Carclo Share Discussion Threads

[9degrees] 06/8/2018 16:22

PUSU expires a week today unless extended . so action this week hopefully

[queeny2] 06/8/2018 15:45

Snap rivaldo

[queeny2] 06/8/2018 15:44

Must be going better now.

[rivaldo] 06/8/2018 15:44

...or on the other hand....

[gordongekko4] 06/8/2018 14:51

What is up with the share price weakness? Makes me think the negotiations between Carclo and Consort Medical can not be going too well...

[1gw] 04/8/2018 15:43

Another quiet week on the 8.3 front. Axxion continues to accumulate Carclo while Legal and General resumed selling down Consort, after the boost in its holding from the transfer in last week.

[gleach23] 31/7/2018 12:51

Welcome queeny2. Appreciate your contributions to recent discussion here which, as a relative novice, I have been reading with interest.

[queeny2] 31/7/2018 12:27

gleach23 thank you, unaccountably I missed that reading on my phone. That's good. If auto-selling to cover tax liability is completely standard, with complete precedent, then that's fine in an offer period, to NOT do it would be wrong.

[thechurch333] 31/7/2018 12:16

I see Axxion have bought more shares today

[thechurch333] 31/7/2018 11:55

Agree, very unusual. There may be something in the takeover code that allows him to sell to meet tax liabilities. Either that or the sale was pre-arranged and agreed by the board, so it has to go ahead. Don't think it tells us anything either way about bid talks.

[gleach23] 31/7/2018 11:40

The RNS states that the sale of 30k shares is to cover the attendant tax liability on the 64k PSP shares that vested. The net result is a actually an increase in his holding of 34k shares.

[queeny2] 31/7/2018 11:12

I'm being thick I think - what's this sale by CEO of 30k shares at 118?Extremely unusual, is there an explanation?

[thechurch333] 30/7/2018 11:12

Thanks 1gw

[1gw] 30/7/2018 07:32

On the 8.3 front, the main feature of last week's declarations for Carclo was that Axxion continued to increase, while River & Mercantile decreased. On the Consort side, main changes were Mirabaud decreasing due to a transfer out (which seemed to be picked up by Legal & General), while Blackrock and M&G increased. Legal & General sold Consort but this was more than balanced by the transfer in.

E&OE.

[thechurch333] 27/7/2018 11:09

In addition to a host of trade buyers, there are probably a dozen private equity firms looking at Wipac right now. It is a good standalone business with decent revenue growth and margin recovery prospects. I'm sure the management team would be up for an LBO.

[boadicea] 27/7/2018 10:43

The diveregent nature of CAR's activities is the main difficulty in arriving at an optimal valuation. Ideally it requires the simultaneous interest of two other parties, one for CTP, which we have, and one for Wipac. (I don't see the Bruntons/Jacottet business as a major obstacle.) No doubt the directors are working on this to maximise values (at least, one hopes so!) but it doesn't look that easy. The only UK company which immediately comes to mind is Dialight and I rather doubt they would bite.

A larger group, ZKW group, based in Austria and with operations in the Czech Republic seem to be suppliers to much of the motor industry. Annual turnover about £1 billion and 10k employees (round figures). It could perhaps represent a step up into the premium range for them and the current low value of sterling could make it an attractive purchase.

Any thoughts?

[rivaldo] 27/7/2018 07:43

Good news - the Vystra contract win is certainly a biggie given the need for these new facilities:



"26 July 2018
Carclo expands operations in UK with new facility

Injection moulder provider, Carclo Technical Plastics (CTP) has expanded its services in the UK with a new facility in Mitcham, Surrey.

The new facility is dedicated to the manufacture of the BD Vystra disposable pen, used for the delivery of liquid pharmaceuticals. CTP worked with BD Medical to develop and scale-up the device.

The new facility was opened by councillor Stephen Alambirtas and deputy mayor Judy Saunders from the London Borough of Merton.

CTP has invested significantly in new manufacturing space, injection moulding machines, ancillaries and specialist staff in Mitcham to support this and other projects.

