Redde Northgate Share Discussion Threads

[bc4] 03/12/2019 14:08

It seems the selling stops at around 100p

[skinny] 03/12/2019 13:06

I see Link have shifted a few. :- .

[riverman77] 03/12/2019 13:00

I'm no bull, but simply not rational for the combined market cap to be now 12% lower than before the announcement. Only makes senses if you think the deal is so bad that it will lead to a 12% drop in combined earnings. I personally think there should be some modest synergies - cost savings and cross selling etc - albeit fairly minor.

[minerve 2] 03/12/2019 12:59

prokertace

You are talking about arbitraging something that is not definite. It is just a ratio. The temporal value seen in Redde could easily be swapped into that of Northgate over the next x weeks by Mr Market - The Manic Depressive. If it was cast in stone by a defined pence per share then you could arbitrage against the certainty of the deal going through. At the moment you would just be arbitraging against the view of Mr Market on both shares.

[prokartace] 03/12/2019 12:49

Minerve, of course there is a difference. There is a ratio at which the new shares are issued and whether it is in the future or now it would make no difference. If I was a fund manager and pro the merger I would sell all my NGT shares and by REDD shares in the safe knowledge that I have protected myself by 10% apres merger. This does not mean that I would make money but it does mean I have 10% more than if I had not switched.

[blobby] 03/12/2019 12:11

I agree, it looks like the NGT share price is valued 10% higher than REDD. This implies that the market thinks the merger might not go ahead and that the NGT is being undersold in the merger terms.

Alternatively perhaps there is still a massive overhang in REDD shares and this is a chance to shift them with NGT shareholders switching for the 10% uplift.

[minerve 2] 03/12/2019 11:56

There is no 'combined SP'. New shares in Northgate need to be issued to accommodate Redde investors but this will happen at some point in the future. To take the Northgate share price and use the 1/3 multiplier to come up with a Redde target share price is a mistake.

[riverman77] 03/12/2019 11:54

If this carries on perhaps we could see another bid come in for REDD?

[bbmsionlypostafter] 03/12/2019 11:53

Redde announces merger with Northgate - we don’t get it

[prokartace] 03/12/2019 11:40

The thing i don't understand is why Redde is at a 10% discount to the combined share price 300p on Northgate implys 110p on Redde

[minerve 2] 03/12/2019 11:25

Absolutely right chaps. Stay clear.

Hey listen, if prospects turn out in line with the BS story then there will be plenty of time to buy back in!

LOL

[fenners66] 03/12/2019 11:23

And the talk is about halving the dividend yield here.......
so it will be a NO from me then...

[aleman] 03/12/2019 10:50

Why tie in with a heavily cyclical company as the cycle starts to turn down? NTG results were not very good. We're now being dragged down because of them. Reject the bid.

[blobby] 03/12/2019 09:48

I think the merger makes sense and I believe them when they say there are some synergies and economies of scale as well as cross selling opportunities.

I'm also surprised that the combined market cap has reduced, but I'd be amazed if this merger does not go through.

[ltcm1] 03/12/2019 09:12

Unusual to see a coherent bull argument on these pages.

I am simply doubtful because all Woodford's other investments cratered, a huge red flag given his lumpy bets on the likes of AA, PFG, KIER.

REDD also has a very dodgy looking chart, if you are on the sidelines like me there is no reason to dive in.

[riverman77] 02/12/2019 20:34

I think the market has overreacted here in a rather irrational way. I don't dispute that this is an uninspiring deal, but the combined market cap of REDD and NTG is now around 9% lower than it was before the announcement.

Surely at the very least the market cap of the combined business should equal the market cap of the 2 separate businesses. If you think there are synergies then the market cap should be higher.

While each of these businesses have their issues, I think this is reflected in their low ratings (both around 8x earnings after the recent falls). I'm probably the only one judging by the comments here, but I certainly won't be selling.

[ltcm1] 02/12/2019 18:24

Roger Minerve knows what he is talking out so you had better listen up.

[minerve 2] 02/12/2019 16:11

Company with falling ROE and falling ROCE with growing capital employed and large debt merges with company failing to generate any movement on NAV over the last five years, increasing working capital and increasing payment days on a no cash/zero premium deal.

Sell.

[fizzypop] 02/12/2019 15:41

Held since 2013. Sold with great sadness.

[rogthepodge] 02/12/2019 15:24

Avril stood down as chair of Redde, and might now be using her influence to try to boost NTG, where she is a director (chair?) now? Surely the institutions holding Redde (what's left of their shareholdings) won't be turkeys voting for Christmas?

[bc4] 02/12/2019 15:22

Could not agree more sold the lot on Friday at 113p

[sphere25] 02/12/2019 15:00

Price currently -4% down at 106.6p

Stock now trading below the Thursday close price, the day before the merger news. That's bearing in mind that the stock was already massively depressed by multiple overhangs.

You don't have to listen to anyone on these forums of course, but even Mr Market is telling you how bad this deal is. It is an absolute TRAIN WRECK of a proposal - NTG is literally dragging down REDD as I type. I can't stress enough to folk just how much more likely the possibility of significant returns are with REDD as a standalone entity, well out of the midst of NTG.

No position in here now, but I'd love to buy back REDD as the standalone recovery play that was beginning to bear fruit. Will common sense prevail? I don't trust institutional fund manglers. They could easily vote this one through - most of them really can't read markets at all well.

Going to be a damn shame if it goes through. I guess I will live in hope and see how things transpire.

Good luck folks! Luck, that's what it boils down to now.

[fizzypop] 02/12/2019 14:17

Martin Ward, CEO of Redde for 14 years, will take over the new company Redde Northgate as CEO with the immediate departure of the previous CEO at Northgate Kevin Bradshaw. I rate Martin so will also monitor developments.