takeover bid strategy - a very interesting read...

Should you chase the takeover targets?
In 2004 it seemed that every second high-profile firm around the world was either taking a firm over or being taken over itself. In the US, Cingular bought AT&T Wireless, for example, and, in the UK, Banco Santander bought Abbey National, and the on-off saga of Marks & Spencer (M&S) occupied column inches for weeks on end. But according to the investment bankers, we havent seen anything yet. Theres no reason to doubt their prediction. As John Plender points out in the FT, they know at first hand what is in the merger and acquisition (M&A) pipeline. And if they are right, its excellent news for investors: share prices tend to soar when bids are announced.

Take the case of Aggregate Industries. Three months ago, Sandy Cross of Williams de Broe tipped the building materials firm in MoneyWeek at 95p, saying that it looked a manageable size for a predator. He was right. This week, Switzerlands Holcim said it intends to bid $1.78bn or 138p a share for Aggregate Industries. Today, the shares are trading at around 145p - anyone who bought in November is sitting on a 53% gain.

So if this really is the start of the year of the deal, wheres the best place for investors to place their bets? There is scope for consolidation in all sorts of sectors, from telecoms equipment to travel, all over Europe, but in the UK it is the retail sector that is getting all the attention. Analysts have long been warning that British retailers were going to have a nasty end to 2004 and a worse beginning to 2005, and Christmas seems to have been every bit as poor as the pessimists feared, says Chris Brown-Humes, also in the FT. Higher interest rates, a weak housing market, record levels of personal debt, higher utility bills and increased public transport costs are all squeezing the ability and desire of households to keep spending. The result? A lot of our retailers are suffering and that could make them easy pickings for predators. Indeed, one of the only things supporting retailers share prices right now is the prospect of takeover activity.
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Venture capitalists are still on the prowl, as is the Icelandic retailer Baugur, and Tesco and Asda might make a move on a rival. All of which leaves investors simply having to guess who the targets will be.

Betting on who they might be has become the latest City investment craze, says Simon Nixon on www.Breakingviews.com. But it isnt hard. M&S and JJB Sports saw their share prices rise even as they announced rubbish numbers as investors calculated this increased the likelihood of a takeover. Perhaps Philip Green will comes back and have another go at M&S.

Other possible targets include J Sainsbury, N Brown, MFI, Matalan and French Connection. But is betting on these firms wise? Debt is now cheap and plentiful, so potential bidders are awash with cash, but if the spending downturn gathers pace, that will change and takeovers will suddenly be harder to finance. And not all the dogs of the retail sector will be rescued by a bid. Some will just go bust instead. As Simon Watkins points out in The Mail on Sunday, some already have. Since Christmas, Scottish carpet maker Stoddard International has gone into administration because of tough trading at its key customer Allied Carpets, and fashion chain Pilot went into receivership as sales fell. These were both private companies, but the lesson is clear. If you are chasing takeover targets, make sure you go for firms that will survive even if they are forced to go it alone.

Woolworths is every inch a major takeover and worth following, a great opportunity if it materialises, the time is ripe once again -58p was recent target price.
remember Doing your research reaps rewards.

Ahead of Wednesday's interim results statement from Woolworths, Evolution's retail guru Nick Bubb said that he thought recovery hopes seemed to be fading. The broker said he thought that first-half losses would be much higher. He forecasted pre-tax losses of 41 million pounds on UK GAAP, compared with a 33-million-pound loss last year, on the back of 4.5% fall in like-for-like sales in the main chain and said that Woolworths needed a big second-half recovery to get anywhere near last year's disappointing 73-million-pounds full-year profits. Bubb said that the hope was that toy sales would recover this autumn and that new releases would boost music/DVD sales, but said that there was always something going wrong at Woolies. He now also thinks that like-for-like sales may be down by 2.5%, rather than its current assumption of flat like-for-like sales growth, given worsening high street trading. The broker therefore cut his full-year pre-tax profits forecast from 60 million pounds to 50 million pounds. Bubb maintained his "reduce" stance, but cut his target to 30p from 32.5p. The shares fell 0.25p to 35p.

Well that above plus weekend coverage has made my mind up.

Betting = The wager of money or moneys worth on the event of a doubtful issue.

I stay out till I know where it goes next.

Going the right way for me SW,but no hurry at the moment..

33.5p mid as I write, from I am seeing elsewhere, players expect sub 30p after tomorrow, the forscast of 4% drop is going on 5% apparently

You guys should forget about Woolies and pile into Avis
Its looking good on all fronts for 70p within the next few weeks or earlier

Is that right Dave?

Good luck holders for tomorrow.

Woolworths Wilts

"Woolworths Group PLC, the toys-to-sweets retailer that was jilted by Apax Partners in April, has reported an expected widening of underlying first half losses but an improvement in recent underlying sales at its eponymous main chain."

I think the figures are actually not so bad.

Wait and see what happens with the sp.

Morning SW

Hey ello.........

SW, not playing out quite as you thought. Holding a bit of a loss myself but think I will hold..............plenty of support it appears.......?

SW, not playing out quite as you thought. Holding a bit of a loss myself but think I will hold..............plenty of support it appears.......?

SW, not playing out quite as you thought. Holding a bit of a loss myself but think I will hold..............plenty of support it appears.......?

I wont reply 3 times, but no it's not.

Having a detailed look to see if I want to return................

regards

to yogi.

Getting near Dave?

Personally I have decided not to bother at any price.

Too much negativity about the High Street and Christmas about.

The Times published an article today saying some chains will go bankrupt and in the next para started talking about Comet, Curry and the like.

Not saying this has anything to do with woolies............

............but it don't help.

Cheap enough for you yet Dave?

Is this now getting to look like a bit of a mint imperial on the pick & mix counter,,there always on offer,,but nobody wants them ,

Care for a bag of could be truffles,,they wont melt over the winter months,who said chocolate,,ummh december.

xmas is coming early what a bargain.buy.

Fairly active today. 62m buy reported earlier. Also a 10m and a 1m sell.

Bish bosh loads of volume,eye,eye whats going on here MR T !