom they provide management services. So it is always possible that clients have said to Amvescap either that they'd like to sell their ARU shares (back in July) or would like to buy more now. From my own experience, I can tell you that even discretionary clients often tell the manager to buy or sell something.

There could also be accounts under Amvescap's management which specialise in taking positions in stocks subject to probable cash takeover offers, which could be attracted by netting out a possible 6% cash profit in maybe 6 weeks, and being able to take similar positions in several cash takeovers every year, one after the other. They could be buyers at 66.5p, looking to accept an offer at 71p, for example. We just don't know for sure what is behind Amvescap's dealings.

[hvs] 03/11/2006 18:41

I will take 70p and say thank you very much.

[quepassa] 03/11/2006 12:44

for PTGInt:-

The company website (www.arlafoods.co.uk. > investor relations > major shareholders ) shows to-day that Invesco/Perpetual own 16.01 %.

Yesterdays AFX announces that Amvescap now own 16.63%.

Amvescap own Invesco/Perpetual. They are the same.

I believe it is just because the Arla website is not yet fully updated.

Based on these facts, yes Amvescap have increased their holdng by 0.62% (or put another way by 2% of the free-float/shares we assume are not already tied up.)

[ptgint] 03/11/2006 12:16

Interesting to see these recent discussion points. I initially agreed with tiredoldbroker's analysis of the situation and agreed the institutions would tend to ignore the past costs and concentrate on the future expected profit and growth (or lack of !), but what has thrown a spanner into this thinking is why they would be in the market buying at current prices (if this is correct).The only logical answer is to strenthen their negotiating position and hence a price of 75/80 would seem a reasonable objective for them. However this assumes it is the same institutions who already are shareholders buying more stock.

[gerry321] 01/11/2006 22:04

tiredoldbroker
Your analysis is spot on from an acctng standpoint..I cant argue with it
However it will not be accountants who do this deal ...more likely to be guys with a general mgt background who can judge the Amba bottom line better from a strategic standpoint

this is not about how much the funds need to sell at
..........as about how much amba are prepared to buy at.......
No doubt like me you want the highest share price possible ............


We shall see

[tiredoldbroker] 01/11/2006 17:36

You know, I quite like ARU as a trading stock and have done some nice trades over the years, but I have to tell you that I'm not convinced it is a real growth story - I can see that Arla in Scandinavia likes to have a major market for Lurpak safely in their control, and will happily marry the distribution of other products to that. But institutions won't consider what they've paid for ARU shares in the past, or Express Dairies shares in the distant past, and expect that price back with interest.

If that was their policy, they'd just put money on deposit. Shares don't work like a savings account, so I don't go along with Gerry321's idea that "Surely the take out share price must reflect what the major funds paid for their holding and the profit + interest they believe they are due". They'll look at the share price over the last year or two at most, and the profit record (which is patchy), and the forecasts of future profits from brokers and their in-house analysts. Then they'll decide what sort of exit p/e on coming earnings makes sense to them, and I reckon they'll feel that a prospective p/e of 14 is pretty much top whack for a company with a record like ARU's. You can buy a stock will genuine growth prospects cheaper than that.

Another £30m on the exit price is equivalent to them giving away another full year's profits after tax, and I think they'll feel that is too much cream on top of a pint of at best semi-skimmed.