Galliford Try Share Discussion Threads

[salver2] 29/5/2019 13:10

I’m bewildered how it didn’t go up like this yesterday

[our haven] 29/5/2019 09:17

I would expect to see a steady climb now in the share price over a period of months if the BOD do not mismanage the company as badly as they have in this period.

[sleepy] 28/5/2019 22:29

The offer was not for the entire company. It would have left just a construction company which may not be viable on its own

[salver2] 28/5/2019 21:57

Can anyone explain how this went up so little today. One would have expected a 20 percent rise not a 4 percent rise

[salver2] 28/5/2019 21:57

Can anyone explain how this went up so little today. One would have expected a 20 percent rise not a 4 percent rise

[sum493] 28/5/2019 21:38

if the directors had the guts to reject such a bid they'd better follow their claim by buying some big chunks of shares at what they consider 'bargain prices'!

[sleepy] 28/5/2019 15:15

How much are GFRDs borrowings?

[marky60] 28/5/2019 15:11

Presumably major Institutional Investors would have been consulted or can the BoD just reject a bid without reference to them?

[jaf111] 28/5/2019 14:12

spot on value hound!

[value hound] 28/5/2019 12:52

Bovis shares are certainly not as good value as GFRD's - but to call them grossly overvalued is overdoing it IMO.

Personally, I would far rather have received something in the region of £9 worth of Bovis shares per share for my GFRD shares. I would then have employed the expedient of selling them.

It's just about arrogance and jobs for the boys IMO - rather than extracting shareholder value at what would have been around a 66% premium to the prevailing share price

[careful] 28/5/2019 12:21

Bovis shares are grossly overpriced today and GFRD are hugely undervalued.

The value of these companies should be about the same, but the ,market has driven Bovis too high and GFRD too low.

Just look at turnover, profitability, prospects and assets.

GFRD should forget this cheeky offer by its former boss.
Odd isn't it that GFRD once tried to takeover Bovis.

We should hold long term GFRD will do well.
Too many old chums and insiders for comfort here.
It has a worrying smell about it.

[rat attack] 28/5/2019 09:56

Thanks JAF111

[jaf111] 28/5/2019 09:51

as i read it Bovis were offering £950m (+£100m debt assumption) for the non-construction parts of GFRD.........ok so in shares but that compares with a current market cap of around £600m for the whole of GFRD....

[rat attack] 28/5/2019 08:46

Why would anyone swap GT shares for Bovis pro rata? Is that not swapping one poor management team for another? Is this not extreme arrogance? Someone please tell me I am missing the point here !

[value hound] 28/5/2019 08:43

They should simply have said 'yes' IMO; it's vanity that makes them want to hang on rather than seeing real value extracted for those of us that own the company, i.e. the age-old dichotomy.

[salver2] 28/5/2019 08:40

Very surprised that this has risen only slightly it normally goes up and down about 5 percent on a normal day - very weird share this!

[jaf111] 28/5/2019 07:51

Fingers crossed that Bovis proposal will lead to other approaches....

[dr_smith] 28/5/2019 07:43

BVS RNS "for consideration of £950m together with the assumption of Galliford Try's 10-year debt private placement of £100m, with the consideration to be satisfied via the issuance of new Bovis Homes shares directly to Galliford Try shareholders (the "Bovis Homes Proposal"). "

Market cap per sharecast at 538.5 is £597.19m
538.5/597.19*950 = 856.6

Do you concur with my calculation? Puts the declined share price at £8.57.

..and
"submitted a revised proposal (subject to detailed due diligence) on 8 May 2019 "
so this is the second approach.

Sounds like parties were happy in concept, it was/is just down to price.
Also interesting that BVS sees value in construction, whereas consensus here and GFRD own BOD is that margin & risk ain't worth it - atleast under the "old" contract selection criteria.

I expect GFRD will be up this a.m. with opportunists grabbing some on the chance of a quick buck. Worst case is the status quo, so other factors the same, nothing to lose.

IMO.
Dave

[gabsterx] 27/5/2019 11:49

Quick DCF model using a pessimistic FCF for the next 5 years of 40 M (previous 5 year average was 55 M), a 1.5% terminal growth rate and required rate of return of 8% gives a fair value of 680p.

A more realistic but still conservative scenario using a FCF of 60 for the next 5 years with same metrics would give a fair value of 880p.

SO in both cases shares are trading at a big margin of safety (barring any unforeseen catastrophe), I doubt we will see 1200p+ any time soon but if we do it would be a good time to sell.

[dr_smith] 26/5/2019 18:46

Pre Aberdeen & Queensferry problems the market valued the company at between £10 to £15.
If we assume need for housing is the same and construction sector opportunities the same and GFRD stuck to the same future (pre review) then current value could be said to be that same £10-£15, less write down for any legacy (Aberdeen & Queensferry ) liabilities/legal actions outstanding.

We now have the review and ongoing decisions to change what is/was construction side of business. That should mean a higher value than the "old" GFRD.

So £10-£15, less contingent liabilties plus new direction value.
Lets say the undecided/unanounced new direction re construction would involve a 1 to 2 year transition.

My contingent liability/legacy cost calculation for "per share" offset:
"As discussed below under Construction, the Group has taken a further exceptional cost of £26.0m in respect of AWPR"
(Very quick calculation, I reckon that's 23p per share..anyone care to say if that's right ball park?)

So theoretical choices:
1) Sell now at 538.5p
2) Sell when share price goes up by say 50%, following offer, £8 in say 4 months time after talks, usual delays and approvals.
3) Hold for value of (£15+£10)/2 £12.50 average sp, less legacy hit 23p, plus value of GFRD changing direction on construction, that could materialise in 1-2 years.

I will go for option 3. :-)

All IMO.
Dave

[marky60] 26/5/2019 18:46

I think GFRD is now in play. Don't believe Bovis will let this one get away easily but, hopefully, other predators will come out to play over the coming weeks.All imho.

[warranty] 26/5/2019 16:37

The share price and company value is at near all time lows so it's probably no surprise that predators are about but surely that only confirms the value retained within the business. Even if BVS paid 50% above the current price, which I don't believe they would, I still think it undervalues Gfrd significantly. The Construction woes are a temporary problem which will be resolved over time leaving a very healthy company and I'm completely happy to wait for that to happen rather than sell out, or be sold out cheaply now.

[eeza] 26/5/2019 12:02

Absolutely. Puts GFRD into play.