Kentz Share Discussion Threads

[stevemarkus] 05/9/2013 11:45

I think Brikho is quite smart - he's done an excellent job in turning Amec round.

Cheers,
Steve

[apad] 04/9/2013 18:09

I doubt there is a single AMEC employee who thinks Brikho is a dipstick - and I know a lot of AMEC employees - you can't say that about many companies.
apad

[lavalmy] 04/9/2013 17:16

Haywards

Very interesting article, thanks for bringing it to the board.

Brikho sounds like a complete dipstick in it. The quip about lines and points is inane, and tetchy. If acquisition number one fails, where is the line?

As to the 'excessive meetings', I take that as being due to the leak and who made it, so they are under the spotlight on that as well. I certainly don't recall analysts saying anything like the leak 'would make it less likely the firm would be dragged into a bidding war.'

I am not at all surprised that Kentz turned them down flat, and have probably gone out of their wat to avoid having excessive meetings with Brikho. They don't sound fun. Kentz has a culture, they get on with people etc, so I really don't see a deal, at least not with Amec. On the other hand, any dip post the 16th will be regained in short order, with expected acquisitions and contract wins.

In fact, I probably would be happier if a bid did not materialise so that I am not forced out a price which I don't think values the growth potential.

Cheers

David

[rhodmoney] 02/9/2013 21:53

No news is good news IMO. Negotiations must be going on behind the scenes.

[ohisay] 02/9/2013 09:15

Somebody who's a bit richer than he was last year.
(Bit like the rest of us on this board.)

[hatter2] 02/9/2013 09:00

Sorry 999 but who is Gareth Bales?

[999plunger] 02/9/2013 06:05

Just a final thought from me after the weekend. As you say Spob anything Amec says before the 16th is not worth printing UNLESS you are "In The Know" which I am certainly not. You can read all you like and assume all you like but only a few know what's really going on behind closed doors.
Talking about "In the know" which is certainly the case with Gareth Bales going, or not going, to Real Madrid or another "Undisclosed" club look at all the stories and ongoing this past few weeks. Yesterday Spurs Manager eventualy conceeding that he will now be going to RM.
The deal was done several months ago!!!!!!!! GB didn't want to leave Spurs or the green green grass of home. The business side of Spurs saw the huge financial potential and approaches were made to several european clubs. Real took the bait, as I previously said all this was ongoing months ago.
GB has said nothing as what ever he says will affect him negatively. He cannot speak the truth that he wishes to stay with Spurs. He cannot say he does not want to join RM - so silence reigns. The man who is selling him has not spoken to Gareth in months!!!!!! Mr Andre B-V is just a pawn in the game of the backroom giants. Let's see what Gareth says this week but no doubt there will be no negativity. Never belive what you hear or read guys!!!!!!!!! (Unles you are really in the know)

[spob] 31/8/2013 18:27

As I said early days.

Anything Amec says before sept 16th is not even worth printing.

[jeffian] 31/8/2013 00:49

If Amec had the balls, they'd put their offer on the line unconditionally and let the shareholders decide.

[haywards26] 30/8/2013 21:17

Another day, another City AM article

Kentz and Amec stick to their guns risking deadlock on deal

bySuzie Neuwirth

August 30, 2013, 2:29am
.

FTSE 100-listed engineering firm Amec's takeover approach for smaller peer Kentz risks heading towards a stalemate, as it emerges that both sides are unwilling to make the next move.

Amec is not thought to be willing to increase its offer before the 16 September put-up-or-shut-up deadline unless Kentz can show it can generate greater value, following first-half results that failed to impress.

However, City A.M. now understands that Kentz is not willing to give Amec access to its books unless it puts a higher offer on the table, creating a potential deadlock between the two firms.

Kentz confirmed earlier this month that it had rejected indicative offers from Amec and Germany's M+W, claiming they undervalued the firm.

Amec's offer was highest, valuing the company at 565p to 580p per share, equating to £680m.

NFU Mutual, a top 10 shareholder in Kentz, told City A.M that it backs the board's rejection of the two bids, as the "business continues to trade above market expectations".

