M.p. Evans Share Discussion Threads

[ed 123] 25/11/2016 13:16

Hi Tonysss13.

You must be good to operate as day trader. :-) I've been buying and selling for about 30 years but I wouldn't be able to work profitably as a day trader. My aim is to keep moving to (what I judge to be) better places, usually several months timescale, sometimes years. It goes wrong occasionally but mostly I'm ok. MP Evans has been a good one for me - quick and a good percentage uplift.

Another 2 weeks to go till the vote here. Still time for a recommendation.

[tonysss13] 25/11/2016 12:56

Ed

I don't hold any as i'm a day trader

There are many examples of companies that have rejected offers due to undervaluation of the share price, that have never regained that level again. MCHL being a good example of a board not acting in the best interest of shareholders.

I think it's quite telling there has been no increase in the shareholders not supporting the offer (albeit unbinding). I expect it will succeed here as you say, or maybe even a recommended offer with a bumb, although if it's a small one the board will look pretty daft given the valuation they have just put on it.

[ed 123] 25/11/2016 11:34

Ta, Tonysss13.

Had a quick look.

Basically, the Board are saying the assets are worth 1082p but the KLK offer is only 740p per share.

These figures are more or less to my expectations, so nothing changes for me.

The shares were around 420p before the first bid. Holders now have a chance to exit for 740p and KLK could gain up to 342p per share in asset value (assuming valuations are accurate and excluding KLK's costs of acquisition).

It seems fair enough to me. I am grateful to KLK for bringing out more value in the shares I hold. The Board didn't do this. Indeed, one member of the Board was selling for around 400p.

I intend to accept the offer.

[tonysss13] 25/11/2016 10:55

here

hxxp://www.mpevans.co.uk/mpevans/dlibrary/documents/rejection-document.pdf

[ed 123] 24/11/2016 12:47

Yes, it is due soon and its non-appearance to date suggests that the two sides are still talking. That's good.

If an updated defence is produced I'd guess it will take the share price down a bit further. Ironically, a belligerent defence document may push more holders to take the 740p?

For me, the future gains from rejecting the bid are far off and inevitably carry some risk. Why gamble?

[rfcg1] 24/11/2016 12:36

Let's wait and see what the directors say in their more detailed defence document which must be due shortly.

[ed 123] 24/11/2016 10:21

I intend to accept the 740p. To me, from where the shares were a short while ago, it's a generous offer.

I don't know how the directors can take this stance. One of their number sold 5,000 shares for 410p in June and 15,000 shares in July this year for 400p per share. How can he now say that 740p "... very substantially undervalues the Company ..." Also, at say 420p, the directors must then have thought the shares were absolutely ridiculously undervalued by the market .... but how many of them were buying these crazily cheap shares? Answer? .......... None!!!

Important to note, those institutions that joined the rejection statement do not bind themselves to decline the 740p. If there's no more offered, they could easily flip to the "accept" camp.

Fwiw, if it goes to the vote at 740p, I'd expect KLK to win. I can't imagine the directors keeping their jobs if that should happen.

[nocton] 24/11/2016 10:00

I find this situation curious. The directors of MP Evans sold off the Australian cattle interests which surely they must have know made them more likely to be taken over by a Malaysian or Indonesian plantation group? Now the expected bid has valued MPE at a much greater value than ever before achieved in the market and they are playing hard to get. And the share price remains substantially below the offer price, so many must think the bid will not go through otherwise it is easy money for the taking. Last night I was rung by KLK's bank/brokers asking how I was going to vote my shares. This suggests that the voting is close and that the private share holders may tip the balance. In the note from Edison MPE are said to have 41% of shareholders, well below what they had for the lower offer. I have not yet decided what to do but am tempted to accept.

[ed 123] 18/11/2016 11:34

Offer document at 740p released today.

Fwiw, I would expect KLK to win at this price. I can't see those institutions which said 'No' to this increased offer voting against it. Would they really walk away from a 77% premium? Not to my mind.

[exbroker] 17/11/2016 10:40

My sources say arb activity in MPE yesterday and today…interesting!
55.7M shares in issue looks like an arb bought them, as I have said all to play for!

[ed 123] 17/11/2016 10:32

Thanks for the clarification, Tonysss13.

169,494 shares sold in the market for 700p a few minutes ago.

Significant because it's a fairly big holder who is saying, 'That's enough for me.' Also, if it comes to a vote, that parcel of shares will amost certainly accept the 740p offered.

If we see some more rolling over it will add pressure on the board to recommend.

[tonysss13] 17/11/2016 10:12

Exbroker thanks

I have just read the relevant part of the takeover code and it seems I am wrong, it was amended in September so maybe it has changed since and maybe because of the AZN debacle.

