1) Italian Trains see First as being entry into UK market and already have large holding in FGP .
2) Grayling is talking to FGP about East Coast as they had been unsuccessful under bidder.
Whatever happens, I'm out soon because the pension situation terrifies me!
I think more likely is a spin off of us operations. Still not convinced it will happen but in my opinion may deliver best outcome for shareholders. A mix of shares, special dividend and debt reduction could leave shareholders in a much stronger position.
West face capital are pushing for the above, but have been ignored to date.
Is it possible that there was something nasty lurking out of sight? Of course this is completely unconnected but didn't the Telegraph point out that FGP have a pension deficit of roughly £10bn. but a market capitalisation of roughly £1bn. ? If Scotland did become independent then who would pick up the bill if First failed?
I am surprised that no details leaked out about the bid. The good news is that Apollo though it was worth a look and that made a second ( probably better) offer. The bad news is we are back to where we started. I imagine the final results on 31st May will gloss over the offer and concentrate on The Beast from the East. I still think there is a decent business here if the focus was on cutting loose the dead wood and lowering debt. After all that`s what would happen under new ownership. Still holding for now, as its not too big a chunk of my portfolio.
Why didnt they reveal the price? My opinion is because they didnt want to put themselves under pressure. As I dont know what price was offered I cant say what are management doing rejecting £x as if I argue that management should have accepted the bid its assuming that the Apollo bid was decent.
Apollo could have chosen to go hostile and direct to shareholders, but have decided against it.
Management better have something decent up their sleeve, cant believe one shareholder is happy with current management. Support for the board is at all time lows. But its amazing how long poor management that runs companies with seemingly no regard for shareholders can stay in post. Look at premier foods.
I think is disgraceful that the board of First Group did not impart the information contained in the bid to shareholders
, rejected it out of hand without any reference to shareholders. The company is owned by the shareholders and the board work for the company-how can this be right?
Mangoo what's a done deal? Why are you coming to that conclusion. Even if a deal is still possible, which it definitely is but not holding my breath, to say it's done is...simply wrong.
No idea what management thinking here but it probably is along the lines of 'let's put together a half cobbled plan by the end of May to show why rejecting the deal is a good idea'.
Hopefully Apollo will realise that the views of management and shareholders are not aligned and that they should bypass management as soon as possible and go hostile. Whether they will do that who knows, as often bidders don't like going hostile as it can harm the thing you are trying to save.
Hi Pyueck. I don`t disagree with your predictions. I am only happy that the bad news isn`t today and there is still a sliver of hope. I absolutely agree that management don`t have a handle on this. The bad deal was done years ago buying Laidlaw. Current management are ignoring this, but the surgery needs to be done. Still holding as the break up value is there.
Hairy disagree - think in these cases no news is bad news. If they had agreed a price they would come to the market with it. Fully expecting on the 9th Apollo to say something on the lines of 'Despite making significant efforts to engage with management to discuss a price at a significant premium to the pre-announcement price, due to Firstgroup management not wanting to engage, we will not be proceeding with this acquisition'.
Let's hope not but got zero confidence in management doing the right thing here.
The daily tune in has revealed - no news, at least Apollo hasn`t walked away. A steady turnover in shares but nothing to excite the market. Sterling falling can only help. Still think some one will make a move whether it is management deciding to be a bit pro-active or a straight buy out. Any of the two should be better than the status quo.
As I said before the takeover bid was announced a sale of Greyhound (worst performing division) at a decent price to pay down debt would in my opinion be highly advantageous for the shareprice.
In terms of whether doing that, accepting Apollo's (or somebody else's) bid or continuing as is all depends on:
- What somebody will buy Greyhound for - somebody may actually buy it to shut it down in part or whole and sell the depots off!
- What Apollo's offer was
- How the business is performing since the last pretty bad (but let's not forget not totally dire) trading update
We have no idea what Apollo's bid was, maybe it was 80p and the board were right to reject it. Think the board should let shareholders know though.
Also no idea if Apollo are lining up a new bid or even a hostile takeover. As GKN showed ultimately its shareholders not management that decide if a takeover happens. Can't imagine too many FGP shareholders have much affection for the current management and would not want out at anything 125p plus.
I have no confidence though in management doing the right thing here, and that worries me.
It is always painful, for many reasons, accepting a loss. In this case I am fortunate enough to be in the black, but with other holdings over the years I have eventually seen the merit in moving on when It doesn`t go to plan. Its like owning a dud car with a shiny paint job. FGP needs a major overhaul and the current board have no plans to do it. Move aside and let someone with a plan take over. I believe FGP is almost certain to have new owners so will hold out till 130p comes along.
200p!!!! That would be a rise of over 2.5 times from the price (77p) before the market got wind of the deal. I think 150 would be amazing, I think 125-130 more likely.
Whatever the price, management don't let this opportunity go. As I learnt with PFD, before a firm offer is made shareholders can say oh i want x or y price above the amount offered, but let's be clear if they walk the price will be back below 100p in an instant.
