Melrose Industries Share Discussion Threads

[yertiz] 28/2/2018 18:23

Shame on you Meanwhile- you haven’t mentioned an extremely important subject. Have you deliberately chosen to ignore the subject or wasn’t it on your radar and you have been distracted by the ever increasing bulge in your wallet? FWIW, the answer is undoubtedly Sunderland.

[brexitplus] 28/2/2018 14:33

Yertiz. Agree.

While the bid would cost, if it failed I don’t see it as a big problem. Nortek is doing fine, and as you say, wait for the next opportunity.

The secret is not to overpay. Let others do it. And I’m sure Melrose won’t.

[brexitplus] 28/2/2018 14:17

Average broker forecasts from HL for February

GKN. 450p (7)

MRO. 250p (6)

[brexitplus] 28/2/2018 14:00

Losos, thanks.

Just been looking back to Jan for GKN. Mid Jan an article said many foreign companies looking at GKN Auto. Also Spirit interested in GKN Aero.

Yesterday’s formal announcement of splitting up GKN by mid2019 means it is “open season” on the constituent parts. Hence rising price.

Melrose also rising so could be rumours of an increased bid.

Whatever happens GKN will never be the same again.

[losos] 28/2/2018 13:52

MEANWHILE - I am keeping an open mind, MRO could still clinch it with tad more cassh, the big boys would probably go for that.

As others have said GKN split could be subject to a foreign take over, MRO need to emphasize their 100% British board and the desire to keep it together for at least five years before major splits etc.

meanwhile (lower case!) keep up the jollities, I like a bit ofgentle humour, Matt in the DT has been doing it for 30 years and I like him as well.

[meanwhile] 28/2/2018 13:00

I feel that the more 'respectable' reasons for MRO taking over ('rescuing a faltering business', 'unlocking the potential') are drifting away with the announcement of GKN's own plans, leaving only the less respectable 'shareholder value' to shout about.
Without the MRO bid, GKN's proposals may have put their share price up to 400p, although of course we wouldn't have got them in the absence of a bid.

In the interests of my own wallet, which by the way is already stuffed with cash, I hope it goes through but I'm beginning to doubt it.

[bukko] 28/2/2018 12:34

brexitplus

I think the MRO share price may be constrained by the prospect of bid failure. Being stranded in a high share price with Brush and Nortek might have limited appeal.

[bukko] 28/2/2018 12:17

grahamburn

I would assume that the market is cognizant of that and has absorbed it among other factors. I would prefer not to speculate around that and let the market decide.

[brexitplus] 28/2/2018 11:45

Bukko

Full article from 2010.

Nowadays, former chief executive Anne Stevens spends time job hunting and making créme caramel in the kitchen of her 13,400-square-foot home in this Reading, Pa., suburb.

Nine months after leaving the highest job at Carpenter Technology Corp. , she typically devotes at least three hours a day making calls to company executives, recruiters and professional contacts. A board member at Lockheed Martin Corp. and one-time Ford Motor Co. executive, Ms. Stevens faces a job market unusual in the exclusive ranks of top executives—but not unfamiliar to many Americans.

"There just aren't a lot of [CEO] searches out there," she says.

No one knows how many out-of-work CEOs are looking for corner office suites, but recruiters say their numbers are growing. Fewer big businesses are switching bosses these days and mergers and bankruptcies have further reduced their job prospects. Only 48 companies in the S&P 500 index changed leaders last year, the lowest level since recruiters Spencer Stuart began tracking it in 2004.

Replacement of big-business CEOs picked up in the second quarter, according to Spencer Stuart. But it will take more than a slight gain to find good homes for every unemployed chief. Just two of 13 major corporations switching leaders in the latest quarter chose an outsider.

Some boards are loath to change chiefs during economic turbulence, and the choppy recovery so far hasn't sufficiently heartened boards, recruiters say.

Big-company mergers have eliminated dozens of senior management jobs, too. Jonathan Schwartz, the former chief at Sun Microsystems, now owned by Oracle Corp. , and Todd Stitzer at Cadbury, now owned by Kraft Foods Inc. are among those hoping to be CEOs elsewhere. Mr. Stitzer says he has flirted with several mid-sized U.S. concerns about taking their helm.

"We have a much higher flow of former CEOs than we have seen in many years looking for a position again at the CEO level," says James G. Aslaksen, a senior client partner for recruiters Korn/Ferry International. He finds these job hunts can now last 18 months, up from no more than a year in 2005. Among major corporations, however, "the [CEO] opportunity pool is fairly small," adds Dennis Carey, also of Korn/Ferry.

Smaller companies have started to look for new CEOs again, recruiters report. But many former corporate chiefs want another big-company post.

