Monday, June 27, 2011

Share Price Alert: The Warehouse Group Ltd 2




Another preemptive Share Price Alert, this time for The Warehouse Group Ltd [WHS.NZX].

The stock price has taken a dive of 23c over the last 2 weeks of June and finished trading down 2c to close at $3.43 at close of business last Friday.

The stock has previously found support around these levels at least 5 times over the last year (see 1 year chart above).

In an interesting turn of events late on Friday though, incoming CEO for Woolworths Ltd [WOW.ASX] Grant O'Brien, let it slip at while addressing members of the New Zealand Food & Grocery Council in Auckland that his company was still interested in acquiring additional shares in the big red retailing icon.

This of course changes everything and while the spectre of the Warehouse has been handing over its head for almost 5 years, this new indication from one of two possible bidders ups the ante again.

The two bidders paid between 5-6 bucks approx for their respective 10% shareholdings, so any value from a bid from Woollies would have to come north of the higher figure.

Buy on short-medium term speculation, for a tidy profit.

Share Price Alert Series

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Disc: I own WHS shares in the Share Investor Portfolio


Warehouse Group Ltd: 2010 Full Year Profit Analysis
Share Investor Q & A: Questions to The Warehouse' Ian Morrice
Long Term View: The Warehouse Group Ltd
Share Investor Short: Warehouse Group yield worth a look
The Warehouse Group: 2010 Interim Profit Review
The Warehouse: Big Brands, Big Opportunities
Warehouse strike opportunity to buy
Long Term Play: The Warehouse Group
Share Investor Short: Warehouse Group yield worth a second look
Woolworths supermarket consolidation an indicator of a move on the Warehouse?
Stock of the Week: The Warehouse Group
Warehouse 2009 interim profit a key economic indicator
When will The Warehouse bidders make their move?
Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Discuss WHS @ Share Investor Forum - Register free
Download WHS company reports

Shop online at The Warehouse


NEW - From Fishpond.co.nz | Think Bigger, By Michael Hill

c Share Investor 2011

Posted by Darren Rickard at 5:30 AM 0 comments Links to this post

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Sunday, June 26, 2011

Woolworths puts The Warehouse back on the shopping block



Incoming CEO of Woolworths Ltd [WOW.ASX] Grant O'Brien let it slip at while addressing members of the New Zealand Food & Grocery Council in Auckland last Friday that his company was still interested in acquiring additional shares in the The Warehouse Group Ltd [WHS.NZX]

"We would very much like to be a larger owner of The Warehouse" and "It is a business that is of interest to us."and if you didn't get it the first two times, "It's a terrific business and it's a business ... that we're happy to be a part owner of..." NZ Herald, 25 June 2011

Subtlety is clearly not one of Mr O'Brien's traits but I guess these comments must be put in the context of an address that was much longer than these throw away lines and focusing on Woolworth's interests as a whole in this country rather than just on Wow's holding in the WHS.

The company is apparently interested in increasing the size of their business in New Zealand via the expansion of its Countdown supermarket brand and a full takeover of the Warehouse would be able to achieve part of that plan as the Warehouse have key stakes in retail sites that are hard to find in established areas.

Put this together with the fact that Ted Van Arkle, who has close ties to WOW, is to be appointed an independent director of the WHS on July 1 and investors have an interesting scenario to ponder.

There are of course several impediments to Woolies making a full takeover offer, not the least of which is their main competitor in this country, Foodstuffs, owning a 10% stake in WHS themselves, a similar sized stake to Woolworths.

There is still some argument over whether either Foodstuffs or Woolies have clearance to make a takeover for the red sheds. The last the market knew where the state of play on this was back in August 2008 when Woolworths decided to seek leave from the Supreme Court to appeal the decision of the Court of Appeal setting aside clearance for Woolworths to acquire The Warehouse. There has been no indication from Woollies as to whether they did get around to seeking leave and in the absence to the affirmative we must conclude that no filing has been made.

Having said that, the Commerce Commission, who blocked Woolies and Foodstuffs in the Court of Appeal stated back in October 2008 that Woolies simply needed to just re-apply to the commission rather than pursue the Court of Appeal decision in the Supreme Court. This was in the light of The Warehouse dropping their "extra" format stores which was the key reason why the commission gave for blocking a sale.

Another possible impediment would be Warehouse founder Stephen Tindall and his nearly 53% stake. Negotiations with him over price would have to start on the high side and his full support would be crucial to a successful takeover.

A full takeover offer is possible, contrary to what other business media are saying. Foodstuffs blocking stake of 10% means the threshold for compulsory takeover that is reached with 90% of shareholder acceptances is a key block to Woollies making a full bid for the company but the right pressure (from some of the possible scenarios below)and the right price might see Foodstuffs fold in the light that the company is under intense financial pressure and even more intense competition from their rival. I know this is a big stretch given that it would allow Woollies to almost double their retail footprint in this country but anything is possible.

The 10% stake that Foodstuffs owns may be able to be got around another way though, so my opinion again differs from other market commentators on this. According to the Takeovers Code a partial offer can be made for the target company of over 50% and if over 50% is not achieved shareholder approval can be made for acceptances under 50%.

