Melrose Industries Share Discussion Threads

[meanwhile] 15/3/2018 19:27

gettingrichslow,

perhaps they made the statement because Melrose had put off their meeting planned for this week, until next week, assuming the telegraph article is accurate.

From the telegraph article, "after a call set for this week was postponed by Melrose."

[gettingrichslow] 15/3/2018 18:56

This is all becoming a bit farcical now, what with Airbus making that statement just before they are due to meet Melrose. Now it seems that GKN's CEO doesn't even know how old she is (read GrahamBurns' post above!!). Whatever next??

[meanwhile] 15/3/2018 18:39

Bscuit, a very interesting question. Market talk today is that the MRO share price rise,
which tailed off a bit later, and the GKN fall, were because the market thought the deal less likely. If there is any substance in this talk, then it could be repeated if MRO were to pull out.

[bscuit] 15/3/2018 18:22

One wonders what the effect will be on the MRO share price if the offer fails – I do applaud the desire not to over-pay, which would be damaging to existing holders – or possibly worse if it succeeds and the Airbus contract is lost.

[meanwhile] 15/3/2018 17:37

Yes, I saw this. I'm not sure what's in the article that changes the argument on either side.

[brexitplus] 15/3/2018 17:26

Dear Meanwhile, getting and Losos

Please get up to date if you are going to argue. These are excerpts from the Telegraph today. Although I don’t intend to post I am keeping up to date with what is going on. Very company “Political.221;


“Alarm bells have been set ringing at Melrose over its takeover bid for GKN after the target company’s biggest customer said it would be “practically impossible to give new work" to the company if the deal goes through.

The announcement – from Airbus chief operating officer Tom Williams – has thrown a major hurdle in the way of Melrose’s £8.1bn cash-and-paper bid for aircraft and car parts maker GKN.

The move is also a major reversal by Airbus. Senior sources at the pan-European plane-maker told The Daily Telegraph in January they were open to Melrose’s approach. This was driven by what they felt was GKN failing to deliver promised savings in work it did building parts for Airbus’s airliners.

It is understood the change of position is down to what senior Airbus executives feel is a “lack of engagement” by Melrose with such a key customer.

Melrose boss Simon Peckham said prior to Mr Williams’s statement the turnaround investor had offered to meet with Airbus but was told this was not necessary. A call between the companies is scheduled for next week when the bidder will try to reassure Airbus, after a call set for this week was postponed by Melrose.

[meanwhile] 15/3/2018 17:24

OK, Losos, I take no offence in these discussions.
But when you say "They likely don't know MRO so well", what I think you mean is that, to them, the difference in what they you know about GKN & MRO, is like the difference, to you, between your wife/partner and Fred Smith of Valley Road, Pontypridd, U.S.A.

[meanwhile] 15/3/2018 17:14

Losos,

Please be reasonable. I am a Melrose, not GKN, supporter but we must all be fair & honest in our judgement of evidence whereever our interests lie.
Airbus know GKN in & out, their work practices, their trustworthiness, their sales people, their R&D, all their strengths & all their weaknesses.
They know virtually nothing about Melrose, and haven't even met.

Melrose have a system centred around optimising profitability. GKN serve the Aerospace industry. That's how Airbus will see it. The GKN long term plan for this aerospace division are certain to involve detailed discussions with Airbus. Melrose might consult them, maybe not.

Can you blame them for wanting things left as they are?

[losos] 15/3/2018 17:06

MEANWHILE - "A matter of Supplier security"

When I said 'political' I meant that it seemed to me to be saying something which didn't need saying, I repeat that Airbus must have many suppliers who are 'less reliable' than MRO. Still I accept that Airbus want to keep GKN as a supplier, they do know them. They likely don't know MRO so well.

[gettingrichslow] 15/3/2018 16:36

Losos, you're right. Airbus's statement makes little sense. As you say, how can GKN's proposed way fwd give Airbus any certainty at all? Is it possible that he has gone 'rogue' by making those comments I wonder?

[meanwhile] 15/3/2018 15:49

Losos, you say :-

"Airbus have IMO drifted into the dangerous waters of 'political' news releases. Not good."

It's a business release, nothing related to politics. A matter of Supplier security, a business parameter.

[meanwhile] 15/3/2018 14:31

Divergence in the SPs. GKN price now considerably lower than the bid price.
Can it only mean one thing?

[brain smiley] 15/3/2018 13:06

Surprised the share price is up on the Airbus news.

[losos] 15/3/2018 12:43

Finding the Airbus intervention hard to undestand, they must have hundreds of small suppliers of critical componants who have a far less reliable ownership status than MRO.

In addition if GKN sell the driveline and metalurgy business's the remaining aerospace company will hardly have a secure future on it's own.

Airbus have IMO drifted into the dangerous waters of 'political' news releases. Not good.

[meanwhile] 15/3/2018 11:20

I don't suppose the share prices of MRO & GKN are telling us much about the market's changing view of the likely success of the bid.
MRO are little changed from their level just prior to the bid and are fairly valued on Nortek. GKN are much higher of course, but they would probably hold that if the bid fails on the grounds of the Dana deal and the new superplan for the rest of GKN.

[meanwhile] 15/3/2018 11:02

My web dictionary for HOPE synonyms gives :
aspiration, desire, wish, expectation, ambition, aim, plan, dream, daydream, pipe dream; longing, yearning, craving, hankering

Another 2 used a lot in business are "dream" and "pipe dream".

[brexitplus] 15/3/2018 11:01

Thanks getting ...

I do not intend to post as stated on the Melrose-GKN bid. I do try to keep things simple.

I enjoyed sogoesit’s post on hope. I think expectation is a better word.

Don’t be harsh on Meanwhile. He is obviously having difficulty making up his mind what to do. I spent some time mentoring managers and found it difficult to get them to simplify problems and see them from both sides once their opinion was formed.

[gettingrichslow] 15/3/2018 10:56

Meanwhile, I'm surprised at your message to B+. Of all the posters on this forum I think his are the most useful and interesting. So I will miss his comments between now and 29 March unless he changes his mind in a GKN-style flip-flopping of his position!

[sogoesit] 15/3/2018 10:04

Yes, I liked the discussions too; very interesting diversity of views and opinions showing how businesses are an arena for vastly different management cultures and management ethos.

Since I am a bit idle this morning I thought I would pitch-in about the word "hope".
The word has many synonyms, some unexpectedly diverse when I looked it up just now ("achievement" being one).
However, the one synonym most commonly used in business is "expectation".
In this regard "expectations" and "expectation management" are inherent to indefinable future outcomes. I don't think that inputs define outputs (in absolute terms) albeit they are expected to and we "hope", as humans, that they will. What inputs do give rise to is an expectation of an outcome which, in the short term, can be planned but in the long term is indefinable forecasting wise. We can be optimistic (have hope) in the long term or be pessimistic (in despair of) an outcome.
The issue here imv is about judgement, a trait that underlies all decisions about inputs, or the past, that bear on an outcome, in the future. Certainly we all have different capacities both for good and bad judgement (witness how we are often all fooled by markets as Meanwhile alludes to). In the long run the wheat is separated from the chaff!

The USA is often cited as an optimistic nation state in contrast to European states probably built on their different past historic experiences.

I live in hope.

[bukko] 15/3/2018 09:56

brexit

Regarding the fall in Dana share price. Do you think fear of a Trump trade war re steel tariffs might have been a contributory factor?