Kentz posted a two per cent rise in revenue to $775.2m (£498.8m) and a 2.9 per cent increase in pre-tax profit to $52.7m in its half-year results earlier this week, but Amec argues that this is mainly due to a profitable Australian contract that runs out in a year and a half.

[jeffian] 30/8/2013 10:20

spob,

Nobody has made an offer for Kenz yet (see RNS - "the possibility of an offer") so of course they don't need to put up a formal defence at this point, but if things progress to the point where an offer is tabled, they're going to have to.

I got stitched up at recruitment consultants OPD which the Chairman took private at a ludicrously cheap figure having built up a commanding stake whilst the share price was on the floor. In discussing it with him at the AGM, he didn't disagree that it was opportunistic but said he felt entitled to do it "because the market let me." Same here (though if they'd followed his example, they'd have hoovered up 29.9% at under £4 and bid 450!). It was the use of the word "arrogance" I was picking up on - the Amec 'indicative offer' may not be the most bullish valuation but it wasn't a cheap shot either (which was why I posted the graph, 999plunger).

[999plunger] 30/8/2013 06:01

Great banter these past few days. Makes most enjoyable reading. It's all about sentiment - and perhaps sentiment swaying the major shareholders. I don't know about other shareholders but the NFU are very sensible in their approach to investments and I would listen to them rather than any other share holder except for Raz.
Don't know why we need to see a chart as we are all very aware of what is happening (or lack of it this past month). What formal and informal discussions are ongoing between Raz and Mr Brown is just conjecture as was a previous comment about an Amec -Raz meeting/discussion. As the eternal soothsayer said "Beware the Ides of September" take some profit now and don't get greedy. Don't expect the price to remain as is if eventually no realistic bid is placed on the company! And please don't ask me what a realistic bid should be. Why poor old Kentz has been laying low in the doldrums ever since Raz sold a bunch of shares I will never know but it's all down to this disease called market sentiment. Many Kentz employees were happy to sell on their shares at 400p recently!!!!!! If they don't have an "Inkling" on what was going on in their company then who does except for the big boys at the top. Mushroom syndrome for the Kentz workforce rules OK it appears.
Standing by for a fusilage of replies - well maybe one or two.
You guys keep smiling out there as there is always the posibility that a more realsitic offer from AMEC will/may? be forthcoming. (As long as it does not come out from my AMEC shareholding!)

[spob] 30/8/2013 01:47

Kenz have not solicited Amec or any one else - get it

So they do not have to demonstrate anything to Amec before September 16th


Amec have made a cheap opportunistic offer

and Kenz have already told them where to stick it

[jeffian] 29/8/2013 23:40

It isn't up to the management of Kenz, it's up to the shareholders, who will take the appropriate decision whatever management's "pressing desire". To be fair to Amec, the issue, as commented on this thread many times in the past, is that if the market keeps valuing the shares 'cheaply', someone will come and have a pop at them and that's exactly what's happened. Kenz has been trading in a range for nearly 3 years now and on the basis of the share price - if not fundamentals - the bid doesn't look at all bad.



"Kenz doesn't have to show anything." Well, yes it does. If anyone tables an unconditional bid, it has to show why we shouldn't accept it.

[spob] 29/8/2013 22:00

Kenz doesn't have to show anything.

Perhaps Amec in their arrogance, are forgetting that Kenz have no pressing desire to sell.

[haywards26] 29/8/2013 20:54

From City AM

Farmers' mutual backs Kentz in takeover battle

bySuzie Neuwirth

August 29, 2013, 1:43am

NFU MUTUAL, a top 10 shareholder in engineering and construction firm Kentz, yesterday backed the board's rejection of two takeover bids, agreeing the offers undervalued the company.

FTSE 250-listed Kentz, which this week unveiled an increase in first-half revenue and profit, rejected indicative offers from larger rival Amec and Germany's M+W earlier in August. Amec's offer was highest, valuing the company at 565p to 580p per share, equating to £680m.

"The Kentz results again demonstrate that this business continues to trade above market expectations," Nigel Yates, UK equity fund manager at NFU Mutual – which began life providing cover for members of the National Farmers' Union, told City A.M."We concur with management that the current indicated offer level is below the value that we feel the business is worth."

