Fiberweb Share Discussion Threads

[paulypilot] 17/9/2013 19:47

Hi,

Looks like the bid at 102p will go through, as Recommended by Directors, and has 35% irrevocable acceptances. Although it would be interesting to know what the terms of those acceptances are - i.e. whether they are no longer binding in the event of a higher, competing offer? I might give the company a quick ring to ask about that in the morning.

Overall, I'm not happy with 102p plus the 1.2p dividend, it's not a great price by any means, although as the announcement today states, this is a capital intensive business. Just seems crazy to be selling out at a lowish price when the economy is just beginning to improve.

Still, a bird in the hand, I guess. We've got 9.6% of the Titan Small Caps Fund in this one, so a good result for the Fund (I do their research), but we'll struggle to find anything offering such good value to recycle the money into. Getting harder & harder to find value in this market, so we'll probably sit in cash instead - I'm sure there will be better bargains on a market correction.

Cheers, Paul.

[welsheagle] 17/9/2013 19:15

Try 21st Century Technology, 18bt

[18bt] 17/9/2013 17:23

Oh well suppose we've got to find another recovery story with a decent yield. Anyone any ideas?

[bearbully80] 17/9/2013 17:06

nice touch with the slight increase to 102p - might just win people over but still low by about 15-25% - really hope there is a counter bid, because with 35.57% shares already irrevocable promised to PGI, it is quite likely to get the nod in a vote.

[saripoos] 17/9/2013 15:51

69 MINUTES TO GO

[bearbully80] 17/9/2013 15:46

fair point royaloak.
who are the rivals of PGI? apart form Fiberweb, of course!
if I remember, Blackstone own PGI - who are Blackstone's rivals?

[royaloak] 17/9/2013 14:32

Remember if the Bidder is happy with the Books, another prospective Bidder may then show his hand....

[bearbully80] 17/9/2013 14:02

... yes, it does look like the market is still, even at this 11th hour, hoping PGI come in with a bid in the last few minutes, just before their deadline expires at 5PM, with somebody still paying close to 97p.

But why would any fiberweb holder vote to accept this board's recommendation to accept a bid at least 20-30% below any reasonable valuation calculated on that same board's own mid-term estimates that they also claim they are confident of meeting? Or, why accept a bid so much less than Petropar paid, and worth even less than Avgol were offering when Fiberweb was in a real mess and could even have gone under!

Apart from a bidding war (some other rivals - any ideas who??? - must be at least watching this or even some plain money men who can see the assets alone are worth more than PGI's bid!) the best outcome is if a bid is received and voted down - a show of confidence by shareholders in the business even if that could leave the board in an awkward position.

Still, even at this point in the proceedings, anything could happen with this crackerjack nutcase of a share.

[boonboon] 17/9/2013 13:55

I hope it doesn't go through.

[royaloak] 17/9/2013 13:46

The price suggests the deal will go through, fingers crossed!

[bearbully80] 13/9/2013 15:24

... so no offer yet, and nobody else asking to see the books.

To everybody complaining about how low the offer is: what do you think will happen to the share price if PGI waits until 4:59PM on Tues and says, "sorry mate - we don't like the colour of the rug in your downstairs toilet"?

What a great way to legally screw your competitors!

have a good weekend

[inntolife] 12/9/2013 09:52

Thank you sharw
:-)

[sharw] 12/9/2013 09:22

At the moment it is just a possible offer. Under takeover rules the 17th is the last day for a formal offer to be made. If it is made there is a whole process to be gone through and you will be asked if you want to accept or not. If enough people accept they will receive the cash. When only 10% of the shares remain they can be bought out compulsorily. If not enough accept the offer will lapse.

[inntolife] 11/9/2013 21:46

Help please with stupid question time?

if the offer of .97#5p is accepted on the 17th what would happen to the few shares that I own and also the shares that are in my two boys CTF's

Thanks

PSD

[bearbully80] 10/9/2013 17:25

cheers. I don't blame you for ignoring those, even though some disclose trades of over a million shares. All that matters, with a week to go, is whether PGI offers enough for the board to convince holders to sell. Otherwise, if the company can start making money in its current shape earnings of 12p-17p per share don't seem far fetched and at a very low multiple of 10 that is still much higher than 97.5p.

[sharw] 10/9/2013 15:46

In addition to advising FWEB Peel Hunt is also a broker:

www.peelhunt.com/Content/Execution-Services

Each day it will deal in shares including FWEB so in the interests of transparency the PTM rule 8.5 requires any dealings to be declared, so you will get one of these most days. I don't bother to read them and some RNS providers (e.g. Investigate) don't even list them.

[bearbully80] 10/9/2013 09:48

does anybody understand all these RNS with Form 8.5? Why is Peel Hunt still buying and selling when they are Fiberweb's brokers? Why would anybody sell at 95p or buy at 98p? stick head in the sand now ... just wait?