This would allow any bidder to effectively take control over the company and make it difficult for other major shareholders like Foodstuffs to remain owners.

A bidder can also buy shares on-market up to a 20% stake without triggering any takeover play.

I have written extensively on this over the last five years since the first interest in buying a stake in the company came from Foodstuffs back in 2006 and have always been keen to hold onto my shares for the long-term. Given the poor performance of the company under current management, overseen by outgoing CEO Ian Morrice, my opinion now is that the company needs new direction, new life and probably a new owner and its stagnation as a business cannot be sustainable in the long run.

As much as I hate to say it, bring on the Aussies, they just maybe the saviour of this once great kiwi retail icon.

Lets hope if they do make a bid though that they do not get a bargain!


Disc: I own WHS shares in the Share Investor Portfolio


Warehouse Group Ltd: 2010 Full Year Profit Analysis
Share Investor Q & A: Questions to The Warehouse' Ian Morrice
Long Term View: The Warehouse Group Ltd
Share Investor Short: Warehouse Group yield worth a look
The Warehouse Group: 2010 Interim Profit Review
The Warehouse: Big Brands, Big Opportunities
Warehouse strike opportunity to buy
Long Term Play: The Warehouse Group
Share Investor Short: Warehouse Group yield worth a second look
Woolworths supermarket consolidation an indicator of a move on the Warehouse?
Stock of the Week: The Warehouse Group
Warehouse 2009 interim profit a key economic indicator
When will The Warehouse bidders make their move?
Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Discuss WHS @ Share Investor Forum - Register free
Download WHS company reports

Shop online at The Warehouse

Think Bigger
NEW - From Fishpond.co.nz | Think Bigger, By Michael Hill

c Share Investor 2011

Posted by Darren Rickard at 9:01 AM 0 comments Links to this post

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Saturday, June 25, 2011

Share Investor Portfolio: Value @ 25 June 2011

The Share Investor Portfolio was down in the forth week of June. The portfolio slumped by 2.22% or $5996.41 on the June 17 update . For the first 24 weeks of 2011 the portfolio has increased by 11.45 % or $28895.42 . This weeks fall was due to medium drops throughout the portfolio. WHS was down 8c, SKC down 3c and FRE down 23c were the biggest contributors and other stocks fell less and make up a smaller part of the portfolio so had less impact. The only stock to contribute significantly in a positive way was MFT, which was up 5c.

The total of unspent dividends and interest in the bank as at 26 May from the 2010 - 2011 earnings years is $25382.95 at close of reporting season for 2010 and at the end of the 2011 1st half reporting year. There are also approx $55000.00 in tax credits earned from the portfolio since it began in late 2002.

The Share Investor Portfolio has increased in value by 16.24% or $42652.67 since I began tracking it for this blog on October 11 2010


Share Investor Portfolio as at 17:30:00, Friday 24 June, 2011 (NZT)
Stock
Quantity
Cost price
Total cost
Market price
Market value
Change
%
AIA

