Guinness Peat Share Discussion Threads

[aspex] 06/4/2011 10:34

js,
Progress on sales potential here.

[johnstonp] 06/4/2011 10:08

Directors change again !

[swiftnick] 03/3/2011 22:12

It looks like the company intends to make the initial cash return in July, but doing the sums it may not be as much as some were hoping.

From the final results announcement:

GPG intends to make a capital return to shareholders of at least GBP75m (NZ$158m / A$120m). The capital return is expected to be implemented via a Scheme of Arrangement. Under the Scheme of Arrangement, each GPG shareholder will receive a cash payment in return for a cancellation of a proportion of their GPG shareholding. The capital return will be subject to the usual regulatory approvals including from the UK Court, Shareholders and taxation authorities.

GPG intends to send a Scheme Circular to shareholders, in advance of its AGM, subject to receiving prior UK Court approval. Shareholder approval will then be sought at the time of its AGM, which is intended to be held on 8 June 2011 in Auckland, New Zealand. GPG is working towards completion of the capital return by July 2011, subject to all requisite approvals being obtained, and will advise of further details in due course, including the cash payment per share, the number of shares proposed to be cancelled and the treatment of the capital return for tax purposes for shareholders.

There are currently some 1,818 million shares in issue, so a capital return of £75 million works out at around 4.1p per share.

Net Asset Value per share, as disclosed in the accounts, is 54.63p. At 37.5p the shares currently stand at a 31.4% discount. If 4.1p of cash is returned the discount theoretically widens to 33.9% (1-(33.4/50.53)). This assumes that asset realisations in the meantime are achieved at the balance sheet valuation.

The main risk factor, of course, is that as more assets are realised the company becomes increasingly dependent on the success of Coats, which the company has indicated is not yet ready for disposal. To quote from the accounts again:

As part of the orderly value realisation, GPG's investment portfolio may be reduced to the point where an investment in GPG becomes a pure exposure to Coats.

I'm not sure how many of GPG's current shareholders are looking for a pure exposure to the industrial thread and crafts market. Many will be on the share register out of historical personal loyalty to Sir Ron Brierley and his deal-making skills. With Sir Ron now out of the picture and future acquisitions ruled out there is a danger that some shareholders will get bored and want to move on. This might be a worry were it not for that big discount to NAV. In my view this is enough to make the shares look a strong hold at current levels in the expectation that the discount must surely narrow as the asset realisations progress.

[johnstonp] 25/2/2011 11:11

good results and an orderly disposal programme
looking forward to cash return within 12 months

[johnstonp] 11/2/2011 10:05

at least shareholders will see some value now, and a cash return

[nod] 11/2/2011 03:51

I guess this is quite complex given the different tax laws of its shareholders. I guess also there are a lot of adviser fees involved in divesting investments.

[aspex] 11/2/2011 03:22

GPG Announces Strategy to Realise Value

- GPG to undertake an orderly value realisation of GPG's investment portfolio over time.

- As part of the orderly value realisation, GPG's investment portfolio may be reduced to the point where an investment in GPG becomes a pure exposure to Coats.

- Cash proceeds from the orderly realisation of investments to be used to pursue capital management initiatives.

- GPG to undertake an initial capital return to shareholders of at least 75m (A$120m / NZ$158m) in the 2011 calendar year, subject to shareholder, tax and other approvals as necessary to effect the capital return. GPG will provide further details once the form, final amount and process of the capital return has been determined.

- GPG Board is conducting a search to seek to appoint a senior executive to implement the orderly value realisation strategy.

- GPG to hold AGM in June in New Zealand.

The Board of Guinness Peat Group plc ("GPG") today announced its strategy to optimise value for all GPG shareholders. This follows a recommendation to the Board by an independent sub-committee which was established in September 2010 and comprises GPG non-executive directors (Mr Mike Allen, Mr Rob Campbell, Mr Mark Johnson AO and Mr Gavin Walker).

The focus of the independent sub-committee has been on evaluating options to enhance GPG shareholder value, recognising that GPG shares trade at a material discount to net asset value (currently in excess of 30%).

As part of its evaluation, the independent sub-committee identified a number of issues with the current GPG business including:

- a large, complex and geographically diverse portfolio of assets, including a mix of minority shareholdings and wholly owned businesses (including Coats);

- a lack of value transparency with a number of unlisted investments, the largest of which is Coats;

- a disappointing performance in recent years; and

- a number of actual and contingent liabilities, including capital notes, pension liabilities and potential payment of a European Commission fine, some of which are uncertain as to the timing and quantum of liability borne by companies in the GPG group.

Following an evaluation of a broad range of options by the independent sub-committee, the Board of GPG has adopted the recommendation that GPG pursue an orderly realisation of its investments over time.

The recommended strategy for optimising value consists of the following key elements.

Pursuing an orderly value realisation for GPG's investment portfolio over time

GPG has an investment portfolio with a market value of approximately 610m (A$978m / NZ$1,282m) as at 30 September 2010 (unaudited, excluding Coats) consisting of investments in listed and unlisted businesses in jurisdictions including Australia, New Zealand and the United Kingdom.

