At this stage the deal looks 99.9999% certain to go through at 42p. It is possible to buy at 41.25p. If it takes 2 months for the money to come through, excluding dealing costs that's equivalent to over 11% compound interest.
In these uncertain times, that looks pretty attractive.
The mm bid price may be above 42p, but if you check todays trades no shares were bought above 41.999p. So I'm not sure you are right there.
I sold after the 2nd bid came in, because it coincided with the market crashing due to BRexit, and seemed some good bargains about to churn the money into.
Be surprised if another bid comes in, although always possible.
"On 25 May 2016, the boards of WSP Global Inc. and Sweett Group plc announced that they had reached agreement on the terms of a recommended cash offer to be made by WSP for the entire issued and to be issued share capital of Sweett"
That effectively means the Sweett BoDs said they would recommend shareholders accept that offer, not - recommend it until something better comes along. If they felt there was the chance of another offer they should not have recommended the original offer. It does not stop them doing their best to negotiate the best deal they can, and saying it is the best deal available at that time, and short of an improved offer being received then they could recommend it.
it's like being guzzumped. (No idea how to spell that.) There is nothing illegal about it, but it aint very honourable.
They left it late in the day, but a counter offer has come - and of course it is better, so as a shareholder I'm pleased, but as someone who likes directors of companies I invest in to be honourable chaps I'm pretty disgusted. I won't be doing business with any of this BoD anytime soon.
Well it does not look like there are going to be any counter bids (sadly) and now we have a timetable.
If we do nothing we should get the money on 22nd July - about 6 weeks away. The alternative option is to sell now for around 34.5p. Doing a quick calculation - the difference between the 2 options including dealing costs is around 2%. 2% over 6 weeks. That's equivalent to about 19% p.a.
Any sane person offered a guaranteed 19% return in the current environment would, I am sure, take it without thought.
So I'm just going to sit back and wait for the money to arrive in about 6 weeks.
I suppose it is worth hanging on a little while to see if there is a counter offer - but I doubt it. My guess is the current BoDs believe they could get it back to the glories of 60p+ but see it is as a mammoth task, and are recommending the easy way out.
Read Stockdale Securities's note on SWEETT GROUP, out this morning, by visiting https://www.research-tree.com/company/GB00B23QD109
"In its core operations Sweett Group expects to report for year-end March 2016 adj. PBT (before three one-offs totalling £0.8m) of c.£3.0m on revenue of £54.9m (vs £51.5m in FY2015). For FY2016 the aggregate exceptional charge is c. £5.1m. Net debt of £2.6m at end March 2016 was lower than the company expected but a number of significant cash outflows are due shortly and banking facilities need renewing. Our coverage should resume when final results are reported...."
I'm a bit surprised by the drop today. I thought the trading statement was positive. We know they've got some clearing up to do of past errors and these will involve one off costs, which will hit profits, but the underlying business sounds as if it is doing well, and future prospects look positive. (Provided they don't have any more fo pahs.)
Nice slimmed down, well organised, business. 6.6% rise in sales. Still profitable despite all the one off costs. Healthy order book, some very impressive clients, manageable and reducing net debt, good pipeline.
It's still a risky investment IMHO, but the upside looks a lot bigger than the downside from here.
They have just got over a time and money consuming legal dispute, and now they have a money and time consuming contractual dispute. It looks like they will not get as much for the sale of the business as they expected, and now they are going to have to spend time and paying expensive international accountants to agree how much lower the sale price is going to be.
Figures are not good, but I am encouraged. It seems like all the mucky bits within the company have been cleared out, they have a clear focus & strategy where the markets are healthy and the future looks good; peripheral businesses are being offloaded, and a lot of uncertainty has been removed.
Let's hope they get a good price for the ME business, then the picture becomes a lot clearer; and the indications are it will revert to a healthy growing business.
Be interesting to see how the market views this, with £10 write-down on book value (£6m goodwill, so what was the other £4m), and not clearing debt completely (which appears to have risen over last six months? - late payments?). Plus Middle East now being reviewed...
Not the greatest results but as to be expected I guess. Common knowledge that the APAC part of the business is losing money so once the sale of that business is complete should see a good turn around. UK and Europe do look very healthy moving forward.
Dr: A very thorough analysis; and one which overall I agree with.
It seems there has been some bad practices, but the affect of these has probably been more tan accounted for in the share price; and there is a new management team who seem determined to grow in a clean way. Despite its problems the business, as witnessed by your figures on sales and order book, has not really been affected.
The potential (at this price) is huge, but the risk is considerable too.
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