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.

M & S having a hard time but the kids cloths and toys that Woolies are famous for must be pretty bomb proof in terms of suffering any downturn. Ladybird & Chad Toys and the Music business are worth more than the current valuation imo.

Clocktower, you may be right...let's hope so.
However, Blackdown has put his finger on the nub of WLW problem - and why they "sold" those London shops...at a decent profit.. So, Blackdown has missed " position potential" - that's the value the location of the shop enjoys. The landlord doesn't feature in this, since they only have the (old store), data.

I'm just hoping WLW can (trial-) adapt one or two shops into the LIDL model - grief, they've had enough Notice....but Execs are happy to draw big salaries...so, why should they worry?
This is the real issue, with many UK-businesses . . . . the power is in the wrong place - and only when a "hot-shot" takes over will the businness return to the BUZZ when FW first opened.

Some odd Exec-share deal - I cannot work out what the RNS is saying - It's a Sell, is that it? Serves BJ right, maybe a bit cruel... Grr.

Bigger trades taking place - A bid on its way maybe?

No just undervalued.

Sell down another 5% today UK officialy in recession.

did anyone in uk really need media etc to tell us that.......we can all feel it financially!

Anybody know who Ardeshir Naghshineh is RNS states he has increased his shareholding to 80million (5.48%)?

looking v interesting now.

Which is more than you can say for their retail outlets.

Sell.

from the other side---if wlw closed down all their retail outlets they would still gross more in a year from their entertainment arm than the mkt cap of the co.---someone must be running a slide over this co. some very large chunks being picked up for a reason--I Hope!

Have the shorters now finnished?

Like moneyplus , a bid must be near at these levels.

Why?

Why?

Because 2Entertain is worth 16p alone it's the best buy one get one free WLW have ever done.

Looks like 5p this week ..incredible.

Is this now cheap the fact that they are hanging on to 2Entertain does that matter?

Its 40 percent stake in 2 entertain, its successful DVD publishing joint venture with BBC Worldwide.
Some analysts had estimated the stake to be worth up to 200 million pounds -- more than double the group's current market capitalisation.

It's a sillty situation for WLW to be in, but every RNS seems to tell the Market things can get worse...and they do!

Until some Umph is put into each store with help for customers (and raising prices by offering products with that "extra") - I cannot see things improving. Store sales are a good thing, as the new owner will pay dearly. It's a shame WLW cannot do the same on the floor before it came to be sold.

This is a share-buying op, but even with a new Exec it will be some time before he can turn this hulk from drifting close to the rocks. Recent moves are shifting stock, but I can't see this is sustainable - we need profits and I've consistently told them how - but they prefer the present status ... so no changes yet awhile!

Fortunately customers are quite happy with the store, only recently a long queue only lost two - the Till wasn't working and only the spotty child knew where the reset-key was. Their plants remain a disgrace...being priced at 4 (nearly), yet showing zero signs of life, although the wrapping was still quite fresh. The Manager told me they return the dead plants to the supplier - shouldn't such incompetance be illegal? - putting a strain on the producer who nourished this plant for a year only to have indifferent staff snuff it out? Think of the plant-miles....makes my blood boil. Grr! and double Grr!

Not looking good a lot of money has been lost on the other side and they are well p**ted off.



REUTERS UPDATE 1-Woolworths hits new low after profit warning [HYBWMHM]

(Adds company, analyst comments, shares, detail, background)
LONDON, July 29 (Reuters) - British sweets-to-DVDs retailer Woolworths issued a profit warning, blaming a marked downturn in trading conditions, and scrapped plans to sell out of DVD publisher 2 entertain, sending its shares to a new low.

The 100-year-old group, which last month agreed to part company with Chief Executive Trevor Bish-Jones, said on Tuesday it planned to rebuild its retail business around its more profitable small and medium sized stores.

But analysts said it faced an uphill struggle.

"Woolworths trading statement is dreadful," said Panmure's Philip Dorgan. "Any talent thinking about taking the (chief executive) job will doubtless be unimpressed by the board's strategic review."

Panmure's Dorgan pencilled in a first-half loss of 75 million pounds and a break-even result for the full year, adding the group was unlikely to pay a dividend.

Chairman Richard North said plans to focus on small and medium-sized stores did not mean the group was looking to shrink or to sell off larger premises.

Woolworths recently sold four stores to supermarket group Waitrose and when asked whether more such deals could happen, North said: "Not in the next few months. But who knows?"

I'm well p====d off too!! stuck with them now long term I suppose.

Seems to me all WLW Execs could be culled, say one a year - AND no-one would notice!....but their issues are at store-level, albeit with some stock issues. I can't see staff being pleased they;re employed by the Bottom Retailler....doesn't look good on the CV...Eh?
Whatever the reasons, the Execs are too well paid and probably don't care sufficiently to do anything. After-all it has been their decisions that got us here.... remember 40p.?...LOL.