Ashoka India Equity Inve... Share Discussion Threads

[wynmck] 18/6/2015 10:10

s/p rising

[irenekent] 18/6/2015 08:20

I think Keysight have been very opportunistic with this offer. Bearing in mind that Eurozone stocks are supposedly poised to crash as Grexit occurs they have obviously thought that investors in Anite, both institutional and private, will be happy to cut and run. Greece however is actually a nonentity in the scheme of things economically. They represent a miniscule proportion of the European GDP and have little effect financially on the rest of the Eurozone. I am sure that once a decision is made either way on the Greek problem that markets will surge, Greeks will turn on their government, and before long the Army will step in and return the country to the status quo that existed prior to the EU adventure.

Unless there is a very good reason, such as us not being told the truth about the companies trading position, I would hope shareholders will resist this low ball offer by voting against it.

[dk37] 18/6/2015 08:07

From todays Times : Martin Waller



Published at 12:01AM, June 18 2015
Anite Group has become the latest British technology company to succumb to an offer from overseas, with the announcement of an agreed £388 million cash bid from a larger American rival.
Keysite Technologies is offering 126p per Anite share through its Dutch subsidiary, in what observers say is a bid driven by “tax inversion”, where American companies buy with cash held outside the country, so saving on tax.
Anite makes equipment that is used for testing new telecoms networks and systems and is heavily involved in the roll-out of the 4G network around the world. It has disappointed the market in the past because the timing of sales and profits have tended to be unpredictable.
The board of Anite that the terms on offer were “fair and reasonable”. In all shareholders speaking for 15 per cent of the company have agreed the terms.
Keysite, based in Santa Rosa, California, is mainly involved in testing electronic products and, according to Ron Nersesian, its chief executive, the deal will expand its portfolio into software design and validation. The deal, funded from existing cash resources, is expected to complete in the autumn.
Anite shares rose 24½p to 127½p. The offer represents a 22.3 per cent premium to the share price at the close on Tuesday. However, some analysts wondered if a rival bid could emerge.

[muscletrade] 18/6/2015 07:40

Here is the IC quote...
IC VIEW:
Anite offers an attractive proposition, serving a large, international and growing market that has considerable barriers to entry, and its management team has diversified into adjacent markets through a number of bolt-on acquisitions, too. Other rivals could easily be running their slide rule over the business in light of the cost savings Keysight believes are achievable within a couple of years. Anite's shares are already trading at a small premium to the offer price. Sit tight.

[picobird] 18/6/2015 04:32

Yes, a humongous quantity but a lot less than the CEO.
The last time I traded (needed the cash) I even managed to add another 5000.
Anyway my state pension kicks in next month so cash flow should ease up a bit.

I think the management have snapped off the arm of Keysight because their size restricts their ability
to expand fast enough. Let's be under no illusion though 114p is a low offer - after extracting the cash from the Balance Sheet. In fact the premium is not 20% but about 10%.

Going with ST ( IC ) & sitting tight.

[mbmiah] 17/6/2015 21:47

Are you still holding Pico?

[picobird] 17/6/2015 20:46

Rhode & Schwarz perhaps, also mentioned in IC.
In fact there must be a fair number of companies who would snap up a bargain like this.
Wait & See time.

[mbmiah] 17/6/2015 19:45

Maven seem to think it's a good punt though. Any thoughts?

[mbmiah] 17/6/2015 19:44

Can't see a counter bid happening really - of course you never know

[rathlindri] 17/6/2015 17:44

Well done all those who held on (unlike me). The lower price than would have been expected hints that maybe things are not quite as rosy in the garden as some people had thought? Anyway, well done those who made a profit..

[picobird] 17/6/2015 17:26

Hmmm interesting day. Takeover offer of 114p disguised as 126p. We were getting close to 110p anyway.
Backed by the BOD - but why ???
If this offer had not come along, we would have been on 125p two weeks after the AGM based on fundamentals alone. Add onto that a modest 25% premium plus 12p cash ( on B/S ) & we have what is a 170p offer. No cons, no smoke & mirrors - NOT a silly 126p but an honest brass tacks 170p.
So the company is being sold at about a 25% discount.

This whole scenario stinks.

Just been emailed by the TA course people that nobody becomes a successful trader spending $24 on a course. They seem to have forgotten the course was reduced from $1500 - LOL
Going back to Fundamental Analysis (like Warren B) & just using TA candlesticks like werty to help with entry & exit points. That 2% risk thingy is going to take a fair bit of study, but hey - we have the Internet for things like that. :-))

[gerdmuller] 17/6/2015 16:02

Yes, to say we have been in a bull market where asset prices have been pushed up as cash makes nothing and debt is cheap they look to be getting this at a very reasonable price. They also seem to have quite a low level of acceptance. I only really have data on buy-out PTPs (over last 15 years or so) but generally acceptance levels have mainly been well over 40 percent and bid premiums have been 25-45 percent on average.

Ebitda ratios in the PE market are averaging about 12 in the £100m range (as we are in a mini bull market there as well regarding competition on pricing) whereas I think I have seen they are getting this for 10. Plus as Pico says they have a lot of cash on the BS.

I have had a lot of cos taken over in the past 10 years and generally without a counter bid they go through with practically no opposition. Especially from the institutions (the great protectors of their bonuses) whether they believe the co is undervalued or not.

[irenekent] 17/6/2015 15:55

If you want to see a better offer look at Aga today. From 100p to 138.5p. There should be a bumper dividend here returning all the cash to shareholders. I get more and more un-enamoured of this offer the more I look at it. I bet the directors will get their options honoured if this goes through. If we vote yes to this measly offer it'll be like turkeys voting for Christmas. If there is not another offer what have the directors been hiding? We must have results before any vote. All shareholders must be in full possession of the facts before making any decision. I foresee a noisy AGM if people feel they are being stitched up.

