Colliers Intl Share Discussion Threads

[scburbs] 02/2/2012 08:49

JoJo_Jo,

Exactly when do you think the debt is due? What is the "misleading" stuff? If you are trying to present refinancing as not being a problem[?] then there is only one of us who is being misleading!!

[jojo_jo] 02/2/2012 00:52

I don't think for one moment he (or anyone else for that matter) would be buying in this quantity unless they had affordable designs on the company. He is certainly the third generation Muzicant to head up the long established Austrian firm (much like Ritblat I guess - perhaps he is an old family friend?) I imagine he's very comfortably off. He also has considerable experience in Anglo-American real estate. If bought for cash, the company could be kept as a stand-alone operation, working down its debt with operating profits. This should be perfectly achievable with a decent business plan and a bit of ruthlessness. The word refinancing is misleading (intentionally?) as the vast majority of the debt is long (over one year out), and according to the last update the banks 'remain supportive'. It may be required in a few years time, but probably not in the event of the successful implementation of a superior business plan. The option of some debt paydown (or 'transfer' to their own banks) is also a possibility.

The current BOD have stood like rabbits in the headlights, unable to do the necessary cost-cutting and direction changes. For some unknown reason they have continued to recruit expensive professionals in a shrinking market. Why? I know they consider it a rare 'opportunity' to pick up good staff, but if there's not enough business in the market to cover their wages it's pointless (and potentially suicidal). They should recruit as/when the market improves, and not before.

Eliminating current operating losses (ie. cutting overheads) is imperative and just requires a bit of selective ruthlessness imo.

It is clear from their insistance on cash, that FS intend keeping Colliers UK at arms length (for a while at least). This rings alarm bells for me, as it would cost virtually nothing to pay for it in First Service shares. The most usual reason for doing this is to avoid absorbing the target company's balance sheet. They would then, imo, endeavour to turn the company around without any major financial input, just cost-cutting and re-planning. The banks would thus be no more secure than they are now, and probably a lot less secure than they would be under the Austrians (or any other credible acquirer). If I was a banker I would be very perturbed by an all cash FS takeover. I would only be more concerned if my pub darts team took it over! LOL.

Lastly, and most pertinently, the banks won't be voting on the matter, we the shareholders will be, and the vast majority of us won't be involved in Colliers UK post buyout... unless of course we get paid in shares. Accordingly the ONLY important thing is the price, so it is all about the highest bid.

All IMPO, so DYOR.

[scburbs] 01/2/2012 17:44

It's certainly interesting to see the Austrian continuing to add. Does anyone have any research on how rich this guy is? Can he afford to buy Colliers and support the refinancing/current operating losses until turnaround? Any idea how big Colliers Austria is (although he seems to be buying in his own name)?

[jojo_jo] 01/2/2012 16:11

I have mentioned the goodwill figure before, it has been stated at £29.5m for a couple of years at least, and was stated as such in September. Other intangibles are relatively minor at around £400k. As I have already said, if we halve this to £15m, we still arrive at a NAV of around £10m. This imo, is at least what Colliers UK is worth.

If there had been anything untoward over the last few months, which could justify a reduction in the goodwill figure stated in September, they would have to notify the market immediately. They can't just arbitrarily alter this, unless something substantial has happened, which in turn would require notification/warning. No such notification has been made or implied.

So, for me, £10m is a fair minimum value on the evidence before us.

IMPO/DYOR.

PS. This is now under wider public (and official) scrutiny, so anything unethical, illegal or improper will have serious implications for Horrell and Ritblat. They daren't put a foot wrong now! IMO.

[scburbs] 01/2/2012 15:23

Relying on a NAV including intangibles/goodwill is a dangerous business IMV. Tangible NAV is not so healthy.

It is crazy that the company has not released an H2 trading statement.

[loverat] 01/2/2012 14:01

Indeed - these were changing hands at 16p this time last year. What has happened since? Well the recovery is slower than predicted. The company has recruited aggressively and seems to have taken on new business. Profits may be elusive for the moment but with H2 being in line (we would have heard otherwise) and no other adverse news since, there is on paper a viable company whether stand alone or taken over.

Speculators and Canadian Carpet Baggers have smashed the share price into oblivion and caused a disorderly market in which shareholders have lost money. I do hope we hear from the company soon because the longer this circus goes on the worse for all.