Carlos Gutierrez, a former Kellogg Co. CEO who resigned as U.S. Commerce secretary early last year, desires to run a public company with at least $14 billion in annual revenue. He says he's spurned feelers about running concerns that he felt were too small, headquartered abroad or privately owned.

Chiefs with controversies on their resumes face high hurdles. Mike Zafirovski left Nortel Networks Corp. last August amid a dismantling of the fallen technology giant following a bankruptcy-court filing. He prefers to lead another large business and has prepared a detailed, two-page chart of his career financial-feats, according to someone familiar with the matter.

Mr. Zafirovski spent more than three years trying to turn Nortel around, but critics say he didn't move fast enough. Its bankruptcy hurts his job hunt, according to recruiters.

Ms. Stevens, now 61, was a first-time CEO when Carpenter, a developer and maker of specialty alloys, hired her in November 2006. The nursing-school dropout had received her engineering degree at age 30. She spent a decade working for Exxon Corp., then joined Ford as a business planner in 1990.

She eventually advanced to chief operating officer for the Americas, overseeing more than $75 billion in annual revenue. That made Ms. Stevens the highest ranked woman in the U.S. automotive industry.

She managed the Detroit auto maker's tricky vehicle recalls and plant shutdowns following the turmoil after September 11, 2001. Bill Ford Jr., Ford's executive chairman and previous CEO, says Ms. Stevens played a key role in crafting a North American turnaround plan.

Ms. Stevens even aspired to run Ford. Once she turned 57, however, "age was running against me," she recalls. "To go for my dream, I had to leave."

So eager was she to be a CEO that she took the first helm offered—at Carpenter. Its headquarters in her hometown of Reading, Pa., made the job even more appealing. As a result, she says, she "didn't probe deep enough" into its boardroom personalities, customers, products and operations.

"I didn't realize how much [Carpenter] lacked structure and systems," Ms. Stevens says. "If I knew then what I know now, I would have never taken the job."

Carpenter achieved record results during her first two years, as Ms. Stevens sold assets, enlarged melting facilities and shook up senior management. But profits and sales slipped in the fiscal year ended June 2009.

Ms. Stevens says she "found it difficult to build a close relationship" with fellow directors. The stressful situation often woke her up at night. Board members opposed her strategy to expand the company during the downturn, she remembers. In summer 2009, the board stripped her of the chairman's title. She soon quit.

Splitting the top roles "was an emerging practice," says Gregory Pratt, an outside director who now is chairman. Board members appreciate "the improvements she made in Carpenter's business" and she "was an excellent CEO," Mr. Pratt adds. He says Ms. Stevens never told him she had significant concerns about board communications.

As she seeks work in the U.S. or abroad, Ms. Stevens is getting assistance from Mr. Aslaksen and his colleagues. Boards needing a new chief often value a battle-tested executive like Ms. Stevens, suggests Mr. Carey, a Korn/Ferry vice chairman.

Ms. Stevens has also approached private-equity firms about leading a small portfolio company.

Despite her search, Ms. Stevens has yet to score any face-to-face interviews. "It is going to be a challenge" for Ms. Stevens to find another CEO post because the huge supply of potential chiefs enables boards to overlook "anyone who has any taint of controversy," says Judith von Seldeneck, head of Diversified Search Odgers Berndtson.

The unemployed chief executive keeps busy serving on the Lockheed Martin board, caring for a sick friend – and knitting afghans.

Yet Ms. Stevens was so sure her next corner office would require relocation that she put her French country-style home up for sale in November."I don't need a house that big," she observes. "I used the house a lot for entertaining while I was CEO."

[bukko] 28/2/2018 11:32

I read recently that Anne Stevens sold her house in USA to finance her way through university and Engineering Degree qualifications. Someone with the drive and determination to back themselves in that way and do a decent job at Ford should not be sneered at by some hot house plant in the FT.

Personal qualities may well be to the fore in her 2 year task.

[brexitplus] 28/2/2018 11:17

Hi Bukko

I think the reason is the Melrose offer price was £7.4 billion. As things stand Melrose would have to offer more shares, and people think the price will go up. Hence the slow divergence.

In situations like this it is normally the price of the target that rises and that of the bidder that falls As several people have said in the past, including me, we are surprised that the Melrose share price is so stable.

Melrose will have a maximum price they will pay. They have never gone above a fair price and have walked away when they thought the asking price was too high. The market knows this.

My best guess is, seasoned professionals that they are, they know exactly what they are doing and aren’t surprised by what is happening.

Oh to be a fly on the wall!!!

[grahamburn] 28/2/2018 11:16

Bukko

The "gap" isn't quite as large as you make out.

GKN declared a dividend of 6.7p (ex div 5 April) which should be added on to the theoretical offer price which GKN shareholders will receive. So far as I know (but will double-check if required), Melrose has not mentioned discounting the dividend should the deal go through on 9 March.

