Mothercare Share Discussion Threads

[frazboy] 05/4/2018 18:38

"The new Tesco boss might re wrap the business for takeover bid"

I wondered about that. Thing is, I would have thought that any offer for the company would have to be unconditional... If the offerer wants to do some due dilligencoe or, shareholders start to scribble about the price, and want more, then it's up to the bankers to continue to continue to lend the company money (working capital) so that they can function. My thoughts are that they would do that only if they were confident a bid would be acceptable, otherwise they may as well pull the plug. Although from the bank's perspective it's perhaps better to risk a few more million and get the whole lot back, than send the company to administration and risk not getting much back at all.

[anony mous] 05/4/2018 18:31

In which case fair value about 35 to 45p ish.The new Tesco boss might re wrap the business for takeover bid in which case who knows, maybe 50p tops.

[dealy] 05/4/2018 17:07

Sorry 18m per year profit at 3% margin which is worth 220m

[dealy] 05/4/2018 17:06

It needs some slight adjustments in its business model to get 3% net margin versus the current 1%. That's 12m per year net profit. That's worth 150m

[frazboy] 05/4/2018 16:40

£100m enterprise value...? are you including the bank debt (£50m), the pension deficit (£80m/£130m depending on which number you wish to choose) in that? and what about the existing leases on the stores (4.5 year average, total liability approx £235m)?

if someone really does like the brand, then it's possible they will give shareholders a return from here, but i reckon the downside is greater than the upside.

[dealy] 05/4/2018 16:34

If more than one company wants to buy it for a pound will the price have to rise to maybe 2 pounds?100m enterprise value is the minimum this is worth as a going concern. That gives at least 30p to shareholders

[frazboy] 05/4/2018 16:08

i can see the commercial logic to JS having a look, shame for shareholders that they didn't proceed with it.

However, that wasn't the reason for the share price spike and the auction. Possibly a leak of some news of some description...?

[tilly99] 05/4/2018 15:50

Perfect time to pounce!!

[frazboy] 05/4/2018 10:01

It's a bit late for firing the CEO unless, as some has said he was blocking a financing deal, but somehow I doubt that.

Having scanned this board, the accounts and the most recent announcements I've realised that the company needs financing by the 17th May in order to continue as a going concern, otherwise they won't be able to publish such a statement in the accounts... I don't see the banks providing more unsecured lending.

A bid is a possibility, i'm sure someone thinks that they can make the brand name work (although I'm not convinced as to the relevance of the fact that someone was prepared to pay a lot of money in the past - it was a different world a couple of years ago) even if it's more of an online presence, it's just a question of whether you buy it from the administrators or take on the liabilities. personally, i would go down the former route.

Interesting times.

[kmann] 05/4/2018 07:55

best news for mtc in years imo, MNJ was just wasting money on revamps, should have converted to 100% online

Might be wotth a punt now

[dealy] 05/4/2018 07:41

Might have been a condition for new financing. I don't think it reflects a worsening of the situation

[walbrock82] 04/4/2018 12:41

When you see the boss of a company leave we got to analyse why they are doing so.

Are they leaving a legacy behind?

Or, are they leaving because they know something is wrong?


For me, it's the latter.

As for the new boss, he can blame the old boss and collect his interim paycheque without doing much work because he knows he can't turn the business around. If he is going to turn the business, he needs to write down a 10 point plan to inform shareholders how he is going to do so, if not, this is an easy vocational paycheque with little risk.

[fenners66] 04/4/2018 11:34

Come on dealy time for one of your positive comical Alli comments...

[kirk 6] 30/3/2018 10:14

Wish I had listened to him on a few stocks