Arla Foods Uk Share Discussion Threads

[quepassa] 27/11/2006 20:23

Hi Gerry. Very interesting. Suggests to me that investors have built stakes ahead of the expected finalisation of talks and the take-over happenning. How do you interpret this relative lack of liquidity from Arla amba's point-of-view?

[gerry321] 27/11/2006 18:20

Barclays 14894164 2.43
Amvescap 102811315 16.8
Axa 6355553 1.04
HBOS 12317635 2.01
sharescheme 99836
ExpressDaires 2426981 0.4
Milkpartnership 30480000 5

ie 27.7% of free market shares now locked up leaving 22,7% or 139m theoretically in circulation............this ignores holdings by nominees just below the 1% level bound to be 30m to 40m of those given its a one way street

[tomgooder] 27/11/2006 10:15

Totally stupid comment but...
I wish they would hurry up

[gerry321] 24/11/2006 22:35

damofarl
By keeping holding below 3% the nominee can avoid being named in an RNS

[damofarl] 24/11/2006 17:04

gerry, i can't be more precise than that 72! My guess is only as good as yours of course..do we know the names of the nominee companies?

[gerry321] 24/11/2006 16:47

Lots of trades today...........with approx 22m shares changing hands since the bid date of 20 oct mostly ie into people who will hold
...the "free" market must be down to well under 100m shares by now

..the market volume ought to shrink to below 100000/day next week

Todays big trades could well be nominee to nominee to enable them to remain submerged below 3%
Cant figure why the little guys are selling unless they think the bid share price will not happen or be under 70p..........hope they`re wrong......funds are in no doubt

[gerry321] 24/11/2006 13:53

Damofarl
did you realy mean MORE than 72.....and not LESS than 72?

[damofarl] 24/11/2006 09:01

Gerry, imho they are not going to pay more than 72 being the sp's 12 month high plus a divi sweetener, but then i fail to see amba as logical....why didn't they make a move 3 months ago when share price was mid 40's?

[gerry321] 24/11/2006 08:45

Damofarl
thanks for interesting info......Whats your take on the bid share price ?

[quepassa] 24/11/2006 07:37

Damofarl, Thanks a lot for excellent feedback. Very unteresting. Well, with the employee holding, they would be clearly over 75% . Like you, still positive. QP

[damofarl] 24/11/2006 01:39

Qp, i think the employees holding, excluding execs is abot 3.9% D

[damofarl] 24/11/2006 01:20

QP/Gerry, i'm inclined to read 'arla amba...reserve their position' is less to do with paying divis and more to do with takeover; to be frank the discussion on getting ARU exclusive/inclusive of divi payment is not consequential at all, and if it was so, amba get/lose 51% of the payout anyway...i do think your thoughts on dividend date/agm date are telling, but not for financial (i.e.cost of payinr dividend), and your comments are interesting and thought provoking (keep the analysis up!).

With regard to getting the 75/95% quickly, the holdings you detail added to the employyees stake (not sure of exact % but if requested could makea good guestimate of) well exceed the (minimum) required 75%. It should be noted that the employees' stake is ALL held in nominee a/c's so approval is a nod and a wink; so far as AFMP's share is concerned they have no special veto, and hold only the rights that ordinary shareholders have; that said, they have publicly voiced their support for an 'amba cooperative' and the nature of their 7 year rolling supply contracts, and the fact that they supply 85% of ARU's milk, means effectively that they could take the money and still be guaranteed their buisness...a no brainer i feel...that is why Amvescap is topping up, you shouldn't sell, and possibly should top up. D

[gerry321] 23/11/2006 20:32

Que
Amba "reserving their position" to me means that the payment of an early divi should be viewed by the 49% as a concession made to them during the ongoing negotiations involving amba arla and the funds........ Otherwise an implied threat to delay the divi doesnt make sense........

[quepassa] 23/11/2006 20:21

Agreed. My instinct is that Arla amba want to get the deal "done and dusted" by year-end. I don't know if the Milk Partnership would need to ballot. I remember that a heplful poster once noted that the Milk Partnership were in favour of a potential full tie-up with Arla.

But my goodness, they are leaving it late if this is the case. That's why I think that things will now move very quickly.

I'm slightly on thin ice when it comes to the Take-over Code but they would need 90% acceptances to go unconditional on an Open Offer I believe. Potentially this is possible by year-end even on a very tight timetable with a recommended offer. If they get 75%, I believe ( not sure here) that they can go unconditional by way of a Scheme of Arrangement. How could they get 75% quickly? Fairly easily. They own 51%, Amvescap has 16.8%, Milk Partnership 5.29% - which totals 73%.

You may have caught the sting in the tail about the dividend..... " Arla amba have informed the Board that they reserve their position as regards their voting intention in the event that a recommended offer for the outstanding 49% of shares not held by arla amba has not been made prior to the meeting". That is, they won't necessarily vote in favour of the divi if they don't get the Board to agree a recommended offer.

It shows that they are really serious.

