Rpc Share Discussion Threads

[billywhizz1] 08/3/2019 13:28

redartbmud.

I feel that the question of the BoD's 'idiocy' is a lose-lose situation either way
if another knight in shining armour comes along with an increased bid. They are the sole architects of their own eventual downfall.

[mammyoko] 08/3/2019 13:25

Two bidders are saying that, in the absence of their bids, your company is worth around £6.50 which is what it was trading at before the bids and what it would be trading at without them. Put that way, the bids offer a premium of around 25%.

I would not be surprised to see Berry up their offer slightly to get this over the line, But absent any other suitor - and we have had several months for other suitors to appear out of the woodwork - the choice for the instis will be take what's on the table or accept that the share price will be 25% lower and an uncertain future. When it comes down to it, I think they will choose to go for the certainty and move on. This is a difficult business to value - reflected in the bidder's price - with a very weak balance sheet (-ve NTAV), high debt to ebitda ratio and a pension liability.

Neither bidder is a quality proposition. Private equity are never going to pay top dollar for something like this and Berry's balance sheet is worse than RPC's.

[billywhizz1] 08/3/2019 13:21

Anybody seen the RPC's director's share ownership policy ?.
Director's ownership, any Common or preferred restriction's ??

[bouleversee] 08/3/2019 13:15

If Rothschild are so marvellous, you would think they might have learnt something from the first exercise.

[billywhizz1] 08/3/2019 12:45

Good comment WYG.

Sometimes the mere threat of a class-action is sufficient to concentrate the BoD's minds on any further stupid actions. The original reasons given for the sale were to give the company a private sole ownership status with a PE outfit, as it was their opinion that a PLC status was to restrictive. It was stated at that time that the large Insti's were restricting the boards ability to operate in a more adventurous manner. Well the big Pension's institutions operate in their own comfort zone and did not look to kindly on RPC's M&A programme. We now come down to the question of perceived incompetence. The B0D instigates a perfectly proper legally approved arrangement framework, but I think the boards actions from then on were, at best, very questionable. IMO the next phase of their deliberations were not in the S/h's interest's. I note that this same BoD's has immediately recommended the Berry offer, which will achieve, if accepted, exactly the opposite to the original reasons put forward in the first place. Now how stupid and self interested is that !

[budgiekevin] 08/3/2019 12:21

Berry must be very confident a 3rd bidder won’t appear as given their derisory improvement in the offer price it shows the BOD will change their mind for less than 1.5%. No one on this BB saw such a small increment coming

[whatsyourgame] 08/3/2019 11:45

billywhizz1 - You make the whole process sound as easy as falling off a log. In practice it would be exceedingly difficult, not to mention excruciatingly expensive, which together probably explains why this particular route is hardly ever pursued. There's also the question of the potential damage to the company which such an action might cause.

For me, the mega disappointment in all this has been the performance of N M Rothschild, acting on behalf of RPC. Usually, their judgement is absolutely faultless, but they must surely be embarrassed that their client, having advised recommendation of what was seen by many as an inadequate offer, have now seen that self-same recommendation overturned. They must also have been disappointed by the dismal level of advance acceptances to Apollo's offer by the Institutions which gave a very clear clue from the outset that success might be seriously in doubt. In summary, the course of events thus far must be some way adrift of what NMR must have hoped for and expected.

[whatsyourgame] 08/3/2019 10:57

I think this is simply journalistic shorthand, I'm sure most if not all shareholders are well aware that they, not the BoD will decide the company's fate. Be grateful (and indeed hopeful) as a result of Berry significantly(?) not describing their offer as being "final", at least I believe this to be the case.
Let's see what the media as well as the more vocal Instis make of their offer and whether they expect this to be increased.

[bouleversee] 08/3/2019 10:48

This is what infuriates me:

" British packaging company RPC Group has agreed to a higher takeover offer from plastics maker Berry Global Group Inc worth 3.34 billion pounds, and has ditched a lower bid from Apollo Global Management LLC."

How has the company agreed it? These incompetent, self interested so-and-sos don't own the company. Even if it costs me money, I should like to see them hoist by their own petard. I shall be voting against.

[jeffian] 08/3/2019 10:21

923p we'd probably take!

The market certainly isn't pricing in an improved offer.

[whatsyourgame] 08/3/2019 10:15

"A higher offer is a good result for shareholders, but they won’t be dancing in the streets," said Nicholas Hyett of Hargreaves Lansdown. "Given the share price was above the new offer price before the announcement, investors were clearly hoping for more.”

He can certainly say that again! But with hindsight, there was never any need for Berry to offer more than a token increase to trump Apollo. What remains to be seen however is whether shareholders take umbrage at their parsimony and decide to sit on their hands.

Berry may think they've played a blinder and so they have in deservedly seeing off Apollo, but they still have to land their target and that may require a modest, say 5% loosening of the purse strings involving them offering around an additional 30p, i.e. 923p which would probably clinch it for them.

That being the case, I don't see any compelling reason for selling the shares at current levels as the chances of the whole deal collapsing appears somewhat remote.

[gettingrichslow] 08/3/2019 09:59

Apollo bid through a company they created called 'Rome UK Bidco Ltd'. Is there anything to stop them creating a different company and re-bidding??

[jeffian] 08/3/2019 09:45

The management need shooting over the way they have handled this. Between them and Apollo they have contrived to deny a competitive process at every turn resulting in another low-ball bid which they are unable to counter. When Alistair Osborne wrote that the stupidity of Apollo meant that a counter-bidder only had to offer 1p more, it turns out he wasn't joking. These must be the same people as those negotiating Brexit, surely?!

I still think it's too low and am inclined to vote against but my opinion of management is now so low that I'm not sure I would have any confidence in them for the future.

[dr_smith] 08/3/2019 09:32

Bouleversee.
Explain:
1) application of a lifetimes learning to probability, but probability is not certainty.
2) how markets should be open but infested by greed and deviousness and activity that should be illegal.
3) the difference between investing and gambling

1) is probably the one that most applies for case in hand.

Ask: Where to spit the egg shells post suck. ;-)

Dave

[bouleversee] 08/3/2019 09:26

They shouldn't be trying to sell the company in the midst of all this Brexit chaos anyway; guaranteed not to get the true value.

[bouleversee] 08/3/2019 09:21

Alistair Osborne of The Times will have a field day with this one.

Good answers from redartbmud and sogoesit. I think he needs to concentrate on his A Levels first, however. If I gave him money now it would probably go on a car!

[phillis] 08/3/2019 09:16

Boul
Yours was the best choice
You have lost nothing (but a bit of time)

[gettingrichslow] 08/3/2019 09:15

If it's so obvious that these two are low-ball offers surely a third offer is about to land...if not, then clearly there aren't any other willing buyers at a higher price and therefore the company is only worth 793p?

[squidsgone] 08/3/2019 09:07

Berry chancing their arm on the back of the low Apollo offer knowing their hands are somewhat tied. Good news that they want RPC though, how bad should be the next question - tested by a "no" vote.

[spot1034] 08/3/2019 09:06

“How RPC exits stage right on an EBITDA multiple of just 6.8x astonishes me - DS Smith sold its Plastics business earlier this week on 9.9x,” said Peel Hunt number cruncher Harry Philips.

“We accept that they are not direct comps but really. If I write anything more, I will be probably sued.”

[...]

[sogoesit] 08/3/2019 08:55

You say, "here's some money... prove to me that your decision was other than luck (a one-off)"!