De La Rue Share Discussion Threads

[seekerofvalue] 25/11/2011 16:55

Well well well they hit a fresh year to date high today? Either a new bid is imminent or their printing presses are red hot, following all the changes in leadership across the Middle East and Europe.

[bountyhunter] 11/11/2011 12:20

more like when the way things are going now, this could be the only blue share on a future red day ;-)

[hedger] 11/11/2011 10:28

I agree bountyhunter. Imagine how many Drachma, Lira, Pesos etc. will be required if the euro falls apart!
H

[bountyhunter] 11/11/2011 10:04

looks like a good investment with a yield of 4.76% and the Euro falling apart

[jange2] 10/11/2011 10:39

A top quality CEO helps

[alphahunter] 07/11/2011 11:24

This short is costing me money I've got to say.

You might be right re Arab countries but banknotes don't get changed overnight and DLAR is not the only player in town. As far as the Eurozone is concerned - I think we can talk about reality gap here.

I've noticed that forecast have comme down to the tune of 5-10% for 2012 and 2013 since early summer, that the stocks trades at 17-18x EPS to March 2013, with EV/EBIDTA ratios fairly rich given the flattening FcF this and next year. The consensus bets on a 200bp+ improvement in EBIT margin to ~14% next fiscal year.

The stock prices a bid from Oberthur and the probability-based pay-out ratio is negative in my opinion.

[vulgaris] 02/11/2011 11:54

Even if Oberthur don't come back this is looking attractive----- there's going to be lots of demand for new banknotes across the Arab world---- and quite possibly in bits of Europe too.

Is that why this has been going up, against the market, since July?

[alphahunter] 04/8/2011 15:13

For my information:
GB00B3DGH821 DE LA RUE ORD SHS 6580794.52 95487819.76 6.89

[alphahunter] 04/8/2011 14:37

I've covered the remaining short position in Carpetright (opened at 727p), and added to an existing and unsuccessful so far short position in Delarue (opened at 793p minus the dividend that I had to pay out). I'm not sure that Oberthur would bid again in December - and unlikely at the price they offered in January IMHO. Without the hoped-for bid, the valuation looks very full.

Not a straight case, just a weighted average of probabilities.

Mysis has remainded us this morning what happen to a fully valued stock when the potential bidder decides to walk away.

[jange] 22/7/2011 15:24

Strong rise today. Any ideas why?

[seekerofvalue] 21/7/2011 18:56

The next failure of £7.70 could see these heading towards £7.00, unless some good news is forthcoming.

[alphahunter] 01/6/2011 19:48

LONDON (Dow Jones)--France's Francois-Charles Oberthur Fiduciaire SA Wednesday appointed the former chief executive of De La Rue PLC (DLAR.LN) as an adviser to its chairman, fueling speculation that it will revive its interest in acquiring the world's largest printer of bank notes.

Oberthur denied it was intent on making an offer for De La Rue, restarting the clock set by U.K. regulators on a six-month cooling off period that was due to expire in July. "Following recent press and analyst speculation, we want to clarify, without any reservation, that we have no intention of making an offer for De La Rue PLC," said Oberthur Chairman Jean Pierre Savare.

But analysts say it could be only a matter of time.

Olivetree Securities special situations strategist Mark Kelly said in a note to clients that Oberthur's announcement "puts a lid on" De La Rue's share price, preventing it from running up on mergers-and-acquisitions speculation.

"So for us, it remains that Oberthur want to own this asset very much--but are prepared to bide their time and wait to strike until the time is right for them," Kelly said. "We will see another approach eventually, despite the timeline slipping today the probability of this outcome shouldn't decline too far."

Privately owned Oberthur, which produces bank notes, checks and secure identity documents, in January abandoned plans to bid for De La Rue after the U.K. company rejected an indicative offer worth about GBP926 million, or 935 pence a share.

At the close, De La Rue's shares were down 24 pence, or 2.9%, at 798 pence, making it one of the biggest fallers in the FTSE 250 index, which ended down 0.4%. The stock has shed 12% in value in the past 12 months.

Oberthur began pursuing De La Rue as the company struggled to overcome production problems that had tarnished its reputation and put its share price under pressure. De La Rue in July 2010 suspended banknote paper production and launched an investigation into quality issues, which found that employees had deliberately falsified certain paper specification test certificates for a limited number of customers.