An orderly value realisation will be pursued over time with the aim of exiting GPG's entire portfolio of investments and, in the process, generating cash proceeds that can be used for capital management initiatives. GPG will seek to exit individual investments in an appropriate investment timeframe for each investment which optimises value for GPG shareholders. The Board believes that attempting a short-term realisation of all of GPG's investment assets is unlikely to be optimal for shareholders relative to a strategy of orderly value realisation over the medium term.

GPG will also evaluate opportunities to sell groups of assets if this is considered value-enhancing for GPG shareholders.
GPG will discontinue new investment, although it will contribute capital to existing investments if this is viewed as value enhancing. GPG's strategy of an orderly value realisation for its investments will not impact the way GPG deals with companies in which GPG is invested.

Executive Directors Gary Weiss and Blake Nixon commented: "We will continue to work closely with investee companies to enhance and extract value."

In conjunction with the orderly value realisation strategy, the Board will simplify GPG's overhead structure and reduce overhead costs.

Coats

Coats is a business with a number of attractive features including a global manufacturing platform, strong international brands and customer relationships, and significant exposure to growing Asian markets.

Coats was adversely affected by the global downturn in 2008 and 2009. However the business has since improved and the benefits of the extensive restructuring programme, which is now substantially complete, have begun to materialise.

As part of the strategy of orderly value realisation, GPG's investment portfolio may be reduced to the point where an investment in GPG ultimately becomes a pure play exposure to Coats.

During the orderly value realisation process, GPG will continue to evaluate this and other alternatives for realising value for Coats. As Coats' plans for profitable growth are achieved, there will be greater opportunities for value optimisation. The Board of GPG fully supports the Coats management team and their plans.

Capital Management

GPG is in a strong financial position with shareholders' funds in excess of 930m (A$1,491m / NZ$1,954m) and cash in excess of 170m (A$273m / NZ$357m) as at 30 September 2010 (unaudited).
GPG intends to use existing cash and the cash proceeds generated by the orderly realisation of investments to pursue capital management initiatives including returning capital to shareholders. The quantum and timing of capital returned to shareholders will depend on when value is realised from GPG's investments and will need to have regard to the GPG group's actual and contingent liabilities.

GPG will undertake an initial capital return to shareholders of at least 75m (A$120m / NZ$158m) during the course of the 2011 calendar year, subject to shareholder, tax and other approvals as necessary to effect the capital return. The shareholder approval for the capital return is intended to be obtained at the AGM which will be held in New Zealand in June on a date to be advised. Further work is ongoing to determine the most efficient manner to effect the capital return, recognising the constraints imposed by multiple jurisdictions. GPG will provide further details once the form, final amount and process of the capital return has been determined.

Governance and Management Structure

Since the appointment of the new non-executive directors there have been a number of governance changes, including the appointment of Mr Mark Johnson AO as Chairman of GPG and the establishment of fully operational audit and risk, remuneration, and investment committees consisting of non-executive directors.
In addition to these initiatives, the Board believes it is essential to introduce a clear management structure with centralised leadership. The Board is conducting a search to appoint a senior executive, who will be responsible for the implementation of the orderly value realisation strategy.

Summary

Mr Mark Johnson AO, Chairman of GPG said: "We believe that the strategy announced today provides a clear path for the optimisation of value for all shareholders."

[nod] 01/1/2011 10:39

It appears that Bernard Whimp is behind a raft of companies mailing low offers to small shareholders in the hope that some have no idea of market prices.

This taken from an NZ web site:

l have received 7 offers from 7 different!!!!!! firms .

Chase Securities for Nuplex
Fairfield Securities for F&P Appliances
Cargill Securities forr Fletcher Building
NZ Investment for Contact
Pearson Securities for GPG
Energy Securities for Vector
Carlyle Securities for Telecom.

Mmmmmm! Address is the same for each one.

[aspex] 01/1/2011 08:02

js,
Pearson is just another front for Mr Whimp who has a very dubious past and he is trying to acquire a very minimal number of shares from the gullible.

[johnstonp] 31/12/2010 11:22

Times City Diary- Peter Stiff 31/12/2010

"Guinness Peat Group has won a reputation as an abrasive corporate raider and activist investor. Just ask the brewers Adnams and Young's what its like to have GPG on your share register. Wry smiles all round, then, at the news that Pearson Securities, an activist investor has made an "opportunistihc bid to acquire GPG shares cheaply"

[swiftnick] 13/12/2010 17:51

End of an era.

[nod] 13/12/2010 01:46

Sir Ron Brierley stood down from his role as chairman at the close of business on Friday, while remaining on the board as a non-executive director. Former Macquarie Bank deputy chairman Mark Johnson takes over as chairman.

[nod] 06/11/2010 03:03

I was just looking at the book value of the Maryborough holding as at 31 December 2009. It was £14m. If other investments are undervalued by a similar amount, the shareholder funds could be far greater than the £867m.

The interim results at Coats were also a great improvement.

[nod] 02/11/2010 01:00

I think we'll see a few more disposals like this over the next few months. M&A activity has picked up considerably which is good for GPG's exit plan.