[joshuawu] 08/9/2013 15:14

Disclosure: I hold Fiberweb shares for the long-term because of their dividend policy, quality of business, brands, products and experienced and proven management, the safe looking value in the shares based on their post-hygiene-divestment balance-sheet, sensible and realistic looking targets and improving prospects, Avgol's 100p offer some time ago even when Fiberweb was in a very poor health back then and what Petropar recently had to pay for part of Fiberweb's hygiene business which was 30% more valuable already than the offer PGI have been invited to deliberate on.

If I am permitted to offer an opinion using such a pseudonym here (otherwise, moderator, please delete), I may begrudgingly accept an offer of
97.5p + 15p.
The 15p covers the money from shareholders for a right's issue which annihilated the 107p share price at that time, and, also includes the upcoming dividend.
Already 112.5p is a bargain for asset-stripping or integration, like PGI could do or other competitors, or some investment experts. Below this level, it is not even a serious proposition when compared with revenues (175p per share PER ANNUM) or assets (today's NAV 100p).

[bearbully80] 04/9/2013 10:20

Exactly! Nobody knows what might happen next - that's actually the point isn't it?
If the business progresses in line with the board's own stated sentiment and targets (and they will be rewarded with plenty more shares again for achieving these fairly unambitious goals - like returning to half acceptable profit margins), then, even with an unambitious, 8% margin, which is the low end of their mid-term margin target, set some time ago, of 8-10%, FWEB is easily worth quite a bit more:
For example , even only
(8% margin * 300m sales / 174m shares) * a tiny PER of 10 suggests 138p!!

I would have thought anybody with a couple of hundred million pounds to invest can do these sums, but perhaps only PGU have bothered, so far!

If PGI do pull out and Fibeerweb's management do not achieve even 8% margins on these beautiful 300m sales (not to mention all that lovely 15m cash in the bank at their disposal to grow the business and make it more profitable) then the market could punish them severely (as it has in the past), and a 15% drop, or more, back into the early 80s is a distinct possibility, by my calculations. It could be worse too if they continue to fail to make a reasonable profit from such a great business with strong balance sheet and excellent products (existing and, they say, new), strong and increasing sales revenues over 300m, R&D and prospects!

I can't help feeling that eventually a takeover, by PGI or someone else with a more palatable offer is the best outcome for Fiberweb's future as a long-term, growing business with a lot of potential, and this may also be best for Fiberweb's current management. But 97.5p, by my calculations, looks really cheap.

[bearbully80] 03/9/2013 20:44

i hope this doesn't sound childish but do you lot think Fiberweb's share price will be higher or lower than 97.5p in early 2014 if PGI's current offer is rejected by shareholders and no counter bid actually materializes? What if PGI don't bid?

[bearbully80] 02/9/2013 13:55

I thought there were a few higher than that since August 20th, sharw.
Either way, add .5p stamp duty to your 98.255p and a couple of quid for trading costs and they still lose money at the PGI offer plus dividend 98.7p.
I am not surprised if people do expect a better price when you consider what Fitessa paid for the less attractive half of the business and, strictly from a financial perspective, the value Fiberweb would achieve if somebody could squeeze 8-12% margins from the steady >300m sales.
I think somebody is bound to notice this before it's too late. For PGI's bigger competitors (Avgol, DuPont, Freidenberg, Ahlstrom...) it may be worth paying 200m (1.35) just to stop PGI getting such a huge business advantage.
On the other hand, maybe nobody else can be bothered and Blackstone pick up a genuine bargain and make a fortune. That's the way it goes sometimes.
We will soon find out@

[sharw] 02/9/2013 13:34

The offer price is 97.5p - add the 1.2p dividend and that is 98.7p. As far as I can see the highest trade was 98.255p (400 shares at open today) so I cannot see that "people buying above" - post 2377.

That said, it is early days and a counterbid at a higher offer is a possiblity, particularly as the one on the table is not that generous.

[bearbully80] 02/9/2013 10:53

that seems to be the general feeling boonboon, amongst the more vocal holders and commentators anyway, but the problem is nobody knows who can make money out of this business. With 300m in sales (almost 2 times PGI's offer, incidentally!) somebody must be able to make 20m-40m a year on those sales, which would probably value the shares 140p-200p. It's a good solid business, with room for innovation, effciiencies and improvement and plenty more cost savings, not to mention plenty of cash in the bank (can you imagine a business liek this withh nod debts?)!
Another interesting point is that BlackRock are money men, not industry experts. They bought PGI to make money. And, they now see they can make even more money by adding Fiberweb. But there are plenty other money men out there too, and they may suddenly wake up now to the fact that Fiberweb has a great balance sheet these days and an increasingly attractive PnL with margins improving too. There are also a few big existing shareholders that must be thinking they can get more than 100p for their shares. SSVL have over 10%, and they are apparently aggressive and proactive in such situations, whatever that means!
Like boonboon may be implying, it is easy to be inclined to believe this is far from over and the next 2 weeks could see more action - and, as you say Kombimatec, there are some still buying above 97.5p, so we are not alone in asking these questions of the price being offered!
Some may want at least 140p per share, especially after what Fitessa paid for the disposed half of the business (including huge debts!), but others may accept 120p after the ride this has given them over the last few years (230p to 25p to 100p to 50p and now back to 100p).
It's almost going to be sad when this is all over, LOL!