Kentz Share Discussion Threads

[rochdae] 19/8/2013 14:38

Well, I've sold and taken a nice profit. No doubt further value to be had, but these things can take a while and you never know. Good luck though ....

A lesson to be learnt here I would say. Good value always attracts...

Roch

[spob] 19/8/2013 14:22

People who think an offer of 750p would be attractive need to remember that such an offer would actually be quite opportunistic.

It's not that long ago that oil service companies traded on PE ratios of around 20.

At the moment the valuations of oil service companies are depressed because of problems with companies such as Lamprell.

This is why I hold KENZ. I would be quite happy to see any opportunistic bid at these depressed valuations lapse.

I'm happy to wait for KENZ To return to multiples of around 20 again.

[minimal] 19/8/2013 14:03

Seems like the big sell of is slowing down now. I think we can make 590 close.

[wylecoyote] 19/8/2013 13:53

Thanks, just wanted some new ideas... of course I only ever do my own research...

[whizzy1] 19/8/2013 13:50

Tullow Oil (from way back) TLW
Fidelity China Special Situations Fund (High Risk but trending North after 3 poor years) FCSS.
Obviously do your own research, I'm in it for the long term.
I won't be selling KENTZ either 500% up in 5 years or so? Well what about the next 5-10?

[wylecoyote] 19/8/2013 13:35

Whizzy,

I only wish I had plenty more readies, then I would have taken another small punt at 570.00p. Still, you mentioned the NT, I haven't read his articles for a short while. Other than ETO and DIA, what else are you interested in? Don't worry, I am not going to jump in. I just would appreciate some fresh ideas...;-)

[whizzy1] 19/8/2013 13:24

You can guarantee Robbie (Naked Trader) will be jumping through hoops this morning. We both bought them at the same time & have been topping up and top slicing ever since.
P.S his seminars are well worth it too.

[whizzy1] 19/8/2013 13:21

AD it was as near to dam it (£5) is to swearing lol
Over 4000 comments on here and I remember it being very quiet from day 1, but I've read every one.
I stand by my call of £6.50 AMEC are trying to lever in before results which as per usual, will be superb, adding even more value to the Co.

[pmdf] 19/8/2013 12:50

It was inevitable that the value in this company would be recognised one day. Very pleased for all shareholders on here to see our patience rewarded.

[fangorn2] 19/8/2013 12:26

MGW at VSA Capital comments as follows on Amec bid....

"First thing is not to sell any shares at these levels, I know some people might be tempted but despite having reached out target price there is much to go for both on trading grounds as well as bid valuations.

On trading grounds I expect more positive news when the interims come out next Tuesday but recent trading updates have been only positive, expect that trend to continue. I was lucky enough to have a couple of days on the road recently with CEO Chris Brown and the institutions we visited were extremely impressed.



As a bid candidate things change dramatically in terms of valuation and I am not surprised to see the Kentz board summarily despatch the indicated bid of 565-580p without having to think too hard about it. At the current price (573p), the shares are on a P/E of 13.5x for this year and 12.3x for next year, hardly dear given the order book and prospects and below the Amec multiple as well so any deal would be likely earnings enhancing from that point of view.



Don't forget that Kentz has a handy cash pile, forecast to be $270m at the year end, of which their 'own cash' will be around $220m which they are planning to use on acquisitions, any bidder for Kentz at the moment is getting 30% of the market cap in cash, very handy for Amec for example. Strip out the cash and the rest of the business is in for not very much.

We know that in addition to the announced 'indicated' bids from Amec and M&W Group there are likely to be other interested parties out there, not an exclusive list but perm any from CB&I, Fluor, Bechtel and even Jacobs and of course relationships with Halliburton and other engineers/service companies are very good.



According to all these bits and pieces I would think it criminal if Kentz were to go out for anything less than 750p, I am quite surprised that the shares haven't gone higher still this morning, maybe the arbs and hedgies are on holiday and there's me who always thought that money never sunbathed. The stock is still a BUY."

[adamb1978] 19/8/2013 12:25

Wylecayote - yes they would have a net debt position if they returned some cash but only a minor one and nothing remotely problematic. In fact, it would be far more efficient for them to do so

[dr_smith] 19/8/2013 12:23

I believe any co can buy another co's shares on open market, provided there is no monopoly concern - which isn't the case here.
Looking at an offer, rather open market route, I'd be interested to know whether the board can themselves make a decision, I would guess they can only make a reccomendation to shareholders who then decide for themselves.
Having said that, it seems from todays anouncements the directors are empowered to decline offers without reference/approval of shareholders.
Anyone know the general legal position on Directors powers to accept or decline in general?

[mamcw] 19/8/2013 12:09

I think I'm going to wait and see how this develops. The value in M&E companies is the long term framework agreements that they have with major customers; once you are in, unless you mess up, you tend to stay there. Conversely, it is hard to break in as an outsider. Kentz's value is its relationships with these major customers, which has translated into an ever growing forward order book.

Reading between the lines of the various RNS announcements today, it sounds like the board of Kentz doesn't want the company to be acquired, but having already attracted the interest of 2 bidders, it will now reluctantly be looking for the one (possibly a third) who they feel is the best fit.

[fruitfly2] 19/8/2013 12:05

Whizzy1 - Are you sure you've never been wrong?


Whizzy1 - 17 Jan'12 - 10:51 - 2189 of 2252

I'm making a call! Over a fiver by Monday the 30th & I've not been wrong since the IPO!

[wylecoyote] 19/8/2013 11:48

Adam,

wouldn't they then have a net debt postion?

[adamb1978] 19/8/2013 11:43

Would be nice to see KENZ announce some sort of defence via a large return of capital to shareholders. 117m shares in issue - they could return £2 per share to shareholders (£234m or a bit over $350m) to help convince us that they dont need to sell the company in order to make a return

Would prefer to see that than for them go out and over-spend on an acquisition

[minimal] 19/8/2013 11:43

Yes thats what I was thinking. 30% of trades are still initiated with buys, if you believe the trades data.

[wylecoyote] 19/8/2013 11:31

minimal, I mean the current share price There appears to be buyers at the top end of the offer price. This is obiviously conjecture, I have never been through a bid process. The fact that there are buyers at this level suggest to me that they think there is more to come????

[minimal] 19/8/2013 11:28

WyleCoyote - you mean current price = lower valuation?

[wylecoyote] 19/8/2013 11:27

it looks like the market doesn't agree with the initial valuation.

[revoman] 19/8/2013 11:20

Don't forget that the press articles have also said "SNC-Lavalin Group, Canada's largest engineering company, is also said to interested in the company".

That's a potential third opportunity which would make it surprising if others are not also at least looking. Interesting times ahead...

[a0148009] 19/8/2013 11:15

Whizzt1 If you mean never been wrong on Kentz I will give you that but surely not ever been wrong period!!

AO

[a0148009] 19/8/2013 11:12

Kerbet Ltd



AO

[whizzy1] 19/8/2013 11:05

This will go for £6.50
I've never been wrong yet.