[jojo_jo] 01/2/2012 13:46

A quick check shows that the share price stayed above 6p for about 3 weeks after the Sept 30 report. There have been no negative RNSs since and no profit warnings, so we should be able to deduce little has changed. Accordingly if there is little change since that report, the accounts should not look much,if any worse than then. If things had deteriorated they should have let us know immediately. They are legally obliged to do so.
If there has been any, it should not impair the balance sheet (net assets), by more than £5m max, ie. showing a NAV =/> £20m. So the shares should still be worth over 5p relative to their early October price. In my opinion far more, fwiw.

IMPO/DYOR.

[jojo_jo] 01/2/2012 12:16

After FS formalise an offer, I predict a rival 'opening gambit' bid around 2p, valuing COL at £3m. Very cheap considering the financial statement of 30/9/2011 indicated a NAV of over £25m. Anything up to £10m is still cheap for COL. Even with some deterioration the NAV should still be above £20m, so £10m is half price.
After this I can see others entering the fray, with offers getting towards fair value.

IMPO/DYOR.

[jojo_jo] 01/2/2012 10:56

First Service clarifying that they're NOT in concert with either of the two recent stakebuilders. They probably had a prod from the takeover panel. It's obvious the Austrians are acting alone. They want the UK operation in order to become a major European player (Austria/UK/Spain/Ireland), and will probably expand further still afterwards.
IMPO/DYOR.

[jojo_jo] 01/2/2012 00:16

Another 1.25m to our Austrian friend yesterday (Monday) and probably more today.

IMPO/DYOR.

[jojo_jo] 31/1/2012 14:40

Some big buying coming in now. Looks promising. I'm holding out for 5p. Worth every penny.
IMPO/DYOR.

[scburbs] 31/1/2012 10:41

Something should be announced if they are in cahoots. However, concert parties aren't always easy to define (highly unlikely that the Austrians are buying on instructions from FS, but that doesn't mean there isn't a CP). Hopefully the takeover panel will be looking into it.

Here is a recent example of where the takeover panel adjudged on an undeclared concert party.

[jojo_jo] 31/1/2012 10:35

Something would have to be announced if there was a CP. Clearly, to me, the Austrians aren't in cahoots with FS. They want the UK operation for themselves.
IMPO/DYOR.

[loverat] 31/1/2012 09:22

'Near theft' - I reckon that might be a bit generous.

Anyway we shall see. The timing of the stake building has followed the FS move and you sort of wonder if these people are acting on their own and interested in Colliers, why they are only making a move now and after FS have already warned the market that they've got their snouts in the trough.

[jojo_jo] 31/1/2012 09:17

Perhaps, but I have outlined the normality of Franchisees buying fellow Franchisees.
The Austrians would of course be competing with First Service for the UK operation, but they should not be discounted or regarded as underdogs simply because FS are bigger. At this price Colliers UK can be afforded by many, many suitors. The Austrian (and others) have been buying since the FS announcement put Colliers UK 'in play'.

All I'm looking for is a fair price, not the near-theft proposed by First Service. You may be happy with what FS are offering (!?). I, most certainly, am not.

IMPO/DYOR.

[scburbs] 31/1/2012 09:06

JoJo_Jo,

I can't agree with you there it is completely like going up against First Service. First Service has for the last few years been in the process of buying out various of the local Colliers offices. I have been waiting for years for them to offer on Colliers UK, although not in this manner! They have also announced their intentions prior to the Austrian guy buying!

You think that is not going up against! You describe this as perfectly normal? I suspect you would struggle to find many real life examples.

"217 company-owned offices in 38 countries with 7,000 employees; partner offices in 23 other countries"

First Service now own much more than half the network.

[jojo_jo] 31/1/2012 08:32

I believe the statement was just to force the share price down, so an offer above it could be made (eg. force the share price down to 0.7/0.8p, then offer 0.9/1p for them). At this price there is relatively little value in the shares, which have tumbled 95% since last January, effectively wiping out long and medium term shareholders.
With credible counter-bidders appearing, they will have to re-consider this approach. As I said before, a cash-offer situation is a game over situation, so shareholders need only consider the price being offered, and accept the BEST offer. After acceptance, shareholders (other than the 'winning' shareholder) will be out with just cash for their shares.
The balance sheet implies a value of over £10m or around 6.5p/share, and anything below this is a discount to book price.
We can only hope Horrell and Ritblat act with some integrity (and common sense) on behalf of all shareholders. FS cannot be trusted. They could well asset strip Colliers UK. You can be sure Horrell would be gone within 6 months. Ritblat would probably resign, his name having been badly tarnished.
However I don't think they'll get it, as other bidders are appearing, and there'll be more. We could yet get a fair price, close to book value. Any party or combination of parties holding 30% or more could block an FS take-over.
IMPO/DYOR.