I guess it all now really hinges on whether the board are willing to engage at all otherwise the vote is going to be tight

[ed 123] 17/11/2016 09:52

Hi Tonysss13 and Exbroker.

Helpful comments. Ta. :-)

There has to be enough gain for the bidder or what's the point? The shares were languising in the low 400's before the interest of KLK. From a starting point of, say 420p, if shareholders get 740p per share and KLK make another 260p, then is that so bad? Speaking for myself, that would be acceptable. It's likely that JP Morgan and FIL have taken the same view.

I am encouraged that the recent dip to 670p (?) was bought up again, and there is some price strength this morning (though volume is small).

Well done, Exbroker, on your 615p buying - a bold move that paid off.

I'm still holding all of mine. I think there will be a recommendation - but that's just my view.

[exbroker] 17/11/2016 08:45

Hi tonysss13 and Ed
Just to clarify a few technicals, the offer can be raised with the recommendation of the board, clever tactic from KLK as this will now force the board to name a price. It can also be raised if another bidder appears. There is much research out there about how much per HA the plantations are worth on the value of the bid, don’t forget on my calculations the cash on the balance sheet and the various property assets are worth about another 100p per share. If there is to be a recommendation, then I suspect given how vocal the board have been in rejecting the bid at 740 it would have to be at a much higher level. If KLK are serious they will raid in the market, that will focus the mind of the board. Intentions are not binding only irrevocables are, all to play for.

[tonysss13] 16/11/2016 22:54

Hi EdYes I saw that but I think that under takeover panel rules they can't once they have used the word final . I might be wrong but the board seen to be of that opinion too.The other consideration is any sizeable holding via CFD who won't have voting rights . I wonder if we will see any converted into real shares as recently happened with Elliott & Poundland

[ed 123] 16/11/2016 18:45

The KLK offers allows them to increase their price if such increased amount is recommended for acceptance by the MPE board.

So, might get a face-saving 10p extra, ie. recommended 750p per share. (Just my own thoughts, of course. I've no connection with any of these parties.)

[tonysss13] 16/11/2016 18:35

btw I am not sure if they can announce an increased offer due to takeover rules now even if recommended by the board because they have stated final offer, didn't Pfizer fall foul of that one with AZN?

[ed 123] 16/11/2016 16:07

Another support of rejection rns today. This one is noteworthy for the absence of JP Morgan and FIL. Together they speak for 8% of the equity. So, it would appear that some institutions could be switching sides.

This time the letters of intent only total 40.85% of the equity. That's down from 54.72%. Looking at the wording of the confirmations, they are only intentions and leave room for the holders to switch sides.

My view .... if it goes to the vote at 740p without a recommendation I think KLK would win. KLK only needs >50%.

[tonysss13] 16/11/2016 14:47

exbroker, they can't get it to £8 as its a final offer, unless another bidder steps in which looks unlikely given the premium already offered

over 40% already said no

[exbroker] 16/11/2016 07:20

You only need one of the big holders to crack and then the preasure is on the board. If they can get it to 800+ then they will have done a great job for the familys and the other shareholders. Interesting not much arb activity so far in this one suggests they are not sure it will go through, we will see.

[ed 123] 15/11/2016 12:06

Yes, KLK seem keen to get that recommendation. If a recommendation is to come there has to be a bit more offered (unless the major shareholders shift).

I'm not greedy here; even another 10p and a recommendation would see me delighted.

My own guess from this point in time is that the major holders will nudge the board and an agreement will be reached around the 770p level.

No rush for now. I'll sit and see what happens next.

[exbroker] 15/11/2016 11:16

May not be all over yet, they can raise the price if the board agree the deal, market price suggests that it will fail, I think nearer 800 they will say yes. Very happy with the ones I bought at 615!

[ed 123] 15/11/2016 10:50

Ha! Another £1 per share offered. Timed nicely for me. :-)))

Still the board haven't given a recommendation. So, I guess KLK are appealing to the major shareholders, bypassing the board.

Hmmm ... that extends the acceptance period, so I can wait a bit longer and see if a recommendation comes along.

[ed 123] 14/11/2016 12:40

Yes, all to play for ........ but it's approaching decision time for me.

Holding some in a nominee account with their date for notifying my wishes, Wednesday, 16th November.

Has anyone got the date for acceptance from the offeror? (It'll be later than 16th.)

I had hoped to see a higher offer by now. Fwiw, level 2 looks evenly balanced atm, at 627p mid. It seems there is no selling pressure or buying pressure; a continuation of the vacuum.

There may be a last minute move and an increased offer but my decision is likely to be made ahead of any such move.

No complaint from me; it's just the way the system works.

Maybe I'll sell in the market? I'm sitting on a c. 50% uplift and only bought fairly recently.