Sunday, July 11, 2010

Jan Cameron ready to move on Postie Plus Group?

Not totally sure what her end game is but Jan Cameron, ex Kathmandu Ltd [KMD.NZ] and retailer with several different brands selling goods to the public, along with nearly 10% of Pumpkin Patch Ltd [PPL.NZ] has just topped up her holding in Postie Plus Group Ltd [PPG.NZ].

On Monday 5 July she bought 600,000 shares to take her holding in PPG to 19.26% or 7,702,537 shares. She previously held 17.76%.

Under the Takeovers Code the owner of 20% or more of shares in a company must make a bid for 51% of that company.

With 32,297,463 shares held by family associated with PPG and various smaller shareholders like myself and larger holders like ACC, Jan would only have to purchase a further 12,697,463 shares to make a play for a 51% holding. Just over $3.8 million.

The market capitalisation of PPG is just $12 million.

What are Jan's intentions though?

Well, one can only do some fancy guesswork on this so lets have a go.

Jan has had a holding in PPG for many years and just two years ago snapped up their distressed manchester brand Arbuckles and used some of the 23 store sites to install her own businesses.

Postie Plus runs three brands. Baby City, Postie and Schoolltex. Baby City being the most successful of the three. Overall though the company hasn't turned a profit for the last 3 years and its recent result, the half year to 31 Jan 2010 is another significant loss. Management have performed poorly over the entire 7 year listing of the company and any redemption from PPG shareholders would surely lay in how much they could get if they sold the company to a better operator.

What I think Jan is doing is buying up and waiting until the company gets in such a state the remaining shareholders will be more than willing to sell.

Jan will have to pay more than the 30c per share she paid on Monday because none of the family interests will want to have a complete fire sale but lets just say that they would probably be open to offers.

The sites that PPG currently operate their brands in would be perfect for her new outdoor goods venture or another of her many retail interests in New Zealand.

Whatever she does do with her PPG holding you can be sure it will fit into her larger retailing empire.

Disc - I own PPG shares in the Share Investor Portfolio

Postie Plus Group @ Share Investor

Long Term View: Postie Plus Group Ltd
I'm Buying: Redux
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Jan Cameron @ Share Investor

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c Share Investor 2010

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