Real Good Food Share Discussion Threads

[briangeeee] 13/5/2013 14:41

Ah, OK, I think I've got the 12 month rule. It applies to Cash Offers, and is covered by Takeover Panel Rule 11.


11.1 WHEN A CASH OFFER IS REQUIRED
Except with the consent of the Panel in cases falling under (a) or (b), a cash offer is required where:

(a) the shares of any class under offer in the offeree company in which interests are acquired for cash (but see Note 5) by an offeror and any person acting in concert with it during the offer period and within 12 months prior to its commencement carry 10% or more of the voting rights currently exercisable at a class meeting of that class, in which case the offer for that class shall be in cash or accompanied by a cash alternative at not less than the highest price paid by the offeror or any person acting in concert with it for any interest in shares of that class acquired during the offer period and within 12 months prior to its commencement; or

(b) subject to paragraph (a) above, any interest in shares of any class under offer in the offeree company is acquired for cash (but see Note 5) by an offeror or any person acting in concert with it during the offer period, in which case the offer for that class shall be in cash or accompanied by a cash alternative at not less than the highest price paid by the offeror or any person acting in concert with it for any
interest in shares of that class acquired during the offer period; or

(c) in the view of the Panel there are circumstances which render such a course necessary in order to give effect to General Principle 1.

[typo56] 13/5/2013 14:30

" I know from conversations with PT that he would not accept anything below a £1"

Is it up to PT to accept or decline an offer?

[typo56] 13/5/2013 14:27

12 months I think:

"When a person or group acquires interests in shares carrying 30% or more of the voting rights of a company, they must make a cash offer to all other shareholders at the highest price paid in the 12 months before the offer was announced (30% of the voting rights of a company is treated by the Code as the level at which effective control is obtained)."

[briangeeee] 13/5/2013 14:19

FELIX99, could you give me a pointer to where that rule exists? I'd have assumed it was the takeover panel, but it says three months. So out of interest, who says twelve months?

[felix99] 13/5/2013 14:11

The rule kicks in when anyone does make a bid.

If Omnicane launch a bid tomorrow they cannot offer less than the highest price they paid in last 12 months. In this case 60p I think as they paid 60p for shares last June I believe.

So if they want to make a bid and offer say 50p they will have to wait 12 months after date they paid 60p for stock before they launch. Whatever date a bid is launched the advisers look back 12 months from the day and have to check what highest price bidder paid in that 12 month period as a minimum bid price.

[briangeeee] 13/5/2013 14:01

FELIX99, nobody has made a bid for the company, so I don't see where you're heading with that.

[felix99] 13/5/2013 13:49

It is 12 months. If anyone makes a bid for any company they cannot bid less than the highest price they paid for any shares in the 12 months before date of bid.

[briangeeee] 13/5/2013 13:39

CR, I'm no expert, but in terms of the rules, I think it's the prior three month period. See note 4 to rule 6.

However, Omnicane buying the company on the cheap just isn't something I feel is a major concern. Patrick Ridgwell has effectively been with the company all his working life (since 1964). He buys into the PT vision - or it wouldn't be happening. He gave no indication of selling at the 60p+ level. I don't know what his exit price would be, but I suspect much higher than that.

[cockneyrebel] 13/5/2013 13:04

Is that correct? I thought a co only has to offer the highest price it has paid in the last 6 months?

CR

[140661] 13/5/2013 12:59

thoseintheknow, can you reveal your source? I have been trying to speak to the company without success. Shanklin, Omnicane paid 60p on 16 June so that is the lowest price they could technically offer, however, I know from conversations with PT that he would not accept anything below a £1 and personally I believe he is looking for a much higher figure.

[shanklin] 13/5/2013 11:59

What's the lowest bid price Omnicane could now go for? It must be a lot lower than a few months ago.

[cockneyrebel] 13/5/2013 10:55

Nice first ever post on ADVFN thoseingtheknow - you must be an insider with lots of knowledge lol.

CR

[thoseintheknow] 13/5/2013 10:29

tuck some of these away, good news coming soon

[140661] 10/5/2013 08:03

CR, was expecting to see the update this week, will call and see if I can find out a date. Will post later if I have any luck. GLAH

[cockneyrebel] 09/5/2013 16:37

Trading update tomorrow then 140661?

You did say last week or this week.

CR

[140661] 06/5/2013 09:10

BrianG, it would be nice to see a dividend but I suspect this is a few years away. However, I am expecting the debt figure to be steadily reduced and for earnings to show strong growth. As you point out the first half of last year was poor so we should see impressive growth in the first half. The shares are down 25% this year and what we have seen is 1. renewed debt facility on improved terms, 2. continued buying by Omnicane who now own 24%, a strategic partner with a board position 3. declining debt and 4.a very strong final quarter. On the negative side the forecasts for next year have come down substantially but even on the revised forecasts still leave the company trading on a multiple of around 5x (prospective) and less than 6x (historic). I know small caps have under-performed but this company is producing profits, is growing its top line, has very exciting potential through the Omnicane relationship and has a break up value which is probably 2-3x the current share price. Despite these positives the story is not getting out to those that matter and we will have to wait for the broker research notes in a few months and some institutional buying but then we might get a very quick re-rating. Lets not forget Omnicane have taken out around 20% of the market cap in the last year and between them and the other board members they account for over 60% of the market cap so the volume of loose stock must be shrinking significantly. GLAH

[briangeeee] 04/5/2013 22:18

I've been spending a bit of time this afternoon/evening looking over some of the financial data. Instead of going through the report as I'd normally do, I've been using stock.o.pedia and have been checking some of data in their stock report and screens. In general, RGD look good on earnings forecasts, but middling to weak on most other aspects.

