Shanks Share Discussion Threads

[tullynessle] 11/3/2010 07:20

Market Report: Bargain hunters see value in Shanks

By Nikhil Kumar
Thursday, 11 March 2010


The waste management group Shanks attempted a comeback as bargain hunters piled in last night.


The stock suffered a bruising 15 per cent decline after ending takeover talks with the private equity group Carlyle. The resulting weakness left Shanks trading on a significant discount to both to its own historical multiples and the wider utilities sector, prompting Goldman Sachs to weigh in with some words of support. Moving the stock to "buy", the broker said that not only was the stock cheap on valuation grounds, but that the company, with its exposure to the non-municipal waste business, which responds to industrial production cycles, was well placed to capitalise on the improvement in the economy.

"Our economists expect a rebound in industrial activity in Shanks' key markets (Benelux and the UK), which should drive strong earnings growth at the company," the broker said, abandoning its "neutral" stance. "We would also not rule out the possibility of further [mergers and acquisitions] activity in the next 12 months," Goldman added, helping Shanks to rebound 6.2p to 108.4p.

[wig123] 10/3/2010 12:56

You just couldnt make it up ;-))





Did I read holdings RNS right from Monday re : Soros went long quite a bit around £1.20 mark?

[salpara111] 10/3/2010 12:00

It aint over till the fat lady sings!

Cleary she is just pausing to clear her throat!

The fact that the share price dropped just 15% when Carlyle was sent packing is an indication that the market as a whole felt that the offer was totally inadequate.

Interesting price action today!

[betman] 10/3/2010 10:07

Could be interest from other suitors, like this comment in dec 2009

US firm Covanta is the latest suitor to emerge in the contest to take over waste management group Shanks. Covanta, the world's largest supplier of energy from waste, made contact with Shanks's investment banking adviser, Greenhill & Co, late last week and expressed an interest in acquiring the group, according to market sources.
Covanta, a $2.6bn (£1.6bn) US quoted firm, entered the UK market four years ago and is based in Kingswinford in the West Midlands. It is using its British foothold as a base from which to expand in Europe

[broadwood] 10/3/2010 09:34

Friz - thanks.

[frizsand] 10/3/2010 09:32

It comes with CMC and quite a few of the SB co's I believe Broadwood.

Here is the link:

[broadwood] 10/3/2010 09:22

Friz - is that a subscription website? Or can it be accessed by Joe Public?

[frizsand] 10/3/2010 09:17

following on from broadwood, here is the target from GS

MARKET TALK: Goldman Upgrades Shanks Group To Buy

DOW JONES NEWSWIRES

0817 GMT [Dow Jones] Goldman Sachs upgrades Shanks Group (SKS.LN) to buy from neutral and raises price target to 159p from 150p. Says following the news that Shanks has ended its talks with the Carlyle Group, the stock is trading at a significant discount to both the wider utilities sector and its historical multiples. Expects a rebound in industrial activity in key markets, such as Benelux and the UK, which should drive strong earnings growth at the company. Also cites the possibility of further M&A activity in the next 12 months. Shares +2.6% at 105p. ([e-mail])

[onehanded] 10/3/2010 08:38

Yup upgrade to £1.20. Could rise short-term to this level. Worth a punt of a higher bid to come in around £1.30.

[betman] 10/3/2010 08:35

hi minky , I dont agree with your view. This company is "in play". It has been valued by a mean minded private equity company, after due diligence at 120p. They may come back with a higher price and until that is finally out of the way, it shouldnt drop. others may also run the rule over it now or the company may look for a merger or white knight. The company statement said it was all about price and I dont see them settling for 70p. I think there would be alot of buyers at 70p although it would not get there. Clarity on the full year dividend will also support a higher price

[broadwood] 10/3/2010 08:01

An upgrade from the big beasts!!



Shanks upgraded to buy from neutral at Goldman Sachs

[minky65] 09/3/2010 17:34

IMO the share price will drift back down to the pre bid price circa 70p. does anyone else have some thoughts on where we are heading in the short term ?

[betman] 09/3/2010 15:22

The original indicative bid price was 135p. After due diligence they dropped this to 120p despite the market powering ahead and recession halting decline and starting a weak recovery. On the face of it not good news but this may just be a negoitiating ploy and 120p is a starting point. Maybe 135p is their current upside so will they come back with 125p or 130p ?? Shanks board believe this isnt over under Takeover rules, I guess that comes only if Carlyle state a full and final offer of x p
With both divis hopefully restored this year (as stated in last annual report ) current price is fair value for future growth prospects.

