Rpc Share Discussion Threads

[phillis] 12/2/2019 18:12

Agree Jeff
Final offer meant to give the hurry up

[jeffian] 12/2/2019 17:18

whatsyourgame,

On 1 Feb you posted an article by Alistair Osborne in the Times. I don't know if you actually read it but it included this -

"And now Berry's gatecrashing its bid. How's that for gratitude? It gets worse because Apollo made its offer "final". So, unless it finds a miracle way out, it'll have to sit and watch, powerless to intervene, even if Berry offers a mere 1p a share more."

[jeffian] 12/2/2019 17:10

whatsyourgame, what do you make of this?

"2.5 TERMS AND PRE-CONDITIONS IN POSSIBLE OFFER ANNOUNCEMENTS
(a) The Panel must be consulted in advance if, prior to the announcement of a firm intention to make an offer, any person proposes to make a statement in relation to the terms on which an offer might be made for the offeree company. If a potential offeror (or its directors,
12.9.16
RULE 2 CONTINUED
officials or advisers) makes such a statement and it is not withdrawn immediately if incorrect, the potential offeror will be bound by the statement if an offer for the offeree company is subsequently made, except where it specifically reserved the right not to be so bound in certain circumstances at the time the statement was made and those circumstances subsequently arise or in wholly exceptional circumstances. In particular:
(i) where the statement concerned relates to the price of a possible offer (or a particular exchange ratio in the case of a possible securities exchange offer), any offer made by the potential offeror for the offeree company will be required to be made on the same or better terms. Where all or part of the consideration is expressed in terms of a monetary value, the offer or that element of the offer must be made at the same or a higher monetary value. Where all or part of the consideration has been expressed in terms of a securities exchange ratio, the offer or that element of the offer must be made on the same (or an improved) securities exchange ratio; and
(ii) where the statement concerned includes reference to the fact that the terms of the possible offer “will not be increased” or are “final” or uses a similar expression, the potential offeror will not be allowed subsequently to make an offer on better terms."

[jeffian] 12/2/2019 17:07

Then maybe you should read the Takeover Code (I have posted a link) and see what it says.

[whatsyourgame] 12/2/2019 17:02

jeffian - Surely the term "Best and final offer" (or suchlike) is standard parlance in offer situations to indicate that the offeror is unwilling unilaterally to improve its terms, whilst at the same time reserving the right to do so should a counter-offer emerge. It is commonplace to see such a form of words included and as such, I see nothing unusual or limiting on Apollo's part in the event of any such counter-offer.

[whatsyourgame] 12/2/2019 16:49

redartbmud - if that were so, then why would Berry be bothering with a proper DD exercise. I think they will counter bid, although probably not over-generously, probably in the 825p-850p bargain range, leaving Apollo to increase their offer to between 866p-893p should they wish to proceed.
It may be that Apollo always anticipated a counter-bidder and went in low (way too low for their own good imho) to provide them with headroom to increase their offer to 900p or even a tad higher, should this prove necessary. An initial cash offer of 850p or thereabouts would probably have secured RPC for Apollo, but they chose instead to go in on the cheap. I think it's very unlikely indeed that their offer at 782p will succeed and therefore to stay in the game, they are actually dependant on seeing a counter-offer materialise, which they would then be allowed to contest.

[jeffian] 12/2/2019 16:31

#3032,

"Appollo may have made a tactical blunder with their 'best and final' offer but legally, under the Takeover Panel Rules, they can re-enter the game if Berry choose to make a bid."

Are you sure about that, redartbmud? That's not what the rules seem to say (see my post #2992)


The rules seem to suggest that if they wanted to hedge their 'final' offer with a condition that they could reoffer in the event of a competitor appearing, they should have said so at the time. As Apollo's 'best and final offer' was absolute and they specifically said they would not increase it, I think they're stuck with that.

[redartbmud] 12/2/2019 14:12

Don't think that I would be entering the contest at c793p.
Odds are probably c 60/40 against a Berry bid.