For example, as I've mentioned previously, the Altman Z-score for RGD is 1.3, where companies that score below 1.8 are said to have an 80-90% chance of bankruptcy within the year! While some might think that sounds about right :-), to me it sounds crazy (I hope). Looking into it further, there seems to be a common theme through many of the metrics and screen results. It appears that systems like this calculate a rolling 12 month window for revenue and earnings, etc. So, since the most recent reported data is the interims, it tries to take those H1 figures with the previous year's H2 figures. But of course because last year was a 15 month year, that last six months (Oct-Mar) isn't available. What it means is that these automatic systems end up taking only H1 of 2013 for revenue and earnings numbers, and since H1 was terrible, the top level metrics look appalling! It's using some weak H1 numbers for the full year.

Of course if you look deeper, you'll see past these corrupted numbers, but it just shows that the year end adjustment is still adversely affecting superficial stock research, and many will just skip past looking any deeper, when there are so many other attractive stocks.

This should drop away to a significant extent at the end of June, when the Prelims are announced.


So, what if together with the figures sorting themselves out in June,
- they announced a 1p dividend, costing say £700k,
- they said it was part of a progressive dividend policy,
- they said they'd continue to invest for growth for the next year,
- they said they'd attempt to continue paying down debt?

Maybe I'm at risk of entering dream land here, but sometimes it's useful to take a look at the upside possibilities if it all continues coming together!

[briangeeee] 04/5/2013 16:22

In terms of share price action, I feel the interesting time will be on release of the next set of interims, or in the lead up to their release. Last year's first half figures were so soft, I'd hope they're beaten by some margin this year.

Given that Omnicane have been mopping up all the loose stock in the market over the last few months, when (or if!) sentiment does turn, the movement in share price could be quite dramatic.

[briangeeee] 04/5/2013 16:05

The two big share/option issues in mid 2011 and mid 2012 of 3.8m to Pieter Totte, and 4.1m to Omnicane were in the previous figures, so the recent forecast reduction was just that. Per the recent update, PBT and EPS for 2014 were reduced by 34.2% and 34.8% respectively. They say:
"Furthermore, given the continued pressure on the UK consumer, with inflation still running ahead of income growth (we note food inflation remains stubbornly robust at 4.1% in the CPI data released yesterday), we have also decided to temper our expectations for FY2014F."

The previous Shore Capital forecasts, while superficially exciting were just plain daft. There was no way that far in advance that they could have any real confidence in the levels of growth required to reach those per share earnings. The company will achieve what it will achieve, and its much better in terms of market credibility to err on the side of caution, and then upgrade if necessary. 2014 earnings of 7.3p, still represents growth of 14%, which is none too shoddy for a company turning over £250m+.

I'd be quite surprised to see new brokers' notes being published during the close period, prior to the prelims at the end of June. No hard reason why they can't be, just it's much more normal to line up the new notes and visits for when the results information is publicly available.

[typo56] 04/5/2013 14:31

"I have put on a stone waiting for these shares to go up!"

It's all those ambient dessert products you've been scoffing. Now that's what I call a committed investor!

REFS shows the Shore Capital eps forecast to be downgraded by 3.9p to 7.3p. To some extent is that down to dilution by the new shares issued to Omnicane, or were they already taken into account?

P.S. - CR, I've now been driven on to Skype.

[140661] 04/5/2013 09:16

BrianG, I have put on a stone waiting for these shares to go up! The change at Haydens is good news in my opinion as PT has upgraded the management across the whole business apart from Haydens. Expecting the trading update this coming week and although we have a good idea of what to expect let's hope we are pleasantly surprised in a few areas. Last update suggested EPS for last year of 6.5p and debt of circa £27m, an improvement on either figure would be very welcome. This years forecast of 7.5p EPS places the shares on a multiple of 5x, hardly demanding but know one seems to care. PT promised brokers research notes and institutional visits around now so I will be expecting to see some share price action soon. GLAH, its certainly been a slow and boring wait.

[cockneyrebel] 03/5/2013 19:47

:-)

CR

[briangeeee] 03/5/2013 18:25

Haha, yes, totally missed that bit!

Of course he's talking about the dividends that Haydens is now able to pay back into the Group. One day, maybe .....

[cockneyrebel] 03/5/2013 16:35

"We didn't have a clear strategy. What Paul did was to create a good management team and a clear strategy which is now paying dividends

Ironic choice of words there imo Brian :-)

CR