Titan Europe Share Discussion Threads

[2andyman] 26/7/2012 09:29

tiswas

That is a cynical view, but being an old cynic myself and having observed maanagers' and directors' behaviour over many years this is my major concern.

This company has a bright future as a stand alone entity and can earn shareholders a very good return, so if the directors sell out cheaply my views of the managers of companies, in general, will have been confirmed.

[horndean eagle] 26/7/2012 09:27

See they are trying to take the Germans out of the equation by seeking just a 51% majority. Don't think they will get many punters taking up their offer. They will have to come back with a much higher offer with a cash element thrown in if they are to succeed. Not sure whether they are being serious or not and if not why they are wasting everyone's time.

[tiswas] 26/7/2012 09:18

I see there were 5,269,167 options outstanding as at 31/12/11 at an average of £0.47 so Directors will presumably keep their jobs and salaries and get a nice little kicker at the same time!

[mikejah] 26/7/2012 09:05

"Honourable people",yeah right,total stitch up more likely.
No word from the "independent" directors,I see.

[2andyman] 26/7/2012 08:59

The key players will be the holders of the large blocks of shares. They may already have been consulted about the offer.

A good signal of what has been going on behind the scenes, if anything, is if the Titan Europe board do not reject this pathetic offer out of hand. If they accept it what does that tell us?

[neg] 26/7/2012 08:41

I shall not be accepting this poor offer, don't even need to think about it.

[2andyman] 26/7/2012 08:34

I am against this takeover. This company is worth far more than the derisory offer by Titan International.

Without the takover I would expect within the next one to two years a reduction in debt, substantial turnover and profit increase and a reinstatement of the dividend leading to a doubling of the share price.

The biggest danger here is managerialism i.e. the directors of the company acting in their own interest as opposed to that of the shareholders and selling out at a ridiculously low price. I am not saying that anything untoward has been going on, but the fact that a poor market update coincides with a derisory offer makes me suspicious. The fact that a 'separate' group has been set up to consider any offer also gives me no comfort. Do people really believe that they will be genuinely independent and not open to influence of other 'interested' board members.

Again, I am not making any accusations and I hope that the Titan Europe board are honourable people but the derisory offer coming at this time causes me great unease.

Lastly, I want this company to remain British. Haven't we lost enough of our manufacturing base and industrial companies. If this comany is bought out by a foreign company that will be another loss of corporation tax for the treasury at a time when our country needs all it ccan get.

[tiswas] 26/7/2012 08:08

And the price falls as if it is a done deal!

What is going on here?

[tiswas] 26/7/2012 07:47

Even cynical old me is surprised by how low that offer is!

[mikejah] 26/7/2012 07:35

just an opening low ball shot imho

[mikejah] 26/7/2012 07:35

Just say no

[eddie catflap] 26/7/2012 07:11

11.7% takeover premium and a paper offer. They think they're buying this from Poundland. Laughable.

[smicker] 26/7/2012 07:06

Unbelieveable, absolutely disgusted

[kimboy2] 25/7/2012 19:47

IMV it all depends on Mefro. Do they need the money or are they happy to let their investment ride ? Perhaps there is a factory that Mefro want that TWI can leverage a deal with.

I have no doubt it will be a good deal for TWI. Last year's TSW PBT was £21m and that was after £37m on 'admin and selling costs'. There will be considerable synergies within that number.

We will see by August 14th apparently.

[smicker] 25/7/2012 16:55

I dont think the price will be anywhere near what we could have expected if the bid came as we were looking forward to the end of this recession/depression. If it begins with a 2 i'm happy to have been proved wrong.

[kimboy2] 25/7/2012 15:31

Depends on price.

[smicker] 25/7/2012 14:47

Caterpillar have had their best quarter ever and raise their 2012 outlook



Am now beginning to think we would be better off without the bid and wait for a year or two

[catandcrow] 24/7/2012 17:03

Typical premium is 45% from the undistrubed share price but think this will be lower I'm afraid. I don't think Titan woudl come back twice and walk away easily...

[tiswas] 24/7/2012 15:56

Kimboy

I am not normally a conspiracy theorist but the timing of the possible bid, middle of the summer when a lot of people are away, and the fact that we have a convenient profits warning just makes me think that there is more to this than meets the eye.

