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Share Name Share Symbol Market Type Share ISIN Share Description
Carclo Plc LSE:CAR London Ordinary Share GB0001751915 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.69 13.14% 5.94 5.06 5.94 5.94 5.94 5.94 16,562 08:20:20
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Chemicals 144.9 -14.7 -25.4 - 4

Carclo Share Discussion Threads

Showing 17676 to 17699 of 18425 messages
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DateSubjectAuthorDiscuss
05/7/2018
19:09
80p in a no deal scenario is too pessimistic. At the very least management will be forced to adopt a more value enhancing strategy and Consort would still be there in the background. The downside scenario for me is a significant profits warning and Consort lose interest - but this is a very low probability (<5%). Consort REALLY want this. Even if they pay a high price the revenue synergies and cost savings will easily outweigh the multiple they pay. There is downside for them if they don't win it as it will raise question marks about their strategy/organic growth prospects. They will obviously present this to their shareholders as an opportunistic move, but not all will buy that. The key for Carclo is to get other parties interested so they can get an auction going. I am optimistic other parties will be interested and will get involved. Carclo have two good businesses making decent returns and with good growth in prospect from recent contract wins. There will be a trade buyer for the LED business who will be able to extract synergies not available to Consort. This is Carclo's strongest card to play. If it comes down to a choice between management teams in an all share offer I don't think it will take much of a bump from Consort to get it. This wouldn't be all bad news as Consort shares would probably go up and Carclo shareholders would share in the upside. That's Consort's pitch to Carclo shareholders. Sorry, a bit of a ramble. Risk/reward still looks good to me.
thechurch333
05/7/2018
18:26
Probabilistic is good! So on those numbers you're at fair value being £1 plus 20% of the dream. If you currently dream of £1.80 that would give you £1.36 fair value, well over the current price. My £1.50 was much more of a deterministic outcome, and very much back of the envelope as you could see. If there's some half-decent pushback from Carclo and its shareholders plus Consort really want it but don't want a dilutive acquisition, then they could reasonably offer £1.50 (with still a bit in reserve). That fits with the SOTP valuation someone mentioned I think and as a 30%-ish premium to their opening shot, also makes sense from that angle. Not really a lot of volume in Carclo today, and hardly any in Consort. No new 8.3's today, that I've noticed, just Carclo's own OPDs in itself and Consort. It strikes me that with Consort's shareholder base (25 companies accounting for nearly 70% already declared according to my spreadsheet) there's plenty of scope for arbitrage if some of them think fair value is materially above today's price. i.e. sell down their Consort position and buy Carclo with the proceeds, as opposed to just shorting Consort. So if volume picks up and we see Consort shareholders selling down and acquiring Carclo, that will be a good indication that they see value (in Carclo) at that price.
1gw
05/7/2018
17:58
1gw, just trying to get a handle on what CSRT could/would pay up to if they had to. Even if having to is only a 20% chance I like to factor it in. I have no idea where this will end up, but I try and work out some different paths and then assign them probabilities to get a blended outcome. So no deal (back to 80p) might be 20%, weak fold (130p) 30%, OK fold (150p) 30%, excellent outcome (dreamy) 20%. As it were. And those probs are influenced both by how much CSRT want it and what defence CAR can mount, so it's all a bit circular but there you go.
queeny2
05/7/2018
12:57
Agree on the central costs, but simplistically that is what would allow them to present it to their own board as accretive. They pay a standalone earnings multiple that matches their own but then take costs out to create the accretion. Sounds like you're heading in the direction of them paying full value (including synergies) plus a strategic premium?