[w.bramley] 09/3/2010 15:15

SKS board values the stock at no less than 150p - bids of 135p now 120p - it would appear that at todays 96-101p this has to be a buy for the med/long term holders, but short time the slide may or may not continue to the pre-bid price.
A keen buyer will in many cases, pay more than the value, but in all cases a new offer from another party can have a dramatic effect.

Water - gas - electricity - waste collection are all essential services.

[broadwood] 09/3/2010 14:40

Its not a disaster by any means.This is a Company with a great future and I'm glad a private equity group has been sent off with a flea in its ear.

After all, they would only take out value, load it up with debt and then try to refloat it.

It won't take too long to recover 120p thats for sure.

[betman] 09/3/2010 10:11

I have copied the original RNS, which does use the word final. I think the key point is that 120p was the last price that Caryle put forward which was rejected. I suspect in Takeover code language, a Final offer is the end of the process and all talks finish and they cannot bid for another 6 months. I dont think this was being said especially as the RNS also stated the company remains in an Offer Period.
Therefore the correction is of the Dow JOnes news report rather than the offical RNS ( see below)

As previously announced, the Group has been in discussions with a private equity firm, subsequently confirmed as Carlyle, since its approach in October 2009. During this period, Shanks engaged constructively with Carlyle and their
advisers, who were granted extensive access both to information on the Group and its key personnel across Europe. At a meeting yesterday between the Chairman of Shanks and Carlyle, a final price indication of 120p cash per share was proposed by Carlyle for all the issued share capital of Shanks. The Board of Shanks has subsequently met and concluded that it is unwilling to recommend an offer at such a level and accordingly that further discussions with Carlyle are not in the interests of Shanks shareholders

[milton8] 09/3/2010 10:02

if no bid,
for long time views,

[wig123] 09/3/2010 09:40

I think you will find they was correcting this:



09/03 07:25 - Shanks Ends Carlyle Talks After Final Bid Pitched Too Low

LONDON (Dow Jones)--Waste management company Shanks Group PLC (SKS.LN) Tuesday said it ended offer talks with private equity group Carlyle Group LP.

Carlyle made a final offer of 120 pence a share for Shanks, which it rejected, Shanks said.

The 120 pence a share offer is lower than an earlier 135 pence offer Carlyle made late last year, which Shanks also turned down.


Company Web site: www.shanks.co.uk


-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [e-mail]


Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day.


(END) Dow Jones Newswires

March 09, 2010 02:25 ET (07:25 GMT)

[wig123] 09/3/2010 09:37

betman, it came through on newsfeed on my brokers platform Gni. if in doubt phone the reporter Jason Douglas.

[betman] 09/3/2010 09:36

wig - what is your source for this update, I cannot find it anywhere. Also the original was 7.01am not 7.25

[wig123] 09/3/2010 09:04

Expect bid to be raised!!!!

[wig123] 09/3/2010 08:58

Interesting correction:






09/03 08:55 - CORRECT: Shanks Ends Carlyle Talks After Final Bid Too Low

("Shanks Ends Carlyle Talks After Final Bid Pitched Too Low," published at 0725 GMT, misstated that Carlyle made a final offer for Shanks in the second paragraph. The correct version follows:)


LONDON (Dow Jones)--Waste management company Shanks Group PLC (SKS.LN) Tuesday said it ended offer talks with private equity group Carlyle Group LP.

Carlyle proposed an offer pitched at 120 pence a share for Shanks, which it rejected, Shanks said.

The 120 pence a share offer is lower than an earlier 135 pence approach Carlyle made late last year, which Shanks also turned down.


Company Web site: www.shanks.co.uk


-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [e-mail]


Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day.


(END) Dow Jones Newswires

March 09, 2010 03:55 ET (08:55 GMT)

[rcktmn] 09/3/2010 08:34

Yep, good discount share price to get in at this morning (imho)

[tullynessle] 09/3/2010 08:31

Bought this morning - with all their accounting / analyst resources Carlyle considered SKS to be worth 120p. SKS management appear confident that the business is worth considerably more.

After all that due diligence, happly to hold and await developments.