Just MHO

[bouleversee] 12/2/2019 14:08

Thanks, no dice. Will have a look.

[redartbmud] 12/2/2019 13:59

According to shorttracker, BlackRock are the only shorters, above the 0.5% disclosure threshold, with a 0.8% short.

[redartbmud] 12/2/2019 13:52

jeffian

Appollo may have made a tactical blunder with their 'best and final' offer but legally, under the Takeover Panel Rules, they can re-enter the game if Berry choose to make a bid. Certainly there would be egg on faces, but if they really want RPC, it is up to them.
Looking at the market cap of Berry, they do not appear to have a lot of headroom to top the Appollo bid, but there are ways to structure the bid that might work eg. share and cash offer.
A bid of 850p would be a 5.78% premium to the Appollo bid, and even 840p might attract the institutional shareholders to accept.
Could Berry stretch to £3.44135bn or £3.455bn?

Don't know.

[utsushi] 12/2/2019 13:50

Good one by Lex/FT this morning, Apollo bids 7x EBITDA for RPC, forcing rival bidder Berry Global to gate-crash the party with a higher £3bn offer, then Apollo walks away, as they should, waits for a possible recession in 2020/2021, and then acquires the combined Berry/RPC Group at a sale price of 3x EBITDA.

RPC hit 100p in the last recession.

One word: Plastics.

[bouleversee] 12/2/2019 13:06

And what does that mean exactly?

[billywhizz1] 12/2/2019 12:53

it means an accountancy transaction.

[bouleversee] 12/2/2019 12:13

I need more education, Phillis. What is an AT transaction?

[phillis] 12/2/2019 11:25

probably still in the hands of the MM
wasnt an AT transaction

[bouleversee] 12/2/2019 10:55

Phillis -

Well done but whoever bought your shares must think there is more to go.

[phillis] 12/2/2019 10:49

for me no gamble
Have locked away a goodly profit

[jeffian] 12/2/2019 10:48

I must say I'm not getting too excited about the Berry interest. As Apollo tied their own hands by committing to a 'best and final' offer, what incentive do Berry have to bid substantially above that? All they need to do is bid just enough to attract a majority of shareholders. The whole process has been very badly handled by the Board.

[billywhizz1] 12/2/2019 10:42

Well phillis, that's the gamble !

[billywhizz1] 12/2/2019 10:39

An interesting post by spot1034. I don't agree with the last bit (floating value of sterling). Deals like this one are carried out on the principle of 'what goes up - comes down and visa-versa', so in truth, this point is irrelevant unless you are trading in the money markets

[phillis] 12/2/2019 10:34

Having recommended Apoolo's offer the BOD would find it hard not to follow suit IF Berry decided to offer £8+
On the other hand if Apollo's offer fails and Berry do not come through the share price will drop

I have followed Eminence's example - all out!

[spot1034] 11/2/2019 18:10

Whilst the present political uncertainties must be causing a lot of headaches for business generally, any takeover of RPC is a long term project and however we get there, we will get through this and businesses adapt to whatever circumstances they are faced with. This is an opportunity for Berry which might not come again - a chance to buy a major rival at a discount to the value of its existing operation, and don't forget that it's a world-wide business so Brexit might not be as big an issue as you think, but the shares are quoted in sterling which is very low by historic standards.

[whatsyourgame] 11/2/2019 17:48

warik - although you may ultimately be proved correct I don't agree with your conclusion right now. If Berry WERE to counter bid, 850p would probably be around the top of their range (ie. 8.7% higher than Apollo's 782p). In such circumstances, RPC's share price is hardly likely to rise to such levels right now as that would imply that (a) such a bid was already certainty which it isn't and (b) it would be accepted by shareholders which is likely but not a 100% certainty. Clearly the market is currently awaiting further developments which are probably around 2 weeks away, when Apollo's offer document is issued.