It is understood that Amec is not willing to increase its offer before the 16 September put-up-or-shut-up deadline unless Kentz can show that it can generate greater value. Kentz's shares closed 0.8 per cent higher at 569.50p yesterday, at the lower end of the range offered by Amec.

[haywards26] 28/8/2013 21:35

From The Independent

Bid target Kentz says it will win more global contracts

Nick Goodway

Wednesday 28 August 2013

Kentz, the engineering support specialist, has promised its shareholders it will win more lucrative contracts worldwide in the oil and resources sector.

The company has rejected a £680m indicative offer from Amec and a lower approach from Germany's M&W, both of whom have until 16 September to come up with firm bids.

Chris Brown, the chief executive, said: "We have had no other approaches and we have made clear that the two we did receive undervalue the business. There are no other offers in the house at the moment but if one were to come, we would evaluate it on the same basis."

Amec offered between 565p and 580p a share for Kentz, and the shares were down 2p to 565p yesterday.

Mr Brown said that while the Takeover Code prevented him from talking specifically about growth prospects or anything verging on a profit forecast, he was "excited" about the future.

He said: "Our current prospects, or work we have specifically bid for, is up 48 per cent at $6bn [£3.8bn]. And contrary to some people's view of the hydrocarbons sector, we are still winning business even in Australia, which is supposedly all over. We have an agile, decentralised model working in 30 countries and opportunities, whatever stage a project is at."

The company usually expects to win about a third of the contracts it bids for. It has raised the interim dividend by 20 per cent to 6.6 cents, and Mr Brown said that if it did not spend its $219m cash balance on acquisitions, it would look at returning some of that to shareholders, "probably early next year".

First-half revenues rose by 2 per cent to $775m, with pre-tax profits up 3 per cent at $53m. Headline profits before tax rose by 8 per cent to $55m while earnings per share were up 23 per cent to 33.25 cents.

Mr Brown dismissed reports there has been a falling out between himself and his chairman, the Malaysian businessman Tan Sri Razali.

[lavalmy] 28/8/2013 17:36

I have just looked at the various notes to the accounts and have calculated that, if they are correct about 12% revenue growth, it will be $1,750 mn against a restated $1,563 mn for the year. Given HI restated revenues of $771mn, that means a whopping US$979mn for H2.

[lavalmy] 28/8/2013 16:27

One thing that has not been picked up on from the interims is the revenue forecast of a 12% increase - there are no takeover panel restrictions on revenue forecasts similar to profit forecasts. Given that revenue growth for H1 was a mere 2%, that suggests almighty uplift for H2. The change in accounting treatment of joint arrangements makes it difficult to quantify thr profit effect.

If the offer period expires without result, I would expect Kentz to rebrief the analysts about the actual forecasts upwards. Add to that possible large contract wins and acquisitions, which will automatically be earnings enhancing, then I suspect that any price falls post-bid will be made up by year-end.

Indeed, I suspect some days that Kentz wanted to disclose the tentative offers in order to highlight the under-valuation.

[smudgeroo] 28/8/2013 16:05

Re: Extensions

TFL recently agreed to a takeover 11 months after the initial bid was announced following numerous extensions.

Completely different ball game here but long extension periods do occur.

[ohisay] 28/8/2013 15:20

Thats quite right .



The Panel said that the introduction of PUSU periods had successfully allowed target companies to control the period of "uncertainty and disruption" leading up to a formal takeover announcement.
Target companies may apply to the Panel for an extension of the deadline where necessary. According to its figures, the Panel extended deadlines following such a request on 15 occasions over the review period. It did not refuse a request for a deadline extension by the board of a target company during this period.

(But 630/650p would do it IMV)

[lavalmy] 28/8/2013 15:00

Adam

The panel has allowed extensions for a few months in certain cases, but in all cases the extension must be requested by the target company not the potential bidder. So unless AMEC put up by the 16th, they have to shut up for six months. I can't see Kentz agreeing to an extension unless AMEC significantly raise the price to the mimimum at which I think that Kentz would recommend an offer (IMO £7)