Rpc Share Discussion Threads

[bouleversee] 06/12/2018 11:19

I hope to goodness the remaining potential bidder walks away rather than making an opportunistic offer around the current share price Ridiculous to be entering into bid negotiations in the context of Brexit. I hope the institutions will fight off attempts by overseas predators to take advantage of the situation to take over good British companies affected by the general malaise, not only the Brexit shambles but now Trump's antics as well..

I keep hearing alarming references to the 1930s.

[bouleversee] 06/12/2018 10:51

And nothing to do with environmental concerns and anti-plastic sentiment and need to find (possibly paper based) substitutes?

[phillis] 06/12/2018 10:45

It is for sale because it is small and non - core (and nothing to do with paper)

[dr_smith] 06/12/2018 10:36

Yes Sogoesit, that caught my attention too.
"Strategic Review of Plastics division
Following the initial review of the Plastics business, the Board has concluded that it is an attractive asset with good growth prospects, and we are now exploring opportunities for a potential sale of the division. As such, the plastics division is now being treated as discontinued.
The plastics business has continued to trade well with revenues up 2%, while there has been some impact to short term profitability due to the impact of higher polymer prices and the normal lag in recovery through prices. "
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Good to see reason is attractive asset, though 2% up ain't that great. Polymer prices noted, but that doesn't help bottom line.
If it is attractive, I ask myself why sell it. Answer seems to be:
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" we have a clear trajectory to reduce net debt / EBITDA into line with our medium term target of less than or equal to 2.0x."
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..so we can relax it isn't something wrong with our sector.

We don't know if they had such plans for a while, so could perhaps have bumped up organic growth in sales. If they were trying.. then it bolsters RPC (BOD) view that organic expansion is difficult, whereras acquisition brings in a hopefully known quantity - along with efficiency/merger saving, cross-selling etc.

[squidsgone] 04/12/2018 15:34

Unfortunately, the advisors will see their job as 'get paid and avoid any future accusations of inappropriate advice' so they can continue to offer their services to others in the future.

Seems the BoD are as reliant on a decent Apollo bid as us poor PI's are.

[phillis] 04/12/2018 14:27

The advisers' job is to find out what offer the institutional shareholders would accept and communicate this to the BOD
For the BOd to go against this advice is barely credible

And anyway what would be the point?
It would be a Pyrrhic victory of a sort as their resignations would be requested

[squidsgone] 04/12/2018 12:08

Whether via bad PR management, aggressive accounting, or ill-advised inviting in of suitors - the BoD must be held accountable for significantly destroying shareholder value.. With this in mind, they may be more likely to recommend any bid that alleviates that for the short term, whether it matches their previous suggestions of company valuation or otherwise.

[jeffian] 04/12/2018 11:39

It was probably just a bit of lazy journalese but it's the actions of management that have given the impression of being "troubled", not the performance of the company.

[dr_smith] 04/12/2018 11:13

Jeffian. That is bad..though as long as I recall papers typically take a twist for a strap line to make them a more compelling read. As an old git the Telegraph anf FT were respected papers. I am not gullible but tended to believe their content. We are now decades on and the web has largely taken away their business. Frequently on thse boards such twisted and or biased "respected" press stories, seemingly doomster proffered and unverified are referenced. It is disheartening. I no longer have respect for these papers as a mere PI, and I wonder if the City does.

[redartbmud] 04/12/2018 10:29

They are paying their 'professional advisors' £000,000 per day to handle this deal.
Do they not know the meaning of PR?

[jeffian] 04/12/2018 10:16

In today's report in Telegraph Business section on the withdrawal of Bain, they describe RPC as "the troubled plastics maker". This is exactly the point about management's mishandling of the situation as, of course, RPC isn't "troubled" at all at the trading level, it's just a perception that's been created by the shenanigans of the situation engineered by statements emanating from Standard Life, the Chairman and subsequently the Board which give the impression that they need 'rescuing' in some way.

[phillis] 04/12/2018 10:05

£10 looking good v current levels

[sogoesit] 04/12/2018 09:15

Indeed, Jeffian, I think they, mistakenly, succumbed to institutional pressure and the institutions got it wrong.
The issue will be how to work itself out of this trough if Apollo do not come to their "aid".

[googly2] 03/12/2018 21:43

You don't get it....well that's one thing we both have in common then Phillis!