Certainly Titan do not seem to be rolling in cash, their 2011 annual report said:

LIQUIDITY OUTLOOK
At December 31, 2011, the Company had $129.2 million of cash and cash equivalents and $88.0 million of unused availability
under the terms of its credit facility. The availability under the Company's $100 million credit facility was reduced by $12.0
million for letters of credit used to provide working capital for the Sao Paulo, Brazil manufacturing facility. Titan expects to
contribute approximately $7 million to its frozen defined benefit pension plans during 2012.
Capital expenditures for 2012 are forecasted to be approximately $50 million. Cash payments for interest are currently
forecasted to be approximately $24 million in 2012 based on the Company's year-end 2011 debt balances.
In the future, Titan may seek to grow by making acquisitions which will depend on the ability to identify suitable acquisition
candidates, to negotiate acceptable terms for their acquisition and to finance those acquisitions.
Subject to the terms of indebtedness, the Company may finance future acquisitions with cash on hand, cash from operations,
additional indebtedness and/or by issuing additional equity securities. Cash on hand, anticipated internal cash flows from
operations and utilization of remaining available borrowings are expected to provide sufficient liquidity for working capital
needs, capital expenditures and potential acquisitions.


So another paper offer looks the most likely option especially with the debt they will have to take on.

Finally, the recent price action indicates to me that the big boys dont think its worth arbing on this one for a massive premium, would it not be unusual to get a 75-100% premium after they have admitted they are in bid talks? It certainly does not look like a competitive bid possibility.

Hence my guess of the take out price being 40-50% above where we are now and lots of talks having gone on or going on behind the scenes. It does not mean that my actual valuation isn't a lot higher and nearer yours.

[c1d] 24/7/2012 15:53

I think the deadline of Aug 14th comes from a fairly recent change in takeover rules which requires bidders to 'put up or shut up' within a shorter timeframe than was previously the case to prevent prolonged distractions to company management from predators who talk about making a bid but never actually come through with an actual offer.
If I have this wrong, someone please feel free to correct me.

[kimboy2] 24/7/2012 15:21

Well AFAIAC 140-145p wouldn't be worth bothering with. I am expecting about that by the end of the year even with todays announcement.

Not that my opinion will count for anything of course.

It is somewhat irritating that the broker isn't allowed to say anything as to how the numbers may be affected. The FSA protecting us by keeping us ignorant while, no doubt, all other parties know the score precisely.

There was a report the other day in the Dail Mail;



Titan International made an all-paper offer for the group in 2008 at 230p a share before walking away. It now has until August 14 to table a fresh offer and if it does decide to have another pop, dealers are confident it will have competition.

Titan Europe's current rating is said to be too low for a company exposed to the thriving agricultural industry as well as the commodity super-cycle.

Titan International, and any other bidder, would have to get the nod from Mefro Wheels, the privately owned German peer and owner of 26 per cent of TE's equity, before proceeding with a bid well north of £2 a share. Mefro could even decide to launch a bid itself, while cash-rich private equity players could come calling.


The idea of multiple bidders seems fanciful to me but who knows. Maybe TWI just wanted to force the issue one way or another.

Mefro has been acquisitive but IMV TSW is slightly out of their area, unless they are seeking to diversify.

IMV there are going to be synergies and areas of cooperation that make TWI the only real candidate. The only thing to be determined is the price.

I didn't realise that TWI had to put an offer in by Aug 14th. Perhaps it is something to do with their previous offer.

[tiswas] 24/7/2012 12:31

I agree with the above and I am sure that talks will have already flagged trading to TNI who would anyway take a longer term view.

So, where is anyone guessing the bid is going to be? My bet is 140-145p, unfortunately.

[kimboy2] 24/7/2012 10:36

IMV China and the earthquake are short term effects that will be reversed by the year end and the fall in the euro will be positive.

An opportune moment for a bid though. In the end the price will be whatever Mefro will accept. It would be difficult to stop TNI getting 75% when 50% are already voting for it.

I would suspect that the price with Mefro was the first thing that was agreed.