Myself I am even tempted to sell out now as I have no confidence that the management will do the right thing by shareholders here, just like PFD didn't. They may be thinking about their nice cushy jobs, and thinking why shake the tree.
Maybe they at the end of May will come out with a half baked story of how things will improve. And then inevitably we will get the next update giving excuses as to why not just were those targets missed but the business is going backwards.
Just like PFD did, when they had the takeover approach they went to shareholders with all these incredible targets the business would be meeting. A year later they ripped it up and replaced the targets.
Management of FGP, the market has no confidence in you or your promises. Shareholders have been fed a barrel full of excuses for years and we are fed up of it. The best thing for shareholders is an exit at a half decent price now, or an immediate breakup and sale of the business if this raises more cash than what Apollo is offering.
The status quo is not an option, you may like it to be but it is not.
My message to Apollo is, don't overly worry what management thinks. FGP's shareholders are very open to an offer, offer anything over 125p, go hostile and you should get the vote from shareholders.
Pleased to see the price nudging up. A dip in Sterling after Carney`s comments, should work wonders for the number crunchers at Apollo. Still difficult to call. Holding out for now. Its worth at least 130p even with the existing set-up.
Under normal circumstances I'd see buying a company to break it up as asset stripping. With First Group it is probably their only future. They are supposed to have a railway expert in Tim O'Toole who has contrived the most ridiculous industrial action of recent times. Having lost Thameslink because it effectively backed guards on trains against Dept. for Transport wishes, it gets into a dispute with unions on South West Trains regarding the wording of a statement on train manning. The strikes may, or may not, have taken place when the CEO was enjoying his Winter home in Florida. Unfortunately he didn't have time to familiarise himself with the weather on the same country's same seaboard. Which is a bit inconvenient when it comes to rubbish excuses to market come results time.
Every constituent part of First Group could have high cash turnover and produce enough profit to pay a small dividend. But First Group still haven't got debt under control, despite the fact that the constituent parts of the company appear to be worth a lot more than the amount outstanding.
If a serious bid comes to light, I'd imagine Act 2 would start with rumours of a bid for US school buses and Greyhound.
It would appear the market is a little cautious about a deal going ahead. FGP is a good buying opportunity for a cash rich fund like appollo. I imagine the current management will only listen after a big push from the big investors, as they seem fairly comfortable with the way things have been going. This could be a good business, but i`m afraid it needs some tough decisions. Appollo will not pay big money for this business as there are a number of tricky factors to deal with. Last tear I totally believed we would be at 200p + . Board needs to change : 130p should do it.
Nice pricing action to end the day at the high.
I assume that the details of the indicative bid level will come out tomorrow or at least in the Sunday press. Otherwise there is a false market.
Have only been a holder for the last 5 months so haven't put up with the last few years anguish (although the last 5 months have been hair-raising in themselves).
Would hope that Apollo will find a way to get the board to talk with in a constructive manner but am a bit concerned about the talk from the unions. Don't want this becoming a political football.
Partially agree but remember the stock has risen from 77p to 110p, I suspect large based on leaks from the takeover rumour. That's a 43% rise, not too shabby in anybodies book.
People can say 'Oh it's opportunistic' and 'the price was more a year ago', but we are where we are. Every takeover opportunity is an attempt by the buyer to get a good deal.
I thought that the price at 77p reflected a harsh assessment by the market of FGP's potential, but not completely unjustified considering the companies (and particular this managements) consistent failure to meet targets (dividend payments, double digit margins etc...) and a constant ability to come up with excuses for poor performance.
I have seen nothing as of yet from the existing management to give me any confidence that they will turn the company round and deliver consistent returns to shareholders. What I have seen is a management that have rewarded themselves very nicely while giving shareholders nothing.
Yes maybe Apollo's first bid was too low, who know what it was, let's say it was 110p. But before jumping to reject this bid management need to have a long hard look at themselves and say do I honestly believe I will be able to deliver more value to shareholders than this? Maybe the answer is yes, way way more in which case ok reject it, but then be prepared to fall on your sword if you don't deliver it. Maybe the answer is maybe, therefore seek 130-150p and get the deal done, don't let this good opportunity for shareholders go. Maybe the answer is no, management have an obligation to get the deal done.
There is no room for sentiment of looking back to rosier days with takeover bids. The bid is not being made in mid 2017 when the share was comparatively riding high, it's being made in early 2018 when the company has recently announced a profit warning.
Please board don't do a premier foods and immediately take a defensive strategy and come up with some half baked plan of why the bid is undervalued and it should be rejected.
Management have destroyed shareholder value with this stock. Anything over £1.30 needs to be carefully considered as to if it is in the best interest of shareholders to accept. If management reject it and then don't deliver on the promises for the reasons why, it will not be forgotten. I have not forgotten premier foods!
National Express is on a PE of 16.3
Stagecoach is on 22.25
First is on 11.6 at today's closing price
Taking the a6 of Nat Express implies 50% from here ignoring a control premium.
OK - this is a VERY crude analysis - but I would think that Apollo has cheaper borrowing costs than First and cash flows are pretty stable, so would assume they would have a serious interest.
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.