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Foseco Investors - FOSE

Share Name	Share Symbol	Market	Stock Type
Foseco	FOSE	London	Ordinary Share

	Price Change	Price Change %	Share Price	Last Trade
	0.00	0.00%	295.00	00:00:00

Open Price	Low Price	High Price	Close Price	Previous Close
			295.00	295.00

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Top Investor Posts

Top Posts
Posted at 03/10/2007 11:56 by rivaldo Definitely worth hanging on I think - chances of a counter-bid or an increased offer quite high according to this (I'll paste it all as it'll disappear after today): "NH: in yesterday's session we have quite a few people commenting on Cookson and its proposed bid for Foseco NH: and there has been a pretty positive reaction from the market NH: shares up 30.5p at 825p HT: Foseco - makes stuff for foundries - casting and the like NH: yep NH: just to recap a sharp rise in the share price of Foseco saw the two sides forced by the Takeover Panel to acknowledge takeover discussions yesterday. NH: DD has started and Cookson has indicated that it is prepared to pay 295p a share if things go smoothly HT: And where are Foseco trading at the moment?? NH: down 2p at 278p HT: mmm - target down, poss buyer up? NH: i know it odds HT: why do the analysts love this deal then for Cookson? NH: well, it will make Cookson less dependent on the steel cycle NH: At the moment is biggest division, ceramics makes about 70% of its sales in the steel business NH: around 20% goes into foundry NH: If it were to buy Foseco that figure would rise and the Ceramics division would not be so exposed to one industry HT: OK. But I thought there were question marks as to how Cookson might fund this deal NH: there are. Here's how the maths work NH: at 295p, taking into consideration Foseco's debt the purchase price will reach £575m. NH: if cookson chooses to debt fund the deal then its gearing could rise to 150%. NH: Now that may unsettle shareholders HT: Why? NH: because they would be wary of the company taking on a lot of debt at this point in the cycle NH: the last time Cookson went on an acquisition spree it almost ended in total disaster NH: and I mean total disaster HT: Rock style disaster?? NH: yep NH: it bought a company called Premier Refractories for £410m in 1999 and by 2002 Cookson was nearly bust HT: So it looks like there will be a rights issued involved somewhere NH: I reckon there will be a smallish one, just to put shareholders at ease NH: On that note, should point that investors and analysts who follow Cookson have been with the company on a trip to their facilities in Poland NH: And I reckon there will be plenty of hand holding going on HT: any chance of a counter bid? NH: could be NH: Fosceo is the no1 in its field and any of Cookson's competitors such as RHI and Minerals Technologies, could be interested NH: actually I am told that MT has a strong balance sheet and could make a cash offer NH: And given that Cookson will not reap any massive cost synergies from the deal it may struggle to match a higher offer HT: right - let's see some of this comment then and move on NH: This is from UBS NH: We believe that Foseco's activities will be mainly complementary to Vesuvius given Foseco's strong presence in Foundry applications and Vesuvius' strength in steel making applications. We estimate that overlapping sales between both companies are of the order of c £100m and that Cookson could have to shed certain businesses where market shares become an issue from anti-trust point of view. NH: this is a bit of comment from Kaupthing NH: Clearly this is not a knock out price but one priced to give headroom to raise it and still be sufficiently earnings enhancing to Cookson but to ensure the management of Foseco are able to demonstrate to shareholders that they managed to get better value for the shareholders. The group has remained silent so far and they are clearly reviewing their options. We think that they will probably fight for a better price but are not fundamentally opposed to relinquishing ownership. NH: The possibility of a monopolies review appears to be the reason why the shares are trading at such a discount to the proposed bid price. However it is our view that Cookson want the foundry business and would like the Steel business. Having to divest of the Steel business would not be a deal breaker - note that Steel is expected to make c£4m of EBIT in 2008 vs total EBIT of £54m so it is barely material. The possibility of an increased bid and the high probability of success means that there should be further upside for the shareholders. NH: COOKSON - The momentum of earnings growth was slowing so the group need to do something. The balance sheet has improved significantly over the last few years and whilst working capital outflows in H1 weakened the H1 net debt position this should reverse in H2. Consequently the need for and ability to do a deal is clear NH: The combination of Foseco's foundry business with Cookson's ceramic business is an obvious fit and the additional benefits of the cross-over in the Steel business enhance the attractiveness of the deal. Assuming the acquisition is funded through debt and that the new debt carries a coupon of 6.5%, the pro forma debt for the enlarged group is c£720m. Assuming £7m of cost savings then the revised PBT to Dec-08 for the enlarged group is £183m vs £160m consensus - this represents a 14% uplift. The tax rate might be a slight issue as Cookson's rate of 26.5% is 10% lower than Foseco's NH: In the event that they are net able to get the tax rate of the enlarged group down to their existing rate then the EPS enhancement will be lower than 14%. In terms of debt this would represent c2.5x the enlarged EBITDA and just over 4x interest cover. Whilst the EBITDA multiple is within normal covenant ranges it is towards the high end in our view and we would not be surprised to see future disposals to assist in funding the deal if successful." Read Full Thread Reply
Posted at 09/11/2006 11:41 by quickmind - nimzoi, Good questions. For every seller there's a buyer. If the buyers are retail investors and the share price keeps falling, I'll get really worried. I don't know who bought those shares, but I guess it's not mainly small fish. (Gross) interest cover was 6.6 for 2005, and it was improved to 8.1 at the half way mark (c.f. H1 results published on 14 September 2006.) Lower gearing is of course preferred, but so long as the business is going strong and interest is well covered, Why worry? DYOR. Read Full Thread Reply
Posted at 27/9/2005 16:59 by grigor Foseco plc, a global leader in the supply of consumable products to the foundry and steelmaking industries, is today hosting a visit for analysts and institutional investors to its manufacturing facilities in Borken, Germany. Read Full Thread Reply

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