Rpc Share Discussion Threads

[budgiekevin] 25/1/2019 22:08

What are comments about next weeks update? I have looked at the RPC website forthcoming events in the financial calendar and it does even have 2019 listed never mind an actual event

[warik] 25/1/2019 21:52

2 institutions has disclosed their disappointment and that's under 3%. I feel most have resigned to selling i guess and they may wait for next week's update to keep or let it go. If it's anything like last one they may just let it go.

[spot1034] 25/1/2019 20:21

If there is another party out there thinking about coming in, it might be the case that they were watching and waiting and quite possibly expecting any bid to be at a level which left them little room for manoeuvre, so they weren't expecting to enter the fray but maybe just maybe they are now reviewing the situation. Who knows, but as this low offer has taken analysts and shareholders by surprise, it seems reasonable to assume the same is true of rivals in the sector who must be monitoring events very closely.

As it hasn't been reported here I assume there has been no further reaction from major shareholders today.

[warik] 25/1/2019 20:11

If institutions are selling which they are who's buying? I personally think they will sell the stock in anticipation that they will be able to buy cheaper.

Moody is going to downgrade RPC which will mean nobody will come with another offer.

I'm sure institutions won't care if this goes 725 and they buy back and approve Apollo deal.

[dr_smith] 25/1/2019 19:52

There is so much small print in these matters you never know what is final/absolute etc until it happens.
e.g. The bid deadline was extended several times.

It is seemingly controlled by "The scheme" and in most legal matters, agreements can be varied subject to agreement by all parties.
..or maybe not in this case, I don't know.

Budgiekevin:
>Dr Smith in my view no alternative bidders will come forward until after the Apollo offer document is issued. There is nothing to gain coming forward any earlier.

You may be right on price, but if potential bidco want matters wrapped up sooner rather than later, why lose more time?
They could have been waiting to see outcome since October.

It all lacks clarity and my investment preference is to go with probability on knowns - and of course, holding on would mean foregoing opportunities elsewhere.

All IMO. :-)

Dave

[budgiekevin] 25/1/2019 19:07

Squidsgone in the event of another bidder coming in Apollo are allowed to raise their offer

[budgiekevin] 25/1/2019 18:58

Squidsgone if a higher offer come in then Apollo are allowed to go higher

[squidsgone] 25/1/2019 18:46

And stating 'final offer' would limit Apollo's ability to respond to alternative approaches or failure of their offer.

[budgiekevin] 25/1/2019 18:37

Dr Smith in my view no alternative bidders will come forward until after the Apollo offer document is issued. There is nothing to gain coming forward any earlier.

[bouleversee] 25/1/2019 18:32

Didn't Apollo say this was their final offer? Perhaps they always say that. If the instis. are selling, the share price is likely to go down.

[dr_smith] 25/1/2019 17:04

I have now sold for several reasons.
I was happy to play long game in terms of normal business, but at the moment I guess there are 3 probable outcomes:
1) Deal goes through (higher bid by apollo possible but can't be relied upon).
2) No deal, BOD continue
3) No deal, BOD changed/replaced
-----
4)Offer from Bain/other party

I dismiss the 4th as unlikely, as I think any interested party would have said so in these last few days.

In terms of business strategy, they likely haven't done much of would have been done these last 5 months, if management didn't have hands full with Apollo, though organic growth shouldn't be affected.

Next few months will be time/ground lost to offers/BOD changes, revised strategies being agreed and the like.

I therefore choose to dip out now, I can come back later in the year when direction has some clarity and in meantime use the funds to invest and take up opportunities elsewhere.

FWIW, the sale was a slight loss for me, but slightly ahead if I include divs.

GLA whatever you decide.

Dave

[warik] 25/1/2019 16:22

hxxps://www.moodys.com/research/Moodys-places-RPCs-rating-under-review-for-downgrade--PR_394222?WT.mc_id=AM~UmV1dGVyc05ld3NfQU1QU19TQl9OUl9DVl9SYXRpbmdfTmV3c19BbGw%3d~20190125_PR_394222

Rating Action: Moody's places RPC's rating under review for downgrade

[spot1034] 25/1/2019 15:46

What's the betting that the trading statement on Feb 1st will be as downbeat as they can make it, with dire warnings about what might happen if the deal isn't voted though?

[warik] 25/1/2019 13:22

Standard Life Aberdeen plc sold on 24 Jan a total 953,610 shares in 2 lots as per todays RNS and now holds 9.85%.

[whatsyourgame] 25/1/2019 11:32

Well, at least the share price is steady this morning on 3.8 million shares so far traded. So no great exodus on fears that the offer might fail. I suppose the market is waiting for the instis to show their hand, always assuming they decide to do so.