CTP’s UK managing director Patrick Ward said: “Carclo Technical Plastics is a specialist contract manufacturer of disposable diagnostic and drug delivery devices for the global medical industry. The Vystra device underpins CTP’s continued growth within this sector.”

Carclo has recently expanded its operations across the US, Czech Republic, China and India facilities as it continues its strategy of increasing its contract manufacturing business globally.

Commenting, divisional chief executive officer Robert Stutzman said: “Carclo Technical Plastics has aggressive plans to continue developing our medical business, supported by Carclo’s engineering skills, global footprint and financial stability.”

[beeezzz] 24/7/2018 21:21

government brings in new takeover rules, won't affect this deal thou...

[queeny2] 24/7/2018 11:37

Yes it gives them more time versus the alternative of CSRT going hostile this Friday, which moves the deal onto a fixed timetable of offer document between day 15 and day 28 following firm intention to bid announcement, defence document within 14 days of offer document, all quite speedy.

Absent a counter-bid, or clear intention to break-up themselves in a way that maximises shareholder value (auction), the defence is non-existent of course, so Car wouldn't want to go there, it is not the route to shareholder value (or CEO package).

The one set of motives I'd like to understand here is the Chair and CEO - how do they maximise their outcome, what do they want, because that will influence where we end up.

[illiswilgig] 24/7/2018 11:06

It was in my mind to question the extension to PUSU - it may work tactically as it's not just to Consort advantage it also gives Carclo more time to develop their defence as well as another month of improving performance and/or signing contracts. Maybe.

cheers

[kiwihope] 24/7/2018 09:06

Biggest risk for me is that Consort are limited in what they can offer. I don't like all-share offers as the price paid depends upon bidder's share price. Consorts has been dropping since the bid announcement suggesting some possible resistance to the deal?

What would happen to Carclo's share price if Consort suddenly announced they were terminating discussions? That is the real risk...

[queeny2] 23/7/2018 21:03

We're all clustered in the same place I think. Finding an adventurous counter bidder for whole thing tough, Really tough.

With two larger more sophisticated companies I could invent all sorts of possible scenarios, but not so much here.

I like the questioning whether early extension is bullish rather than early white flag. Nice thought. Will think on it.

In my dreams Car and CSRT put led up for auction and Consort pay a fair price for CTP and that gets us to 200p, in my dreams.

[1gw] 23/7/2018 20:38

I think I'm in a similar place. I can't see how Carclo could save face opening talks on the basis of an offer within 10% of the 116p they rejected out of hand, so I would expect Consort to have (indicatively) offered at least around 130p to get access to data and cooperation in evaluating the data.

If negotiations and discovery don't throw up any roadblocks then there's the chance of a further move up to secure a recommendation as we near the PUSU deadline.

But to get to the 150p+ I think we all think could ultimately be justified (by Consort to its shareholders), it needs some competition, or a really credible defence position such as an offer on the table for Wipac. I'm not sure I can see the logic in another company bidding for the whole of Carclo before Consort get to PUSU - most likely I think anyone thinking of bidding would wait to see if Consort and Carclo can reach agreement and if so at what price before they disclose their own hand. So Carclo, hopefully making use of a really good advisor, has to drum up as much interest as possible before agreeing to recommend Consort in the hope that someone then follows through with a counter-bid after Consort announce a recommended bid.

So I suppose I'm looking at a most-likely case of a recommended offer around 130p or maybe slightly higher. You may be right queeny that on a probabilistic basis the expected outcome isn't much higher than it was before today, but deterministically it feels to me like we moved forward quite a long way with today's news and I remain surprised that the price didn't move further.

[thechurch333] 23/7/2018 17:49

I also added a few today.
My observation is that it is early to ask for an extension to the PUSU as they still have a week to negotiate. Look at the IWG situation currently as an example where these things normally go down to the wire before an extension is requested. On balance I think it is bullish as it buys Carclo an extra 2 weeks to find alternative buyers. Consort most definitely want it and Carclo management have today indicated they know the game is up for them.
I therefore think downside is limited. The most likely outcome is a bit higher than this (125-130p?), with a chance of decent upside in an auction (150p+).