[gerry321] 23/11/2006 19:17

Que
As an afterthought
Can the mgt of Milk Partnership decide off their own bat to accept a bid or do they have to ballot their members with all the delay that that could cause ??
If so then for a quick deal perhaps amba really need to secure an agm approval ignoring The Milk Partnership ?

[gerry321] 23/11/2006 19:02

Hi Que

Interesting that no reason has been given for paying a dividend early.

In the current bid situation...
...anything which impacts the deal
and either
helps a lower share price than expected to be more palatable to shareholders
And/or
provides an extra cost benefit to amba at no cost to the arla shareholders
..........is worth doing...
....perhaps bringing forward the divi date falls into this category
But why bring forward a divi date?
The obvious answer is to enable some or all Aru shareholders to receive a divi which they would not receive on the old date
And what would disenfranchise a shareholder from receiving a divi on the old date ?
Clearly........ not owning the shares on the old date
How could this happen ?
Well
Either
Owning "voting rights" of the shares is "temporary" and does not include owning the right to a divi on the old date...........these shareholders receive no benefit from bringing forward a divi date but have rights to vote for the takeover and negotiated an early divi date as a sweetener for the real owners who may have a 31 Dec year end
Or
Owning "voting rights of the shares is "permanent" but the shares will have changed hands (ie to amba) before the old date came around in jan
and hence the "lost" divi needs to be added to the bid sp
which
may cause a disadvantage to the buyer at no cost to the seller
or cause a disadvantage to the seller at no cost to the buyer
What can be deduced therefore ??
1 There is an advantage to one of the parties in bringing forward the divi date and hence the decision has probably been done as part of the negotiations
Also
2 The release of the accts could not happen before 23 Nov hence some of the numbers in these accts being disclosed to the funds for the first time could be relevant to securing their agreement
...........for sure the deal is going ahead...
My hunch is that a determined effort is being made to reach a deal quickly with an egm targeted for Dec
.....hope this helps

[gerry321] 23/11/2006 11:19

Given the length of time arla and amba have been together the amba accts must know exactly how much they value aru ........since they are at head office they will know all the extra transfer pricing and tax dodges they could exploit more fully with 100% of the business........

So why no decision today ??

The funds may be playing hardball on the sale share price ....... and have rejected ambas valuation deferring a decsion until more data is available

with results now out in the open the funds can now do their own sums on the latest aru accts.........which enables them to assess what a reasonable sale share price would be.......

[quepassa] 23/11/2006 07:26

Merger talks progressing............

The relevant extract from to-day's annual announcements


"Possible offer from Arla Foods amba

We announced on 20 October 2006 that the Boards of Arla Foods UK plc and Arla
Foods amba were in discussions, which migt or might not lead to a recommended
cash offer being made for the 49 per cent of the share capital of Arla Foods UK
plc not already owned by Arla Foods amba. Whilst discussions are progressing,
there is no certainty that an offer will be forthcoming. A further announcement will be made in due course."

[quepassa] 22/11/2006 22:52

Interesting.

In the past, the Arla amba website was an incredible mine of information. Extensive details about their strategy, mission and how they were going to implement/ achieve these. Copies of internal management presentations, detailed organograms, international expansion plans, and much more.

This has now all been removed in toto and the website has been completely sanitised and sterilised.

One wonders why they have recently done this. Surely changes afoot.

[gerry321] 22/11/2006 22:46

Que
The amba board would look absolute idiots if they failed to reach a deal with Directors over whom they have the power to hire and fire...........I cant see anything other than options 3 or 4............
Final thought
If the ultimate aim is a Uk coop surely arla need to give their Uk coop shareholders a decent buy out share price ans it is nneded to enable their members to buy back in again after the takeover...........??

[quepassa] 22/11/2006 21:05

Fingers crossed for to-morrow.

I see four possibilities about an update to-morrow on the merger talks. I would be astounded if either of the first two happenned. My expectation is possible 3, likely 4.

1. Announcement that merger talks called off
2. No reference whatsoever to merger talks.
3. Announcement that merger talks are on-going with further announcements in due course.
4. Announcement of agreement-in-principle on terms/ Board recommendation to share-holders.

The shares did already rally by 50% + from around 42p to 67p between October and now.

We should also remember and draw some comfort from the words of Peder Tuborg, CEO.

"All I can say is that our approach is a natural development from the merger in 2003 between Arla Foods plc and Express Dairies. We are now in talks with our British subsidiary about a possible bid for the remainder of the shares. We will make further announcements in due course", comments Arla Foods amba's CEO Peder Tuborgh.

QP

[topsy turvy] 22/11/2006 18:36

We'll have to see what breakfast brings tomorrow morning, but there doesn't exactly seem to be a rush to buy the shares before a possible takeout announcement! Virtually flatlining for a month. Hope we haven't been pinning too much faith in this.

[gerry321] 22/11/2006 18:31

Amvescap plc have upped their holding by a modest 35000 shar at 66.5p
They sure aint buying at 66.5p to sell at a loss............

[peaeff] 20/11/2006 23:06

Gerry

Much obliged for your reply. Will give it further thought.

Regards PF