2,000 $1.700 $3,400.00 $2.235 $4,470.00 $1,070.00 31.47%
AIA

2,000 $1.510 $3,020.00 $2.235 $4,470.00 $1,450.00 48.01%
AIA

558 $0.000 $0.00 $2.235 $1,247.13 $1,247.13
AIA

754 $2.150 $1,621.10 $2.235 $1,685.19 $64.09 3.95%
ASBPB

3,109 $0.000 $0.00 $0.750 $2,331.75 $2,331.75
ASBPB

6,891 $1.000 $6,891.00 $0.750 $5,168.25 $1,722.75 25.00%
BGR

619 $0.000 $0.00 $1.350 $835.65 $835.65
BGR

2,381 $0.990 $2,357.19 $1.350 $3,214.35 $857.16 36.36%
FBU

284 $0.000 $0.00 $8.670 $2,462.28 $2,462.28
FBU

830 $9.750 $8,092.50 $8.670 $7,196.10 $896.40 11.08%
FPH

3,000 $2.350 $7,050.00 $2.740 $8,220.00 $1,170.00 16.60%
FPH

1,365 $3.720 $5,077.80 $2.740 $3,740.10 $1,337.70 26.34%
FPH

635 $0.000 $0.00 $2.740 $1,739.90 $1,739.90
FRE

2,054 $0.000 $0.00 $3.150 $6,470.10 $6,470.10
FRE

6,577 $3.630 $23,874.51 $3.150 $20,717.55 $3,156.96 13.22%
GFF

586 $0.000 $0.00 $1.320 $773.52 $773.52
GFF

1,414 $2.330 $3,294.62 $1.320 $1,866.48 $1,428.14 43.35%
HLG

299 $0.000 $0.00 $3.570 $1,067.43 $1,067.43
HLG

701 $2.530 $1,773.53 $3.570 $2,502.57 $729.04 41.11%
KIP

763 $1.480 $1,129.24 $1.045 $797.34 $331.91 29.39%
KIP

237 $0.000 $0.00 $1.045 $247.67 $247.67
MFT

1,000 $7.960 $7,960.00 $10.150 $10,150.00 $2,190.00 27.51%
MFT

1,838 $8.000 $14,704.00 $10.150 $18,655.70 $3,951.70 26.88%
MFT

1,375 $4.200 $5,775.00 $10.150 $13,956.25 $8,181.25 141.67%
MFT

787 $0.000 $0.00 $10.150 $7,988.05 $7,988.05
MHI

1,646 $0.860 $1,415.56 $0.910 $1,497.86 $82.30 5.81%
MHI

7,000 $0.630 $4,410.00 $0.910 $6,370.00 $1,960.00 44.44%
MHI

494 $1.050 $518.70 $0.910 $449.54 $69.16 13.33%
MHI

860 $0.000 $0.00 $0.910 $782.60 $782.60
PPG

31 $0.000 $0.00 $0.240 $7.44 $7.44
PPG

1,500 $0.440 $660.00 $0.240 $360.00 $300.00 45.45%
PPG

1,004 $0.800 $803.20 $0.240 $240.96 $562.24 70.00%
PPL

1,000 $3.090 $3,090.00 $1.030 $1,030.00 $2,060.00 66.67%
PPL

1,000 $2.870 $2,870.00 $1.030 $1,030.00 $1,840.00 64.11%
PPL

939 $4.200 $3,943.80 $1.030 $967.17 $2,976.63 75.48%
PPL

975 $0.000 $0.00 $1.030 $1,004.25 $1,004.25
PPL

1,086 $1.530 $1,661.58 $1.030 $1,118.58 $543.00 32.68%
RYM

555 $0.000 $0.00 $2.690 $1,492.95 $1,492.95
RYM

4,445 $1.970 $8,756.65 $2.690 $11,957.05 $3,200.40 36.55%
SKC

5,750 $7.430 $42,722.50 $3.590 $20,642.50 $22,080.00 51.68%
SKC

1,000 $7.600 $7,600.00 $3.590 $3,590.00 $4,010.00 52.76%
SKC

2,750 $7.700 $21,175.00 $3.590 $9,872.50 $11,302.50 53.38%
SKC

1,431 $8.750 $12,521.25 $3.590 $5,137.29 $7,383.96 58.97%
SKC

272 $4.720 $1,283.84 $3.590 $976.48 $307.36 23.94%
SKC

25,712 $0.000 $0.00 $3.590 $92,306.08 $92,306.08
STU

78 $0.000 $0.00 $2.670 $208.26 $208.26
STU

303 $4.740 $1,436.22 $2.670 $809.01 $627.21 43.67%
WHS

4,500 $3.730 $16,785.00 $3.430 $15,435.00 $1,350.00 8.04%
WHS

6,979 $6.000 $41,874.00 $3.430 $23,937.97 $17,936.03 42.83%
WHS

15 $3.710 $55.65 $3.430 $51.45 $4.20 7.55%
WHS

3,506 $0.000 $0.00 $3.430 $12,025.58 $12,025.58

28.07%

Total cost Market value Change

$269,603.44 $345,273.87 $75,670.43


Share Investor Portfolio @ Share Investor

Share Investor Portfolio: Value @ 17 June 2011
Share Investor Portfolio: Value @ 10 June 2011
Share Investor Portfolio: Value @ 3 June 2011
Share Investor Portfolio: Value @ 27 May 2011
Share Investor Portfolio: Value @ 20 May 2011
Share Investor Portfolio: Value @ 13 May 2011
Share Investor Portfolio: Value @ 6 May 2011
Share Investor Portfolio: Value @ 29 April 2011
Share Investor Portfolio: Value @ 22 April 2011
Share Investor Portfolio: Value @ 15 April 2011
Share Investor Portfolio: Value @ 8 April 2011
Share Investor Portfolio: Value @ 1 April 2011
Share Investor Portfolio: Value @ 14 March 2011
Share Investor Portfolio: Value @ 8 March 2011
Share Investor Portfolio: Value @ 28 February 2011
Share Investor Portfolio: Value @ 21 February 2011
Share Investor Portfolio: Value @ 14 February 2011
Share Investor Portfolio: Value @ 7 February 2011
Share Investor Portfolio: Value @ 31 January 2011
Share Investor Portfolio: Value @ 24 January 2011
Share Investor Portfolio: Value @ 17 January 2011
Share Investor Portfolio: Value @ 10 January 2011
Share Investor Portfolio: Value @ 3 January 2011
Share Investor Portfolio: Value @ 27 December 2010
Share Investor Portfolio: Value @ 20 December 2010
Share Investor Portfolio: Value @ 13 December 2010
Share Investor Portfolio: Value @ 6 December 2010
Share Investor Portfolio: Value @ 29 November 2010
Share Investor Portfolio: Value @ 22 November 2010
Share Investor Portfolio: Value @ 15 November 2010
Share Investor Portfolio: Value @ 8 November 2010
Share Investor Portfolio: Value @ 1 November 2010
Share Investor Portfolio: Value @ 25 October 2010
Share Investor Portfolio: Value @ 18 October 2010
Share Investor Portfolio: Value @ 11 October 2010
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Related Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)
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Security Analysis: The Classic 1934 Edition
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