[dr_smith] 25/1/2019 11:03

Jeffian:
To add to 2872.
Agree.
For apollo, it's nothing but a big asset to buy/sell and make a wedge.
I reckon they took their time as it would play into their hands for the lowest bid and world economy issues meant high risk before xmas, so waiting for New Year, with better handle on outlook also meant dragging feet was in theor interest.
DD was a convenient label as you say, though decentralised aspect wouldn't help confidence of apollo decison maker.

[jeffian] 25/1/2019 10:44

whatsyourgame,

Well we don't know what went on behind the scenes so it's pure guesswork but just because the bid period kept being extended doesn't necessarily mean it was all down to DD, whatever statement they put out. It may just have been the Board squeezing them up to their "final" highest offer from something rather lower, to the point where Apollo said, "that's as far as we'll go; take it or leave it".

So that leaves the decision. Of course the Board want it because it protects their own position and their employees' and means they can resume their acquisition strategy without worrying what the market thinks. For us shareholders, however, we don't have to accept it just because it's the only offer on the table.

My preference remains that they knuckle down and manage the company for the benefit of shareholders in the long term but, besides the inevitable share price reaction if the bid fails, I agree with squidsgone that the Board will look very vulnerable, throwing potential management changes into the mix. Short term pain for long term gain?

[jeffian] 25/1/2019 10:30

Re: "prods the II's to reconsider support to their acquisition strategy", shareholders - II's and PI's - HAD supported their acquisition strategy until Northern Trust came along and poured their poison in the market's ear. Up until then, shareholders had supported every Rights Issue and I was so enthusiastic myself that on several occasions I bought up more shares in the market just to increase my RI entitlement, making this my second largest holding. Every RI since I've been invested here was fully subscribed and went to a premium. No, the problem was not II support, but the trashing of the share price by NT as a result of which acquisitions became unviable to fund via the issue of fresh equity. Interestingly, this phenomenon is not restricted to RPC; there are a number of companies following a 'growth-by-acquisition' strategy where the share prices is under pressure and the same questions being asked.

[whatsyourgame] 25/1/2019 10:27

Incidentally the piece in today's Daily Telegraph, reporting on the opposition to the offer price by the two instis to have thus far declared their hand, doubts whether a counter bid will emerge, but doesn't totally discount the possibility of Bain re-entering the fray.

[whatsyourgame] 25/1/2019 10:18

jeffian -

I certainly don't disagree with your description of the dynamic in play here, thanks to RPC's strong desire to see the company sold, but that doesn't explain why the DD exercise took so incredibly long. In fact Apollo's (and Bain's) welcome appearance on the scene should have shortened the timescale somewhat. My theory is that the deal was in severe jeopardy for a considerable part of this period and that it was only the very low level at which the bar had been set which kept it alive.

[squidsgone] 25/1/2019 10:13

By recommending this, RPC Board have declared that they cannot do any better without following their acquisition strategy.

The only upside I could see gleaned from recommending the bid is to demonstrate that one did in fact materialise, ie. that then could be perceived to (i) scares away shorters (in the short term), and (ii) prods the II's to reconsider support to their acquisition strategy.

The downside to them is that unless this approach has been backed off with the II's beforehand, I suspect a failure of this bid will see key Board members seriously out on a limb.

[dr_smith] 25/1/2019 10:07

Jeffian. Yes.

[jeffian] 25/1/2019 09:52

whatsyourgame,

Thanks for your #2861. I did find it later, although still not sure where bouleversee's "4" come from.

I don't think there is any evidence that Apollo "weren't particularly enthused by what they found at RPC". The fact is that we were on the back foot the minute management put themselves 'in play' and invited offers for the company. The dynamic in those circumstances is quite different to a bid where an acquirer approaches the company, rather then the other way around. RPC appeared pretty desperate to sell from the outset and, after the initial period and Bain dropped out, Apollo knew they were the only bidder. Of course they drove a hard bargain. It's a bit like Brexit, really (OK, let's not go there!) - if there is not a point at which you are prepared to walk away and say "the deal's off", you are going to get screwed.

[whatsyourgame] 25/1/2019 08:55

Imagine the final price negotiation:

RPC "Our absolutely bottom price would be 800p, we can't consider a penny less"

Apollo "Our absolutely top price given all the imponderables is 775p"

RPC "If absolutely pushed to the limit, we could possibly stretch to 790p"

Apollo "That's too much, our final, final offer would be to split the difference"

RPC "You mean 782.5, well OK then"

Apollo "We Americans don't do half pees, that's agreed then ... 782p"

The two parties shake hands and the corks are apoppin' - mega-sized fees have been earned by the army of advisors to both sides!

[rhubarbcrumble] 25/1/2019 08:34

I think Whatsyourgame that you have hit the nail on the head.I agree entirely