Arla Foods Uk Share Discussion Threads

[royaloak] 14/1/2007 22:43

71p per share offer on the way in the morning apparently?????

[damofarl] 11/1/2007 12:38

gerry, i'd like to agree with you but my gut feeling is the price is set; with their holding they can massage any figures/trading update to be less good than reality, and hence, watchers like you/me/brokers would be less likely to chase it up; if the timescale your talking is4 months+ then i would agree totally. D.

[gerry321] 11/1/2007 10:13

Dam.....
In a perverse way perhaps the longer the delay.... the better than expected bid share price .???
On the theory that good news rewards those who are patient..........?

[damofarl] 10/1/2007 15:06

Gerry/Quepassa, thanks your contributions/observations. Sometime ago you commented on the quality of data on amba's website, and also how recently that infoflow had slowed. Well pretty much since the announcement, i note paralysis more than a slow down. Other than the 'talks' notice, and ARU's year a'c's there has been no ARU specific posting on amba.; as for ARU's postponement, for a company normally so timely with their trading updates/reults etc this does seem strange. Thankfully their is no paralysis in milk goinging out the dairy door!. to cancel (postpone) an agm would suggest ordinarily that something material had happened, say a loss of a major contract(s), legal action, profit warning, takeover approach, going bankrupt etc...that would impinge on shareholders views/voting. There have been no major contract losses, the lowering oli price can only be beneficial and noone else has made (can make) an approach; ARU's £15m action against Wiseman/Scottish dairies is insignificant, the doorstep sale has gone through approved...

As others have voiced, i don't believe the hold up is price but administrative/fiscal tidying up of (any/all) of the following, in no particular order:

1) Staplemead/Claymore jv's - partner have pre-emptive rights in case of change of ownership?

2) termination/renewal/revised contracts for senior aru mgmt, and appointment within amba's supervisory board

3) outstanding legal actions

4) tax utilization

5) agreement with American loan note holders vis-a-viz tax/currency effecient payout

6) do major conracts have break clauses for 'change of ownership'

7) pension deficits/commitments

8) tidying up (amalgamation) of the number of different pension and share schemes into 1

9) AFMP - getting their approval and making loyalty agreements going forward to maintain retention of supply.

All in all i can't believe its dragging on, but like your selves hope for news soon. D.

[quepassa] 05/1/2007 19:03

Gerry,

Agreed.

Some further news is on the very near horizon.

[gerry321] 05/1/2007 18:15

Que
Only conclusion you can draw from this behavior is that an announcement is imminent ...
...if so an share price rally to the high 60s next week will be the first sign

[quepassa] 05/1/2007 12:56

The AGM details page on the Arla web-site has been blanked out again from earlier this morning.

Curious and curiouser.

[quepassa] 05/1/2007 12:55

Let's hope that ,either way, share-holders are not disappointed.

You would normally expect some reason, frequently accompanied by an apology, to be given by a UK plc for such an embarassment as having to postpone their AGM. But there is so far none. - Many investors may have been counting on receiving their annual dividend within a reasonable time-frame which has now perhaps been further dalayed.

Presumably The FT will by now have picked up the delay of the AGM and will be putting in the relevant calls.

Such "bad form" as this would appear to me as unusual behaviour from the collective Arla UK Board Members from whom we have always received and come to expect decent behaviour and good corporate governance. - I can only personally put this unusual pattern of behaviour down to extenuating circumstances.

[gerry321] 05/1/2007 11:20

Or.............possibly

The deal includes part payment by way of a special divi lumped in with the final divi of 0.8p........

[gerry321] 05/1/2007 11:17

Que
Arla must be reading this BB daily to respond so quickly to your comments......
I suspect the deal is now done and dusted at least in principle else the delaying of the divi would have warranted at least an apology to shareholders

[quepassa] 05/1/2007 10:27

The Arla website has just been updated with a revised AGM date of February 2007 but with no precise date given.

