Rpc Share Discussion Threads

[redartbmud] 29/11/2018 09:12

Looks like the market is betting on no bid.

[googly2] 29/11/2018 09:07

The extended deadline date is fast approaching and despite having full access to the business for over two months it appears neither party has yet made any sort of offer. IMO the fact neither no offer has yet been forthcoming does not bode well. With the resources they have at hand they should know the business as well as the BDO and any initial financial misgivings should have been confirmed or eradicated. They also have the updated six months reported statement plus October’s management accounts so seven months full trading in total. With a share price well below many brokers forecast, no industry player showing any interest and very public anti-plastic concerns it does not bode well for the BDO securing an offer that will be attractive to shareholders. The BDO has made it clear they want to take the company private and they opened the doors to Bain & Apollo but if no realistic offer is forthcoming then IMO their credibility to take the business forward as a PLC is open to question.

[dr_smith] 28/11/2018 16:44

Jeffian.
It could be said.. an aquisition is done and of the new entity the new bit represents say 20%. Books may show new bit doing nicely, but maybe books SHOULD show it is doing VERY VERY nicely, but some costs/margin are masking deficiencies in the core 80%.
No one likes to see one-off costs especially when they are an annual occurence (said generally not RPC specific).

Whether any cost is to do with old bit (core) or new bit can be arbitrary, so subject to manipulation yet still valid/good as per accounting standards/auditor.

As a PI, I tend to put my trust in a company by record to-date. Personally I believe acquisitions may offer best way forward, but for RPC, or any company, I don't know how you can check it isn't masking deficiencies, you have to go on trust and we see in media too often, that senior people often fall short of expectations at best and corrupt at worst.

[jeffian] 28/11/2018 15:45

Just going off at a slight tangent, I understand the accusation that RPC are using their constant acquisitions to mask a pedestrian underlying performance but I don't think we should fall into the trap of believing that an acquisition-led growth strategy is a bad thing in itself. Several of my best-performing shares (e.g. Diploma and RWS Holdings) have grown through acquisitions and, so long as they are adding shareholder value via higher earnings per share, dividends and net asset value, why should it matter? Diploma and RWS have mastered the knack of showing that they are able to generate sufficient extra cash to pay off/down the acquisition cost in a relatively short time. If RPC can replicate that (thereby countering the Northern Trust accusation) they should get their rating back.

[jw121] 28/11/2018 10:47

Other than re-iterating the standard line which has been in all previous RNS - 'interested parties have by date x to bid or announce no intention to bid' - which they have done - I don't see what else they can say in relation to this. They aren't allowed to give an opinion as to likely hood of a give nor can they give specifics about where the various parties are in the process. So their hands are somewhat tied on this front. Seems to be they are just making sure they are not falling foul of any rules governing M&A activity.

[googly2] 28/11/2018 10:29

Despite today's results and the fact we are now only one week from the deadline date with both interested parties still at the table it has done nothing to excite the market. If the market believes an offer is a strong possibility then why are they are not piling in and buying shares at today's price. Unless of course even if they think a bid is likely there is very low expectation of a premium being paid. IMO the BOD want to take the company private but they are in a very weak negotiating position and their total lack of comment does nothing to reassure me of the contrary.

[dr_smith] 28/11/2018 10:24

Jeffian and all:
The White Elephant..obliquely referenced perhaps?

" I am excited by the many opportunities to further develop both organically and through acquisitions. ... Looking ahead we continue to target through the cycle organic growth ahead of GDP."
..no mention to looking ahead to acquisitions that they are excited by!
Possibly a deliberate jibe to current s/h's favouring non-acquisition conslidation period whilst saying to potential bidders..
"Acquisitions are there for the taking... if you allow us".

My following comment is generic, not RPC related:
I note PWC auditors review comment:
"A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion."

Given the press auditors face, and that they seem to be a waste of space (CRLN prime example of Aiditors in general), I wonder if the caveat is a new thing, my eyes usually glaze long before I get to the trailers.

Back to RPC...as PWC role "does not enable us to obtain assurance that we would become aware of all significant matters" , maybe the 2 bidders have instigated internal audits, and that is what is taking the time.

If ball is in potential bidders court, maybe BOD said nowt, as they can only repeat what is known, BOD themselves have to await update from potential bidders.

