Monday, February 26, 2007

Restaurant Brands New Zealand Takeover

Bongo666 wrote:

My observation is, surely they have run their ruler over it fully by now, if it is such a good fit with their purchase of Tegal(and I believe it is given the obvious synergies-cheap fricken chicken!!) why havent they moved yet? Could they be biding their time for another crap announcement? Seeing as PEP own the Collins group, a company that has been on my radar since 2000 and one that I mentioned on www.sharetrader.co.nz was a possibility of acquiring RBD, and looks like it is hungry to grow into a trans Tasman food group the absence of a bid for RBD seems curious to me. I am toying with the idea of buying a large stake, (for me) of up to 100000 shares. The possibility of this happening looks 85% certain. What do you think Snoop?


Snoopy from Share Investor Forum Wrote:

There are still some unknowns there Bongo. We don't know how much RBD will have to shell out to renew the franchises on the other half of their KFC and PH stores in May. There is the possibility that even if private equity makes a bid, and shareholders approve, that YUM will veto it. After all, RBD have been very compliant with YUMs requests on the store upgrade plans. And YUM get the franchise payments from RBD more or less regardless of the profitability of RBD itself. Why would YUM want to see RBD delisted? Do you think they would rather negotiate with a team of hard nosed bankers, or Vicky and the current crew? Finally you have to consider what might happen on the 15% chance, (assuming your figures are correct), that no bid is received. Maybe the share price will drop back to 95c or so? You could still have an 85% chance of a takeover deal going through and have an expected negative return if the downside payoff is significantly greater than the upside payoff. IMO, the only reason the share price has been creeping up in recent weeks is takeover speculation. I have my own holding in RBD that I am sitting on (neither buying more nor selling down) at the moment. You Bongo will have to make your own investment decision! SNOOPY discl: hold RBD

Happy Investing,

Share Investor

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c Share Investor 2007