With an AGM slated for next month but with no exact date given, this is very unusual to say the least for any mainstream UK plc.

This could be interpreted that the Board of Arla do not expect it to take place and it might be cancelled in the event of an EGM.

QP

IMO/DYOR

[gerry321] 04/1/2007 17:58

Que
Perhaps the cost of the pension deficit is greater if the sale of the doorstep business is not legally complete........hence the delay

[quepassa] 04/1/2007 15:45

I think so, as the dividend needs to approved at the AGM ( although, I presume an EGM could ratify it also ).

[gerry321] 04/1/2007 15:23

Que
Where does this leave payment of the dividend........?? Will it also go into limbo pending a new AGM date ?

[quepassa] 04/1/2007 14:25

Until this morning, the official Arla Foods web-site ( www. arlafoods.co.uk ) showed on its Investor Relations/Shareholder Info/AGM pages pages that the AGM would be held this January with electronic voting to be notified on the site 20 WORKING DAYS prior to the January AGM.

The same AGM details page is now this afternoon blank. Not updated but blank. No date given for any January AGM - altho' the Financial Calendar page stills says end January.

Given the requirement for 20 working days working notice, it is now almost impossible to hold a January AGM unless notification - according to my calculations- is given to-day.

This would mean that:-

1. Arla will have to announce pdq that the January AGM has been post-poned to February or beyond, or

2. That there won't be an AGM, but instead an EGM - which would mean a significant corporate action.


It would appear to me that if merger talks had failed, the January AGM would be taking place.

Not having the long-announced January AGM, leads me personally to conclude that talks continue. And after three months, I cannot believe any longer that they are still haggling over price. My instinct and experience tell me that we are now down to the nitty-gritty legal detail and documentation.

Also, all activity with Perpetual has stopped. On the run-up to Christmas, there were almost daily Official Reports by Perpetual that they had bought or sold a few thousand shares here or there in managing their 17% shareholding in Arla Foods. It seems to me as if there is now some form of (self-imposed) restriction/stand-still with Perpetual on their Arla shareholding.

You could of course argue that this likely postponement of the January AGM is a negative for the merger talks and open to other interpretations but that is not my personal view- although very interested to hear any feedback.

I personally expect some form of company announcement imminently and if it's not either full details about the on-going merger talks or a recommended offer, I believe that the Board of Arla Foods UK rightly owes patient share-holders and various commentators a full explanation as to why the AGM would have otherwise been post-poned.

All IMO/DYOR

[deniscaff] 03/1/2007 18:33

Lord r

Sold Sefton at 6p, took a small loss after adding quite a lot prior to their last results, as usual got greedy and added increasing my weighted ave instead of taking a 20% profit on the small holding that I had, in hind sight it could have been a lot worse seeing where they are now.

Not followed them since

Cheers

[lord r] 03/1/2007 17:38

Denis

Happy New Year!!

Are u still into Sefton? I bought a few last year as i think u mentioned them,
or have i got confused?

Just wondered if u knew what was happening with them, & if u r holding?

[gerry321] 02/1/2007 23:09

I accept that a hostile bid might seem nonsense when you have a puppet board........
...........however
Is there any legal reason to prevent Amba acquiring as much as market forces permit of Arla with a take it or leave it offer in the event of not reaching an agreed bid share price with the board .........and then come back with a higher bid for the balance of shares at some later date..........?

ie If the recent history of the share price is the lowest it is likely to be in advance of a bid then now must be the time for amba to go for the maximum shares it can get at the best price they can justify to themselves whether or not a bid spis agreed

[gerry321] 02/1/2007 18:49

Damo

Do you have any contacts inside Arla.......?

[damofarl] 02/1/2007 13:59

p.s, Gerr/Quepassa.....did you get your syndication fee from the Sunday Times journo? D.

[damofarl] 02/1/2007 13:51

Happy new year.