[phillis] 03/12/2018 18:19

Sound strategy Jeff

[phillis] 03/12/2018 18:01

You don't get it yet

Apollo will not make an offer without a BOD recommendation
The NEDS won't recommend without consulting institutions ( directly or indirectly) as to whether it is acceptable

You as a shareholder will have no real say in the matter

PS
the share price has no real affect on the ability of a developed and well capitalised business such as this to finance its expansion plans

[googly2] 03/12/2018 17:38

Phillis, as I stated, if Apollo do make an offer it will be up to the shareholders who ultimately decide the outcome and not the BoD. Whatever the outcome it still doesn’t explain why the BoD felt it necessary to explore the option of taking a successful 250 FTSE company private? The attention from NT questioning the financial reporting and the anti-plastic lobbying hasn’t done the share price any favours and the only real response we have seen to date is the £100m share buy-back which most commentators felt was not the best use of shareholders money. The BoD are already on record stating they believe the share price under values the company and its future prospects. This was when the share price was over £8 so I can only presume at today’s price level they will find it even more difficult to finance further acquisitions. IMO the BoD haven’t managed the events of the last few months well and as long term shareholder I’m starting to lose confidence in them.

[dr_smith] 03/12/2018 17:21

Bouleversee. My last buy in was April 2017, I liked the EPS compared to share price and the co had (EPS) growth prospects. Since then share price is down, but that of course means higher EPS in relative terms.
By definition, the market is a mixed bag of all you describe and I don't think there is a definitive answer...other than perhaps in your own question.
Accounts / balance sheets and the like can be true, in accordance with accountancy rules, but still paint a different picture than what an onlooker may see as reality.
Hence the request by major s/h for RPC to have a period of dust settling before more acquisitions.
Where there is uncertainty, there is volatility.
Personally I was and still happy with them, taking my normal stance of long term view, but the whole market of course, the big money, is biased by a very short term view.

[jw121] 03/12/2018 16:49

so down 20% in the last 3 weeks to below pre bidding announcement level. Seems the market didn't like the half year results much. Not sure where the bottom is here but certainly the upside is very big and looking at the polymer tailwind effects in their presentation, the last quarter of their year should be strong now that oil has come off.

[phillis] 03/12/2018 16:36

so much angst

Neither existing institutional shareholders nor NEDS will allow the business to be acquired on the cheap
A BOD recommendation will be required so you can be sure said institutions will have communicated their price requirements to the NEDS

If Apollo cant/dont match up then they exit stage left

PS nobody said the business strategy cannot be financed going forward - all other things being equal

[googly2] 03/12/2018 16:28

If you were a cynic you might think the markets are playing nicely into the hands of the BoD. Even though Apollo is supposedly still at the negotiating table the share price is collapsing which makes you think the markets are not confident of Apollo posting an offer at a price that some but not all believe reflects the true value of the company. They might also be thinking that Apollo will just walk away as Bain have done thus leaving RPC with a depressed share price and an inability to finance the BoD acquisition strategy. Apollo are an opportunistic buyout player but they do have a company in their portfolio called Berry Plastics who like RPC are a global manufacturer of rigid and flexible plastics so there are potential synergies with RPC and certainly a platform for Apollo if they so desire to continue and accelerate the acquisition strategy the BoD were so keen on. If this is a possible outcome then IMO we as shareholders will not see a big premium on today’s price level and it will then be our decision if we reject or accept the offer. If an offer is recommended by the BoD it will be make interesting reading as to why they think we should accept it.

[dr_smith] 03/12/2018 13:43

Phillis. I like the train of thought, but the rest is what I don't know.
Cynism says money, but what money if share scheme/bonus dismissed?
Welcome handshake more inline when bidder makes first overture and at time when they went touting, they wouldn't know if handshake was on the table, so not the initiating motive. Also bidder doesn't need to offer such money if acceding to a request. So puzzled.
It's all out of our control and I have no plans to shift from "hold" status, so a curiosity on my part.

[phillis] 03/12/2018 12:41

How about this?
The BOD have endorsed and have followed a strategy of aggressive international expansion by acquisition
Sufficient influential institutional shareholders appear to have asked the BOD to throttle back on this strategy

Management have asked the NEDS therefore if they may enquire of PE as to potential interest in a buy out etc etc
You know the rest


and PS

Look at the list of heavyweight advisers: Rothschild, Credit Suisse and Evercore plus joint Corporate Brokers
Seriously heavyweight - and expensive!

[dr_smith] 03/12/2018 12:21

Thank-you Phillis. I haven't checked either, but take your word.
That takes the question back to what is motivating the BOD to go private. What is in it for them. Desire to continued aquisitions seems to be driver.. but why.
As you say newco may offer come on board "rewards", I have seen this with other co's in a stinky s/h detrimental way, but doubt that would be the key motivation here, given BOD initiated the process.