Given the 2 extensions, no smoke without fire, I believe there will be atleast one bid, whether that is commensurate with BOD hopes is another matter.

I expect anouncement on Monday!!!
Not saying which one, but Christmas Eve is a possibility! ;-)

[cashcow5] 28/11/2018 10:16

I don’t see it either.

The offer (if there is one) would be opportunistic rather than top dollar imo.

Happy to be proven wrong and will be interested as to next weeks news.

[whatsyourgame] 28/11/2018 10:10

Phillis - so this would equate to an offer price of circa 1160p or around 54% higher than the current 753p share price. I just don't see it ... more like 1025p-1050p imo (36%-39% premium)should an offer materialise at all.

[phillis] 28/11/2018 09:54

Top price

Annualised EBITDA £595k x say 8 multiple = £4763m
this is a 55% premium to this mornings price

Happy days

[jeffian] 28/11/2018 09:43

Yes, all a bit "steady as she goes" which won't keep the wolves from the door. Given the preceding trading updates, I wasn't expecting any fireworks from the figures but I was hoping that in the narrative they would address the concerns which have rattled the share price. Not making any reference at all to the fact that they are in a 'bid situation' is definitely ignoring the elephant in the room. Like others above, I detect that management are fed up with the market reaction to their efforts and would happily see an offer equivalent to an MBO, which would be a pity IMO.

[phillis] 28/11/2018 09:28

Depends on what the advisors' advice to the BOD is
Remember advisors only get their fees when a deal is consumated

[whatsyourgame] 28/11/2018 08:47

Of course, an offer is still possible, but it's unlikely to be pitched at a top dollar price on the back of these results. Assuming that the bidder(s) would only proceed on the basis of a board recommendation, such an offer now looks less likely or am I missing something?

[phillis] 28/11/2018 08:37

Opportunities like this for PE buyers are few and far between
Be sure they will be interested

[jw121] 28/11/2018 08:31

Results are OK. I think it is hard for them to be inspiring whilst the acquisition programme is on hold. Decent organic growth figure. Liked the growth in US and China due to added value products. Think second half of the year will benefit from raw material head winds becoming tail winds. Don't see how this makes a bid less likely. 2 potential bidders still weighing it up and neither have declared they are out yet. Still think we will get at least one bid.

[redartbmud] 28/11/2018 08:07

But no banana skins for the bidders to pick over.

[whatsyourgame] 28/11/2018 08:07

Sogoesit - Which only goes to show that it's all a question of perception ... you thought the results were "more than robust", I thought they were dull and uninspiring.

With a potential bid in the offing (which I now very much doubt), I think it must at least be fair to assume that the results and the manner in which they have been presented are likely to be whiter than white.

[phillis] 28/11/2018 07:58

A bit stodgy in my view

[redartbmud] 28/11/2018 07:56

Yes, a tidy report. Bidders take note when pitching your offer.

[sogoesit] 28/11/2018 07:29

More than robust half-year with some (good) surprising info on growth in some of the market segments, Personal Care especially.
Next Tuesday for the next deadline to expire.

[jw121] 28/11/2018 05:50

I think they have been pushing for a sell only because they believe in what they are doing and are frustrated that the markets have raised doubts over it which has hit the share price and in turn reduced their ability to raise the capital required to continue with their consolidation of the industry.

[whatsyourgame] 27/11/2018 18:54

jeff - what you say is true enough but it takes two to tango and after all this time I've come around to the view that the RPC Board were quite anxious to see a deal done which possibly doesn't bode too well should these talks come to nothing, which I fear will prove to be the case.

[whatsyourgame] 27/11/2018 18:53

jeff - what you say is true enough but it takes two to tango and after all this time I've come around to the view that the RPC Board were quite anxious to see a deal done which possibly doesn't bode too well should these talks come to nothing, which I fear will prove to be the case.

[redartbmud] 27/11/2018 17:49

jeff

The interest was certainly there, as demonstrated by the two extensions. The 'bidders' would have needed to demonstrate some serious interest for them to have been granted.
Whether or not a bid materialises, that is another matter.

[jeffian] 27/11/2018 17:31

Will be interesting to see how the interim results are presented tomorrow. Will they be able to convince doubters that concerns over accounting treatment of acquisitions are overdone? Can they show that the share price is supported on fundamentals alone? If so, I am expecting the 'bid' to fizzle out at some point, if it ever existed.