EDIT: Typo on dividend amount - should 6.2p (not 6.7p). Apologies, but doesn't detract from reasoning.

[bukko] 28/2/2018 11:08

brexitplus
Early days of course, I checked a short time ago and the gap had stretched to 15p but who knows? Why would anyone of sound mind give away 433p in return for 418p? I would prefer MRO did walk away as I don't want to hold any of their paper. They could of course make an all cash offer through a rights issue underwritten by their pals in the city (tongue in cheek).

I thought Minerve's post no 2310 was very good and has no foul language at all so can safely be unfiltered and read. I think if people gave more respect they would get it in return.I'll probably draw the ire of certain other protagonists on my head for this- Meanwhile has already had a go for some reason.

[minerve] 28/2/2018 11:06

I’ve a copy of Dale Carnegie’s “How to Make Friends and Influence People.”

You needed to read it then! ;)

LOL

[brexitplus] 28/2/2018 11:00

Meanwhile. You are a very naughty boy.

Write out 500 times

“I must not criticise my betters”

[meanwhile] 28/2/2018 10:55

I don't mind being told off and I've been told off twice this morning, by Dansunders25 and now again by M.
Would either of you like to see a photo of my oversized wallet?

[brexitplus] 28/2/2018 10:51

I’ve a copy of Dale Carnegie’s “How to Make Friends and Influence People.”

Who should I send it to?

(Contains no foul language)

[minerve] 28/2/2018 10:45

brain smiley

Well, that certainly isn't the impression I get from reading it.

[brain smiley] 28/2/2018 10:40

The FT is a centre/centre-left newspaper;it supported Kinnock in 1992 ,New Labour and the Tory/Lib Dem coalition.It's not right-wing and it's rabidly against brexit.

[minerve] 28/2/2018 10:16

Talking about childishness, it is endemic.

The FT has been rather poor on its reporting on GKN and Melrose. To write an article in the form of a school exam or to raise her past with what she does at home are both childish and irrelevant. It seems the FT are trying to pander to the values of their readership and getting it wrong completely. The old right-wing mentality of the Thatcher days is dying out and the right-wing cohort that goes with it too. You only have to look at the Conservative party's average member age to see they are actuarily doomed - over 70! OMG!

Well, if Melrose take GKN it is only going to go down like a lead balloon with the younger generations and empower Momentum and Jeremy Corbyn.

Personally, I see the benefits of capitalism, but not in its current form. It needs more socialism. Not the self-entitlement and greed we see on this thread. What goes around comes around - you have been warned.

As a GKN shareholder I rejected the offer but have other companies lined-up if it gets accepted. I want no part in this short-termist, greed mentality world we currently see today.

The FT can band on in silly, typical, right-wing childish mentality. It just goes to show what sensible and more socially responsible people, like me and others, have to deal with on a day-to-day basis.

[brexitplus] 28/2/2018 09:03

Well found grahamburn

Also in the FT an interesting and funny article comparing Stevens performance to a school exam.

Google “GKN seeks top grade after answering Melrose’s exam questions”

[brexitplus] 28/2/2018 09:00

Bukko

Re your calculation, the spa you quote suggest a difference of 3%. Not a lot. About £200 million.

I don’t believe that Melrose will increase their offer, if at all, until the result of the first closing is known.

It’s a case of who blinks first.

Melrose would rather walk away rather than pay too much, as they have done in the past.

[grahamburn] 28/2/2018 08:59

This short item in The Times Business News Commentary today might make some on this board and a few politicians and union leaders bristle with antagonism, possibly because it queries their position in a very succinct manner.

_____________________________

Break time

Maybe the politicians and unions will finally get it now. Whatever the outcome of Melrose’s £7.1 billion hostile tilt at GKN, the automotive and aerospace group is getting broken up. Not only that, it’ll be broken up far quicker if Melrose loses the bid.

That was the main news from GKN’s full-year figures (report, page 47): an undertaking to “formally separate” the aerospace and driveline units into two listed companies “via a demerger in the middle of 2019”. Or, to put it another way: in about 15 months time, the two companies could be potential prey for any corporate raider.

So much, then, for all the political grandstanding about those break-up merchants from Melrose. But that’s only half the point. GKN boss Anne Stevens is planning this disruptive demerger while simultaneously lifting margins via her Project Boost plan — and one whose targets are in 2020. GKN insists a swift break-up will make raising margins easier. Melrose disagrees, as its “buy, improve, sell” mantra suggests.

Anyway, it raises the execution risk for GKN’s 69-year-old boss, who only eight years ago was filling her days making creme caramel and knitting Afghan bedspreads, while giving interviews toThe Wall Street Journal headlined: “Out-of-work CEOs find openings at the top are few.” She was clearly wasted, then.