[picobird] 17/6/2015 14:45

Just had a thought cross my mind.
If the offer is for £300 + mill & the cash balance £30 + mill are we not talking about a true offer of only 90% of 126p about 114p which is frankly ludicrous considering that Panmure Gordon had about 142p as a target.

Also, will the vote be made prior to the ' bumper set of results ' which ST (IC) forecast. (AGM day when the institutions will already have made a yes or no decision).
That sounds like a stitch up ?

[muscletrade] 17/6/2015 13:00

A number of brokers have made comment this morning and for those of you that have not seen them here they are in brief, courtesy of FT Alphaville (thanks chaps).

Northland
An offer for Anite has been a matter of ‘when’ rather than ‘if’ for some time given Anite’s strength in the global Device & Infrastructure Testing and Network Testing markets. The question is whether the level of the Keysight approach (a 22% premium to yesterday’s close and 5% to our price target) represents a knock out offer. As previously argued, Anite serves a large, international and growing market that has considerable barriers to entry. Management has successfully diversified into adjacent markets through a number of bolt-on acquisitions and simplified the investment case following last year’s Travel disposal. That said, although the medium term demand drivers are positive, short term spending patterns in the sector can be lumpy (typically impacted by consolidation) and Anite would benefit from being part of a larger organisation. Today’s offer will definitely focus others’ interest.

Fincap

As predominantly a hardware sale, Anite’s handset business has remained lumpy and it has struggled to find scale in a massive global market competing against German and Japanese rivals. Furthermore, the growth of the Chinese mobile industry has brought additional challenges with handset and component manufacturers tending to use shared government testing centres rather than setting up their own. Overall, it is sad to see a UK mobile industry leader lost to US rivals; however, with these current headwinds we feel Anite is unlikely to return to the position it enjoyed in 2013, when as a high growth ‘darling of the market’ the shares traded between 140p and 160p, and we agree with the board’s acceptance of the offer.

Liberum

The fact that the premium is only 20% could suggest that near term numbers could be slightly light. We believe Anite will have talked to other potential acquirers before recommending the offer and therefore believe a counter offer is unlikely.

Panmure.

The recommended acquisition values Anite on a 22.3x PE, 10x EBITDA. While
these are not especially exciting, we think (with memories of Coda plc) that
investors will take the offer only to regret it afterwards, but, a bird in the hand,
etc. That said, we think that this will go down to the wire as investors look to
sniff out a competitive bid. Anite suffers from a lumpy revenue stream, the
ongoing uncertainty in the NEMs and the operators and while there are new
tech opportunities – here we are thinking specifically of 5G – its impact is
outside of our forecast period. 5G is likely to be 2018 before we see evidence of
it hitting our forecasts. Anite, uncommon with software companies, is not easily
able to pivot into an annuity revenue-based business. A lesson for us all
perhaps. We move to Hold.

For what it is worth(which is probably not a lot) I think the offer is a bit thin and am holding out for now.
Good luck

[wynmck] 17/6/2015 12:01

IC Online advising shareholders to sit tight in case of other offers
google....aniteattractsoffer

[picobird] 17/6/2015 11:02

Someone mentioned 'nasties'.
Well, the only nasty is the weak Euro which does affect the accounts a little. As the EU has the Grexit under control then the € can only weaken a wee bit more - perhaps 1.42 - 1.43.

Keysight has a MC of $5.5 bill, compare that to China Telecom $61bill

Interesting
[...]
You will have to google the following in order to read a very interesting article
'Anite accepts American Bid'

[dk37] 17/6/2015 10:53

DavROs , you are correct, the binding commitments are worth nothing if shareholders are in receipt of a higher bid. Under these circumstances the current bid would be voted down allowing shareholders to consider and vote on other options. The language suggests that this deal is nearly done but in reality the Board have simply put the Company on the market with a secure base bid.

[irenekent] 17/6/2015 10:52

I wonder what the next dividend will be?

[davr0s] 17/6/2015 10:47

Yes I saw the 7day bit too... So how would that work if a 150p bid arrived after that time? Presumably the shareholders would vote for 150 regardless of what the BOD has provisionally agreed - though I am no expert in these matters?

[dk37] 17/6/2015 10:44

Another important point stated in the announcement is that the commitment is only binding if a bid at a price 10% above the current offee ..... and only if a counter bid is announced within seven days of the date of this announcement, hence the short term speculation

[davr0s] 17/6/2015 10:20

It seems to suggest that if another bid come in 10% higher then all bets are off with bid 1. So that's the target then for another suitor.Given the current bid is cash and has been accepted in principle by the BOD I am trying to see the downside here barring a complete market meltdown and it seems someone is happy to buy above the bid price so sitting back and enjoying the situation (for once !)

[picobird] 17/6/2015 10:06

Apparently that 15.2 % stake is not binding if another higher offer comes in (thank heavens).
I think the BOD are doing the right thing - shaking the suitors to flash their cash.
This Bull market cannot go on indefinitely, but those who can see that often get their timing out.
So if the Grexit happens (probably will), after things settle down we could have another bull year for trading before the Bears take over (hopefully longer).
On the other hand ???

[tatsfield] 17/6/2015 09:55

At 126p I'll more than double my investment but I still think the price is low for the capability and prospects of the company and hope that a competitor will value Anite at more and be spurred on to offer considerably more to stop Anite falling into Keysight's hands and beyond their reach. If anyone else had an interest in buying the company, now they will have to come out of the woodwork before it's too late for a counter bid. Interesting times!

[2flatpack] 17/6/2015 09:41

pico
I see it has eventually happened but the price!
OK I suppose for the short term traders but for the long term investors it looks low .
Hope you get your counter bid.
Cheers