Wh Smith Share Discussion Threads

[0238jr] 19/7/2004 13:24

sell recommendation in IC:



16 July 2004

Permira considers WH Smith bid again
Permira, the private-equity company that pulled out of bidding for WH Smith last month, has said that it is possibly interested in bidding for the retail chain again. Permira has appointed Debenhams' chairman John Lovering to its team in an effort to try again.

Market rumours suggest that Permira will attempt to woo shareholders with a 340p-a-share offer. It withdrew its indicative 371p-a-share bid last month when the trustees of WH Smith's pension fund said they would need a cash injection of up to £250m to plug the fund's deficit.


It seems unlikely that, even if Permira does bid again, WH Smith's board will be interested in considering a lower offer. The shares, at 316p, are trading on a multiple of 17 times this year's expected earnings, which is far too high for the struggling retailer. Sell.

[0238jr] 19/7/2004 13:23

sell recommendation in IC:



16 July 2004

Permira considers WH Smith bid again
Permira, the private-equity company that pulled out of bidding for WH Smith last month, has said that it is possibly interested in bidding for the retail chain again. Permira has appointed Debenhams' chairman John Lovering to its team in an effort to try again.

Market rumours suggest that Permira will attempt to woo shareholders with a 340p-a-share offer. It withdrew its indicative 371p-a-share bid last month when the trustees of WH Smith's pension fund said they would need a cash injection of up to £250m to plug the fund's deficit.


It seems unlikely that, even if Permira does bid again, WH Smith's board will be interested in considering a lower offer. The shares, at 316p, are trading on a multiple of 17 times this year's expected earnings, which is far too high for the struggling retailer. Sell.

[goliard] 12/7/2004 12:24

Back it drops to 317-318, but i'm sure a few were caught out early, might be worth a punt for a quick 5% now though.

[goliard] 12/7/2004 08:22

People buying this am on the hope of a 340p bid. Bad idea in my opinion, the mm have opened up the spread and even if a 340p bid came through, the price is unlikely to rise any further short term.

[jeffian] 08/7/2004 19:40

"Clearly undervalued" in what way, FTreader? Without the support of a bid, what are an ailing retail business, static wholesale/distribution business and tiny publishing business worth? Certainly no sign yet that current management has the answers as to how to turn it round.

Regards, Ian

[ftreader] 08/7/2004 16:38

Not sure but since shares were clearly undervalued at 260, current price is a buy/hold I'd say even if no bid emerges.

[croquetman] 06/7/2004 11:06

Any comments on the bid. Is it completely dead?

[sidebar] 23/6/2004 17:47

Merrill Lynch saw a 50 pct chance that Permira would come back with a firm
offer of around 330-340 pence, and predicted downside to 250 pence if Permira
walked away.

[adamsouthwest] 23/6/2004 17:25

Careful:

If this is "risk free" at today's price (304p-310p) what was it when it was trading sub 300p between mid December and the bid rumour in mid April?
I would say that without any bid on offer this is on the way down again to about the 275p mark.
THey are a hopeless shower with no real niche market and no vision as to a way forward.

[bigboyo] 23/6/2004 11:37

sidebar

dealing in shares and ripping companies off are two different scenarios

smiths has a good solid , albeit unexciting, future. take the divi and over 20 years you have the basis of a solid investment.

note also that smiths has a wonderful cashcow in its wholesale distribution business which it could demerge or sell.

[careful] 23/6/2004 11:12

SMWH is trading on just over 3 months sales.
Venture capitalists like the assets also.

This is a risk free punt at todays price.
I bought this morning at 304.

[mug punter] 23/6/2004 08:04

Hmmmm,

Luvverly stuff.

[speny] 22/6/2004 18:21

Bid talks supsended, will be a very interesting watching this tomorrow, top down!!!

[0238jr] 17/6/2004 12:18

took a bit of a hit yesterday- closed positions for a loss.

but any more wobbles on the bid and there may be further opportunities

[feedthegoat] 17/6/2004 12:12

Long..this bids going through.

[0238jr] 16/6/2004 08:57

short too- looks as though it could fall all the way back again, and pretty quickly too.

[mug punter] 15/6/2004 22:45

I'm short.

This looks like the irressistable force and the immovable object.

It will need a hell of a lot of horse trading to get this one back on track again. Remember venture capitalists (sorry private equity entities) normally want a get out and an earner within three years !!

[firkin] 15/6/2004 18:05

260p - 275p. This is a big gamble even at 325p. Plus or minus 50p! The bid is 940m and the Trustees want 200m extra up front and 50m over an unspecified period instead of 250m over 10 years as agreed with the existing management to fund the deficit. So bidder has to fund an additional 200m from day one instead of 20m (or less if the market goes up) a year from profits over 10 years. It looks a walk away job to me unless the terms of the pension fund sub are eased. The Chairman of trustees is quite right to have spotted the extra risk of a company with enormous gearing as compared to existing W H Smith.
I think my figures are about right but please check before acting.

[careful] 15/6/2004 16:49

the logic is baffling.

Predator thinks Smwh is worth 370+ if they can get the same deal on pension as SMWH.
Predator is refused.

What is the correct value after he walks away?

[bigboyo] 15/6/2004 14:31

looks like pension fund situatio will scupper any deal

[croquetman] 16/5/2004 16:58

Has anyone any idea about the timeframe associated with this ongoing bid?

[tanesha12] 21/4/2004 07:55

It has also emerged that other retailers have considered a bid for the ailing news and books group. Stuart Rose, the former chief executive of fashion group Arcadia, is said to have been among those to have run the numbers. source: guardian

[pictureframe] 20/4/2004 09:32

Yes its quite normal to see around 10% discount for risk