1gw
05/7/2018
12:45
boadicea, I'm afraid Car is dead in the water precisely because it is so cheap, for cheap read wholly unloved by the market. It is certainly unloved by its existing shareholders because unless I mistake the shares this year have been at a ten year low. 1gw - agree re LED, they need to get it at a price they can shift it on at, they surely don't want it. Some multiple of sales, which is what the next (synergistic) acquirer will look at, or EBITDA if PE. But re CTP I'd take a sales multiple NOT a p/e or an EBIT multiple, as that will include the synergies and margins Consort will think they can get. Then work towards a total EV and knock off the debt. I'm still working on my version, I can see value above 150. Doing it your way you leave the £3m of central unallocated costs in there, for example, which will all/most vanish. This is a really big deal for Bespak, sales £130m, to nearly double by adding CAR's £90m sales. Fairly transformational, they want this. Round numbers Consort has £300m sales total, and MCap of £600m + £100m debt, so EV/sales 2.3x
queeny2
05/7/2018
12:25
I'm sure they are working hard on both! Hopefully they have some contingency planning already in place.
thechurch333
05/7/2018
12:02
But as queeny suggested earlier, difficult to see why Consort should move anywhere near that number in the absence of a decent defence document from Carclo or the emergence of a counter-bidder.
1gw
05/7/2018
11:57
Carclo is a mix of (predominantly) technical plastics and LED, with each contributing about half of "underlying operating profit" in FY18. Would Consort be prepared to stretch to a 17 multiple on the technical plastics side and stay at 10 on LED? If so, that would take the blended multiple to say 13.5 which would imply a takeout price of something around 150p on FY19 consensus.
1gw
05/7/2018
11:00
The bid is cheeky in the extreem - in fact, almost a wind-up. An unexciting company with thin cash resources and a p/e of 36 makes an ALL PAPER offer for another company with an admittedly chequered history and pension deficit but nevertheless progressing at a p/e of 10 (calculated at the offer equivalent price of 116p) and p/e predicted to fall further in the next two years. (Figure from advfn, so may need checking!) Personally I am not the least interested in over-valued Consort paper, except perhaps to short it - and then where is the offer equivalent price? I conclude the bid will most likely fail unless the Consort share price can walk on water.
boadicea
05/7/2018
08:18
Got it. I'm rusty, but I don't believe they can have had a position or they would have needed to disclose it if bought within the preceding x months (which it would have been I think) as it would then put a floor under any cash bid they might make.
queeny2
05/7/2018
07:22
Queeny - I agree it's unlikely Consort take a position. I was just pointing out that their opening position disclosure will arrive soon (within 10 days of the start of the process I think) so we will get to see for sure.
1gw
05/7/2018
06:04
church is correct on largest shareholders, esp Schroders. 1gw Consort cannot be stakebuilding because they have not made a cash offer, only an (indicative non-binding) paper one. Buying stock for cash ties their hands. Disclosures - within some of these shareholders there can be funds run by different fund managers buying selling for different reasons, but they will jump the same way in the end.
queeny2
04/7/2018
19:52
The 8.3's and 8.5's are the consequence of the potential offer. From now on all holders of more than 1% of either Carclo or Consort have to declare their initial position (within a certain period) and then any changes to it (dealing disclosures) on a daily basis. The 8.3's are the interesting ones as they are ownership positions whereas the 8.5's are companies dealing as intermediaries. Short positions as well as long positions have to be disclosed. This 8.3 disclosure process is great for transparency. You get to see on a daily basis who is buying, selling or arbitraging (usually buying the target and selling the offeror) - and because the threshold for disclosure is 1% rather than the usual 3% or 5% you get to see many more shareholders' positions than you usually do. Carclo and Consort also are part of this process so Consort will have to make an initial disclosure within the next few days as to whether it already has a position in Carclo.
