Melrose Industries Share Discussion Threads

[poikka] 15/10/2018 16:26

gettingrichslow - well yes, it was obvious to me then - except for the car sales drop, which is probably temporary, as I said. When I accepted cash for my GKN shares, I gave much the same reason for not going for MRO shares - too much reliance on selling off bits at a profit. Looked pretty obvious to me at the time, and still does. This'd be good in a bull market. So obviously you disagree, that's ok.

[brexitplus] 15/10/2018 13:32

Yertiz

Agree with all you say.

[yertiz] 15/10/2018 13:24

150p will be a ridiculously low price for Melrose but I wouldn't discount it happening with all that's going on in the market. 175p is daylight robbery, 200p is a steal and IMHO 230p fair value.

I sold over half of all my big holdings (Halma, MRO, NMC) two weeks ago and sitting fairly pretty on a load of cash waiting for the next opportunities (which won't be AVO btw). I think there will be quite a bounce back in November/December when the fallout from US/China trade wars diminish. Brexit has to become clearer, unless that stupid woman May muddies the waters further and prevaricates with her decisions and policy making, effectively selling the UK down the river with EU trade deal arrangements and the NI border issue. Barnier is holding the UK to ransom and May is letting him do so, she hasn't the will or wherewithal to do otherwise. Brexit means Brexit....yeah, right.

[gettingrichslow] 15/10/2018 13:05

Poikka, so it was obvious to you a few months ago that it would fall then? Or are you saying all that in hindsight?

[poikka] 15/10/2018 12:28

Wakey, wakey.

This has only performed well because it makes money from stripping, or improving, or both most likely, and selling off bits at a fat profit. Market sentiment's rubbish atm, PLUS car industry a bit iffy to say the least, although that'll change eventually.


Add that to a load of debt, and please don't wonder why the SP's down.

[brexitplus] 15/10/2018 12:23

Hi Yertiz. Glad you’re back. I too am hoping for 150p which undervalues Melrose hugely.

Exeter doing well.

Any thoughts on AVO?

[brexitplus] 15/10/2018 12:21

A rights issue was never a starter as explained above. The fight was always going to be close. GKN needed the small shareholders and hedge funds on board to win.

Only if the GKN board had agreed a takeover at a fixed price would a rights issue have been used. It was too inflexible.

[yertiz] 15/10/2018 12:17

Jackdaw - I think you have been well and truly ripped off, unless your sub - £2.67 was a whole English pound less!
Still a way to go I think with so many pressures on shares at the moment but I'll be buying back in if the price gets to the £1.50 level.

[gettingrichslow] 15/10/2018 12:09

MW, would GKN shareholders have accepted significantly less? Given that these days one can sell shares at touch of a button from comfort of your living room (and therefore shares=cash in effect) I doubt it.

[meanwhile] 15/10/2018 12:01

getting,

MRO would have paid less, in cash, and the entire shareholding would be different.
Now MRO is owned 60% by ex-GKN shareholders.

[jackdaw4243] 15/10/2018 11:34

Added at sub £2.67 not a good day

[brexitplus] 15/10/2018 11:30

Getting, sounds like fun. We were limited to beautiful weather, great food and drink, the passeggiata in the evenings which I love, and lots of train travel to the towns we visited. Very relaxing.

[gettingrichslow] 15/10/2018 11:25

B+, the words I would choose are probably 'surreal' and 'excessive'. I'm glad I wasn't paying! At one point our late arrival from Spain entered by being lowered down from the roof on the back of a huge carbon fibre tiger while being sprayed with champagne from trapeze artists either side of him! Not sort of thing you see every day!

[brexitplus] 15/10/2018 11:24

Getting, this morning Barclays reiterates “overweight221; and a target price of 250p.

Agree about market conditions, etc, as you say.

[gettingrichslow] 15/10/2018 11:19

MW, I think the only thing that would really be different is that we'd have paid more. The market, for whatever reason, is not currently valuing MRO very highly and I doubt that is driven by a load of small GKN investors, it's more to do with macro issues, general market fears, lack of news on disposals etc. I'm tempted to buy more but already got plenty so not sure I will.

[brexitplus] 15/10/2018 11:03

Just a quicky.

In the past Melrose acquisitions were “agreed” so the price was known and Melrose was able to have a rights issue.

In the GKN case it was a “hostile”; bid and so the price wasn’t known. The Board, intelligent people that they are, knew there would be a fight and the initial price they offered would need to be increased but they didn’t know by how much. In addition, using the fabulous Melrose track record they needed to persuade GKN “small” shareholders, who are a conservative lot and tend to hold whatever, to agree to the deal. In the end these shareholders were the key to the deal.

Doing a cash and share deal gave the flexibility to do the deal. If the acquisition attempt had failed Melrose did have not have take up the loan. Likewise they were not left with dilution from a rights issue.

Had GKN agreed to a deal in the first instance I have no doubt that a rights issue would have been the route forward. Whether the full amount would have been taken up is another question!

Just my opinion of course.

[brexitplus] 15/10/2018 10:51

Hi Getting

How was Vegas? Lovely weather in Umbria and we had a great holiday. Lots going on in the last week I see. We didn’t take any gadgets with us other than Mrs Brexitplus’ mobile, and that only for emergencies so didn’t catch up with goings on until this morning.

Good buying opportunities I think.

And here it looks like a possibility of a sensible discussion. Let’s see how long it lasts.

[meanwhile] 15/10/2018 10:29

getting,
Do you believe that if MRO had paid for GKN in cash, everything else would be as it is now?
For a start, MRO would have a very different spread of shareholders. There wouldn't be any ex-GKN.

[jackdaw4243] 15/10/2018 09:22

Not the start I was expecting

This cannot all be down to GKN shareholders unloading, can it. No comfort from my SLA.L MGGT and BAB either. TSC better than expected

[gettingrichslow] 14/10/2018 23:16

If we'd paid in cash all MRO shareholders would now be worse off relative to the current situation - not sure why you'd be wishing for that?

[meanwhile] 14/10/2018 22:55

hvs says "I just think and my opinion only that buying GKN was very very bad timing."

I thought the timing was good. GKN were at a low point, MRO were artificially high on the back of Nortek's perceived improvement.
The mistake I think was buying by creating 1.7X new MRO shares for payment to GKN holders. I think they should have paid cash and raised the cash from MRO shareholders, as they've always done previously.
It must have been tempting to do it the way they did, with shares to GKN, because MRO shares were so artificially high.

[meanwhile] 14/10/2018 22:22

We shouldn't be surprised where history appears to repeat itself. I think it's pure coincidence, due to the limited number of forms of event that can take place.
It just seems rather more uncanny to us when the repeated event is very close in form to the prior event.
But there must be very many prior historical events that are never repeated.
Where you need the crystal ball is to tell us where a repeat will & will not occur.

I'm not sure how I got to this question.

[hvs] 14/10/2018 21:30

"You don't need a crystal ball when you have a history book" lol !!! The future is no history.

[jackdaw4243] 14/10/2018 21:23

HVS

Andrew Mar

"You don't need a crystal ball when you have a history book"

[hvs] 14/10/2018 20:02

Good luck to you . You see in investing if you get 6 intelligent people together they will all have different opinions so I wish you good luck. And the economy keeps on changing according to the whims of the politicians so I cannot say what the future will bring but good luck.