Then-CEO Hussey in August resigned to take responsibility for the problems after little more than 18 months in the top job. Previously, he had been managing director of the security paper and print division.

"His detailed understanding of the market and long-standing relationships across the industry will be invaluable to Oberthur as we seek to continue to grow our banknote and security printing business," Savare said.

U.K. takeover rules now prevent Oberthur from rebidding for De La Rue before Dec. 1.

"Oberthur want this asset but are prepared to bide their time," said Olivetree's Kelly.

[seekerofvalue] 01/6/2011 17:58

Alphahunter, O/T United Internet AG thanks. I will commence some reseach on the company.

[alphahunter] 01/6/2011 17:03

DE0005089031

[seekerofvalue] 01/6/2011 16:50

Alphahunter, O/T you sound like you have a good handle on German stocks. Are you aware of any small-mid cap non-UK, but German/European listed internet hosting, datacenter provider, cloud computing related companies like IOM or TCY?

[alphahunter] 01/6/2011 15:25

Another great German company, with some overlapp with DLRA & Oberthur.
It trades on 9x Cal 2012 Earnings, just as cheap using any other measure.

[alphahunter] 01/6/2011 14:18

Seekerofvalue,

"Having the regulatory right to bid and to bid are entirely different matters"
That's correct.

"So you are still expecting a Oberthur bid"
What I am expecting does not matter. What matters is what the market expects.
At the end it's a matter of weighted scenarii, or probabilities with price targets associated with each of them (mathematical expectation).

"Are you also expecting good to great interim results? If so why?"
Lower the bar and results are great. Raise it and they are disappointing.


Be mindful that there are an awful lot of shares on loan on this one.
DLAR is on my watchlist for inclusion in my Long/Short portfolio.

[seekerofvalue] 01/6/2011 13:58

Alphahunter, I have now found the announcement that you spoke of. Having the regulatory right to bid and to bid, are entirely different matters. So you are still expecting a Oberthur bid? Are you also expecting good to great interim results? If so why?

[alphahunter] 01/6/2011 13:50

Back to Alphaville's blog, dated 17th May ahead of the somewhat better than expected numbers.





De La Rue Plc (DLAR:LSE): Last: 837.50, up 14 (+1.70%), High: 846.00, Low: 822.00, Volume: 250.23k
BE
After UBS says Oberthur may come back
BE
Bloomberg reports last week suggested Oberthur is looking to sell a 60% interest
in its smartcard business, with a suggested valuation (for 100%) of c€1bn. This
would clearly go some way to easing financing concerns on a bid for De La Rue. It
would also leave Oberthur a significantly smaller business and given a stated aim
to grow its banknote business (La Tribune, April 11), another bid for De La Rue is
quite possible in our view. The 6 month period in which Oberthur is restricted from
bidding for De La Rue ends on 24 July.
BE
FY11 results on 24 May – no update on India as yet
Whilst we would have expected a resolution on the India contract by now, the lack
of announcement on it suggests there has been no further news. We continue to
assume it is not retained in our forecasts. For the results, we are looking for
revenue of £471m (FY10: £561m), PBT of £29m (£104m) and EPS of 21p (76p).
BE
Expect a strategy review from new CEO
With c5 months in the job, we would expect a detailed strategy review from the
new CEO, Tim Cobbold. We would expect a focus on self-help measures although
we believe the low hanging fruit was achieved under the Quinn management team.
BE
Valuation – upgrade rating to Neutral, increase PT to 800p from 565p
Whilst stock remains fully valued and recovery takes time, we recognise increasing
probability of a bid. Our revised PT is based on 50% probability of a bid at £10.30
(we believe company looking for bid over £10 and Oberthur's actions suggest it
would pay a strategic price), and 50% of our fair value of 565p. We upgrade our
rating to Neutral (from Sell).

[seekerofvalue] 01/6/2011 12:05

Alphahunter, that is correct. My point being, is that DLAR is likely to remain below £8.00 in the near term without a bid. Do you believe a bid is still on the table? If so from whom?

[alphahunter] 01/6/2011 11:43

Seekerofvalue, it IS already under £8.00 as you post (794p)!

A link to whoever is interested in Giesenke & Devrient:

[seekerofvalue] 01/6/2011 11:37

Well today's fall and multiple rise in volume/shares traded tells me that no bid is coming from Oberthur. So a return to sub £8.00 is where DLAR is likely to return to once again. Looks like a nice short.