1gw
04/7/2018
19:48
No evidence of any stakebuilding by Consort in the disclosures. Carclo's fate will be determined in some part by its 3 largest shareholders, who collectively own around a third of the company. Henderson were Carclo's largest shareholder at 13.0%, but they have sold down to 9.84%, so we can reasonably presume they would accept a low offer. Aberforth, who were at 12.2% have been adding and now control 13.57%. They clearly see value so could reasonably be expected to either hold out for a higher offer or back a new management team to realise a higher value. Schroders own 11.1% and have added marginally. They also own 7.23% of Consort. They have lots of historic "form" in brokering takeovers of underperforming companies in their portfolios and my strong feeling is that they are supportive of an all share deal from Consort. Although their percentage holding in Carclo is higher than in Consort, the latter is a much bigger company and the value of their two investments are approx £8.6m in Carclo and £41.5m in Consort. It would be reasonable therefore for us to assume they are in favour of a deal on the proposed terms (and are probably involved in the initial approach). Its also worth mentioning that a couple of hedge/trading funds have disclosed combined holdings of approx 8.3%. These guys will sell to the highest bidder and are unlikely to be interested in backing an independent Carclo. Overall, a mixed picture. Aberforth are however a quality outfit and it is very encouraging to see them adding.
thechurch333
04/7/2018
16:20
Can't say that I really understand the flood of holdings notifications, forms 8.3 and 8.5 but some of them mention Consort; do they reflect Consort building up a stake?
backwoodsman
04/7/2018
16:10
meiji - all I can say is what I've said above, I had covered 60% of my short anyway after results, covered the balance as soon as I saw the news, and am now longer than I've ever been short (I think, I can't remember how big my short was back in the touchscreen days). dyor etc etc church - we're on the same page. all there is to discuss is what Consort think it's worth and what Car have the strength to extract from them. With a weather eye on how that path could conceivably be diverted down a blind alley, eg blind refusal to engage or another profits warning. The sotp plus cost synergies is a decent stab.
queeny2
04/7/2018
14:01
If Consort are bidding at 116, current price still well short of that. Have Consort not got the money to organise a market raid?.....of course not, it is all paper deal on the table. If they found some cash or collateral the picture could change. Right now I think the bid will fail.
heeley3
04/7/2018
12:50
Got to say Consort timing was pretty much perfect-caught Carclo at the low point. That's capitalism for you.
meijiman
04/7/2018
12:21
Aerospace who cares? :-( But Hilarious. Shame on you!
illiswilgig
04/7/2018
12:05
queeny2 - I agree I looked at this a month ago. Concluded it was very cheap, but decided to hold off as I was worried about more near term downgrades. Bought in on the Consort news. Surprised the shares are not higher. Consort are clearly serious as they would not have made it public. 116p is an opening shot, so we can comfortably assume they will pay a decent amount more. Edison note, although not independent, does provide a not unreasonable SOTP valuation of 144-153p. Add on synergies and a bid premium and there is decent upside.
thechurch333
04/7/2018
12:04
So you think worth buying the shares today? My read is that they don't fancy Consort so no doubt the adviser will be sounding out other parties either as white knight ( nice and cosy-jobs for Carclo management)or anyone who can outbid Consort and they can slash costs etc
meijiman
04/7/2018
11:27
who wants to have a stab at what Car is worth in a takeover? CTP sales £90m (Bespak, CTP equivalent, £130m, Aesica, drugs, £180m) Consort has market cap of 2x sales, plus £100m debt Not sure what multiple is correct for the two divisions respectively + cost saving synergy, not least the CAR £3m of central costs, put that on 10x + LED sales £50 could be a snorter, just wondering how much of one. Aerospace who cares?
queeny2
03/7/2018
16:49
I must say Carclo is, wholly unexpectedly, turning into the stock that keeps on giving. I only ever joined in because I thought the touchscreen business was wildly optimistically valued (and then the diagnostics, although less dramatically) but this new development is very welcome and unexpected, at a time when I was anyway coming round to rivaldo's position that the shares were getting very cheap, even if one's forecasts differed in optimism. Looking ahead: 1 Car wave white flag quite quickly in exchange for a raise - fine 2 Car put up respectable defence somehow, make some believers, see Consort off - ok 3 Car put up excellent defence, eg find rival buyers - excellent 4 Car have the third profit warning I was waiting for, but now don't see - oh dear
queeny2
03/7/2018
16:39
boadicea - absolutely right, I was missing the LED division which as you say might be sold after an acquisition of the whole. Who knows what share of the assets/liabilities/deficit belong in which division.
queeny2
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