[nod] 02/11/2010 00:55

A good 60% profit by GPG on its MSF shareholding.

Now Mitr Phol Thailand, Asia's largest sugar producer and the sixth-largest sugar producer in the world, has conditionally agreed to acquire 19.9 per cent of MSF from Ron Brierley's Guinness Peat Group (GPG) for $4. That's a premium of 46.5 per cent to MSF's previous share price of $2.73 and a premium of more than 60 per cent to GPG's average entry price of between $2.25 and $2.50 a share.

GPG still owns a residual stake of 4.6 per cent, having only weeks ago lifted its shareholding by a further 1 per cent to 24.5 per cent.

[nod] 25/8/2010 23:25

Better than expected profits from Coates will be a welcome relief for GPG shareholders. Sales up 15%.

"GPG's return to profit reflects earnings from Coats, which had net income of US$35.5 million, from a loss of US$8.7 million a year earlier. Sales jumped 15 percent to US$761.2 million and the manufacturing lowered its net gearing to 65 percent from 76 percent. GPG also benefited from a small profit from Capral, another long-time problem investment."

[nod] 29/6/2010 08:40

I don't know that many good non-execs would want to enter the fray. The directors are a bunch of very strong-minded individuals who have mostly been left to run the businesses and investments in their own territories.

Tony Gibbs must have anticipated the board's action, so what does he have in mind? He seems to have a bit of support in NZ but holds few shares himself (0.5%).

Tan Chin Tuan has built up a stake of 114 million shares (6.29%) and is now the largest shareholder.

Major Shareholders
Shares in issue:1818.6m 5p Ords

Name Amount % Holding
Tan Chin Tuan Ltd 114,427,086 6.29
Franklin Resources Inc 78,861,047 4.34
Accident Compensation Corp 77,969,925 4.29
Black Rock Inc 61,882,004 3.40
Suncorp Metway Ltd 58,097,227 3.19

Directors
Name Amount % Holding
Ronald Alfred Brierley 57,458,897 3.16
Gary Hilton Weiss 20,354,121 1.119
Blake Andrew Nixon 16,982,572 0.934
Ron Langley 1,968,000 0.108

[aspex] 29/6/2010 01:11

Cat amongst the pigeons here.
Only now are they going to appoint independent directors BUT how independent is at the call of Sir Ron.
What a shambles.

[nod] 29/6/2010 00:16

No surprise, the Board has axed Tony Gibbs. He didn't give them any choice really.

What is worrying from today's RNS is that GPG did not seem to have an exit strategy. Brierley's talk of complex company structures is disingenious. He has had years to prepare for the exit.

[aspex] 27/6/2010 09:24

Tony Gibbs tells it the way it is.
Ron is an endangered species that may not be worth any affort to salvage.

[nod] 27/6/2010 03:08

Tony Gibbs' statement to the stock exchange
Last updated 13:22 25/06/2010

Statement by A I (Tony) Gibbs

Tony Gibbs, Director of Guinness Peat Group plc (GPG), states that he has advised the Directors of GPG who had proposed the GPG Australia demerger that they should abandon the plan and that he believes a different strategic approach would be preferred by GPG's shareholders.

I have previously outlined my preferred strategy for GPG and have reiterated this to the Board in recent days. However previously, rather than take a firm stance against my colleagues I supported presenting the demerger proposal openly to shareholders to determine whether it was in fact a strategy that would be supported.

Following the announcement, it has become very clear to me that the GPG Australia demerger proposal does not have the support of many of our shareholders and would not succeed. Rather than spend the next 6 months investing time and shareholders' money developing this proposal further or seeking modifications, I believe we should abandon the proposal in favour of an alternative strategy.

The core elements of the strategy I prefer are:

*A material cash distribution to shareholders to be paid before year end;
*Implementation of a comprehensive corporate restructuring of the GPG Group to enable an efficient exit of Coats and future returns of funds;
*In parallel with this, prepare for a trade sale or flotation of Coats as soon as is practicable after the completion of its December 2010 financial year; and
*Following the completion of the trade sale or flotation of Coats the return of those proceeds to shareholders.

I have advised the GPG board of this strategy and believe a public statement of my view is important as I intend to engage with our shareholders to better understand their views over the coming weeks.

A I (Tony) Gibbs

[nod] 16/6/2010 10:54

GPG following through with its plan to dispose of assets and distribute cash to shareholders. Shareholders will probably get another special dividend some time after completion. It looks like we'll have to be patient though with "two years" being mentioned for a Coats float. I guess they will float it earlier if global markets pick up.

[aspex] 16/6/2010 10:37

So what will be the result?
"sum of parts"?
How will the value show up?

[nod] 16/6/2010 02:01

As mentioned in the first article, analysts on the news down under say the plan is because Gary Weiss wants to keep the Australian vehicle together and probably wants to lead this new company himself rather than sell the assets too early.

"The proposal to spin off the Australian assets is understood to have been driven by director Gary Weiss, who is reportedly at odds with fellow directors Sir Ron, Tony Gibbs and Blake Nixon."