[loverat] 31/1/2012 04:24

Jo Jo_Jo

You may be right - in fact I hope you are. However, the first thing I thought when reading about this was that these people were likely to be a group of Carpet Baggers acting in concert with First Service.

With the silence of the company it is always very difficult to predict what is going on behind the scenes in these situations and nothing would please me more to see someone stand up to a company which realeased a statement which seemed calculated to destroy the value here.

While we are on the subject can someone tell me what this part of the FS RNS is suppose to mean.

"Any offer made for the ordinary shares in Colliers International UK is likely to be solely in cash and at a price that is a significant discount to the current trading price. Further, should any offer be made, such offer may result in minimal, if any, value to the shareholders of the Company, given the significant level of indebtedness and other liabilities of the Company"


If it is antipated that any offer is made in cash how could a situation develop where there is no value to the shares as contemplated here? If a payment of any amount is made, surely there cannot be no value at all - unless any offer includes consideration for some sort of liability.

Or do people think this statement was simply designed to create a disorderly market and trash the share price.

[jojo_jo] 31/1/2012 01:25

Another 2m or so shares bought after 3pm today. More holdings updates on the way - watch out tomorrow and Wednesday.
IMPO/DYOR.

[jojo_jo] 31/1/2012 01:08

There is nothing untoward in one Franchisee buying another (it happens all the time with McDonalds, Subway, etc). In fact it more much more common than the Franchisor buying an operator. The expression 'going up against' is a tad misleading, as Franchisors tend to step in when an operator can't find an independant buyer. You would not be competing with McDonalds when buying a second Franchise off another Franchisee. First Service may not be ecstatic about it, but it's all part of the game and perfectly normal.

Colliers Austria appears to be an unlisted private company (no stock price, investors page, accounts, etc shown on their site). Acquisition would therefore serve both the purpose of expanding in Europe and listing in London. I don't think our current lenders would have any qualms. If I was a lender I'd certainly be happier with Colliers Austria than FS.
I don't think for a second that Muzicant's share buying has been done in concert. It looks every bit a preparation for a serious bid.

From the Colliers Austria website...

In addition to providing traditional brokerage services for retail firms, such as Eduscho, Vita Drogeriemärkte and McDonald's, we have developed not only new client relationships, for example with Impo, H&M, Douglas, Zara and Mango, but also new areas of business, such as brokerage of offices, rental apartment buildings and industrial real estate, as well as development of office buildings, e.g. the Internationales Zentrum Donaustadt with the IZD Tower, the largest private real estate investment project in Austria.

In 1994 Columbus Immobilien joined Colliers International, representing an increasing number of international clients moving into the Austrian market as well as taking care - in cooperation with the local Colliers offices - of Austrian firms expanding their business abroad.

In 2005, Georg B. Muzicant, Ariel's son, joined the firm to make it a third generation family business. Based on his several years' experience in the Anglo-American real estate business, he is focused on the establishment of a highly competitive development division for national and international projects.

In the past couple of years, the real estate market has become more and more international and thus changed significantly. In order to meet the future challenges of an enlarged Europe, we have expanded our services and become more specialized.

-------------------------

The picture has changed dramatically today! FS will have to re-think this pretty damn quick. There are going to be other bidders too, once FS show their hand. It's beginning to play out as predicted.

IMPO/DYOR.

[loverat] 30/1/2012 17:58

Strange goings on here! It would be very odd for Colliers Austria to go up against First Service!


That's just what I was thinking.

[scburbs] 30/1/2012 17:47

Strange goings on here! It would be very odd for Colliers Austria to go up against First Service!

If he does not intend to go against First Service then surely there must be some concerns under the concert party provisions that First Service has gone over 30%! Not that this is that great, it just means a mandatory takeover offer at not less than 0.75p (or higher if they have recently bought shares above this price).

[jojo_jo] 30/1/2012 16:38

Looks like the boss of the Austrian Franchise may be keen to take over the UK operation.
Things are beginning to happen. People are taking big holdings.
IMPO/DYOR.

[oldtown] 30/1/2012 13:51

Ref latest holding rns.


edit/ contact number gives this as the company.
TRESELL LTD