A few thoughts on previous postings; the deals still on, with the delay being related to fiscal tidying up rather than concrens over pension liabilities. Amba are fully aware of the pension requirements, and include them in their 04/05 accounts, so nothing has surprised them in htat regard.

Notwithstanding the financial numbers posted by tiredoldbroker, i do believe the val;ue is strategic for amba. ARU is the biggest producer, by volume, but they've yet to translate that into the profits of RWN and Dairy Crest, or the rising share price ot those 2; if one says that these three have the market, then one has to ask if RWN, Dairy Crest have run ahead of themselves or ARU is lagging behind(or both!). As has been said the CC will not allow a takeover amongst the three, although a European co. would probably get the nod. there could also be consolidation amongst the coops, Milklink, Dairy Farmers of Gt. Britain etc. so there will always be 3/4 major players.

I don't see anywhere that amba have a stated mission vis-a-vis ARU to make it member owned (AFMP would facilitate this greatly), although this could be a reason for takeover delay if they are trying to tidy it all up at the same time.

An article on Farmers Weekly (last Nov.)interested me, synopsis below:

'The UK could be facing a shortage of milk by November 2011, which raises the prospect of milk imports, a new report has projected. Kite Consulting's Milk Forecasts report has warned that the UK is heading for its largest ever under quota position. "The exodus from the dairy industry is running at 7% and accelerating," said the report's co-author, dairy industry consultant John Allen. "In the next three years one in five dairy farmers will quit."

Supply decline

At that rate of attrition just 12,300 dairy farmers will be left in the UK by 2012. And with annual demand at 12.6bn litres if the decline continues supply will be as low as 12.68bn by 2011. This means by November of that year, when the seasonal downturn of supply is at its lowest, the UK could see a real milk shortage.

"Less milk would be manufactured into cheese, butter or powder, drawing in imports to fill the shortfall and exposing us to world market prices and exchange rate fluctuations," Mr Allen warned. But Arla Chief executive Tim Smith said that importing liquid milk was unlikely. "Anyone contemplating importing milk is contemplating financial suicide. The eye-watering costs of transporting liquid milk from abroad make it unviable."'.........

The last paragraph interests me most; Amba has a surplus of liquid milk, so if the above report is realised (surely supply and demand will kcik in?), UK milk will be used to meet liquid commitments, and the cheese/butter/powder could all be imported, with Amba/ARU best equipped of the three UK groups to take advantage. Thats one reason why id rather have amba 'shares', or have ARU kick about for another 18 months.

Finally, until i see Amba's 05/06 ac's posted (still waiting?) with negative news on ARU, i believe the deal is very much on. Good luck all for the year ahead. D.

[deniscaff] 29/12/2006 19:42

Gerry

I'm not usually so blunt but 3 suppliers to 2 will not happen , Arla, Dairy Crest or RWD would never get the OK from the CC to aquire or merge with each other and the the Major retailers will continue to keep them on their toes by moving the supply about but not to the extent of sending one under.

Harry new year to you all.

DC

[gerry321] 28/12/2006 22:06

tiredoldbroker
You make a lot of pertinent points and I for one wouldnt challenge your accounting......
I would emphasise however that as a supplier of a basic commodity and UK market leader at that Arla could be viewed as a relatively low risk co in a low risk sector of the economy........This ought to attract a small share price premium
Also
........ as a prospective coop business it potentially offers a trustworthy home for farmers seeking long term deals for their products
and
........with the capability to integrate price sensitivity models which link the cost of production and the selling price to supermarket chains........coupled with its external resources
arla is thus well placed to be one of the two suppliers who eventually survive from the 3 suppliers at present
and make no mistake
when milk is supplied by two and not 3 suppliers the balance of power shifts across the table from the buyer to the seller....
.....since it is possible to maintain an informal minimum price agreement with two parties that is too risky with 3 parties..
.........leading eventually to a relatively cosy market with higher milk prices all round and little or no price competition on this commodity between the supermarkets