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.
(Article continued below)
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.

Wonder what are "underpaid" FSA make of this one - a disclosable interest RNS leading to many market purchases (see above comments + I took a small punt on this very fact) only to be pulled a few days later

Misleading Price Sensitive information, or what ?

Strawbs - The Icelandic holdings are I believe mainly in the form of CFD's, so possibly not them - if it is than even more reason for the FSA to act, as for days now we have been aware of their inability to control stock movements.

as i understand it, Alan Sugar "bought" the shares, but they could not be delivered ..... almost certainly, this block was owned by one of the Icelandic entities whose assets have been frozen

And almost certainly AMS adds egg to his face.

His declaration of intent has gone mildly awry, so will he continue now the share price has moved up?

Probably, imo

He and his mate Phil seem to have something brewing across the retail sector but remember they are not charitable institutions.

AS appears to have "intended to purchase" (those shares which weren't delivered). All rather nasty as it had an effect on the sp.
RM has been declared Finance Director and the sp has fallen 5% today (!). So, I'm wondering if WLW Execs are overpaid...this dir can receive between 40% and 80% - of a very generous 330k pa. -and there's more! - he can recive bonuses from no-cost share-options ( Oh how his wallet must hurt!)...something well over half a million - and the job?
Well, he has a small team of persons that tot-up the recipts from stores, suppliers and so on...to declare a profit, which is mostly paid to the Directors.

Er, so if the Directors weren't there, would these jobs be left undone with the Company swanning about without a rudder?
Er, no the whole mess is because Directors aren't directing....and giving them lots of money means you attract people who are interested in money, rather than the kudos that is gained from a job well-done.

I just hope AS gets to fire a few of them without recourse to severences, bonus, pension top-ups.....and other greases that duffers demand.

-All IMHO....let's see if WLW fortunes Restore . . . I see the Winter Sale extends to Spring Crocus Bulbs . . . . and some stationary has risen 20%, maybe reflecting added buying prices, dunno.

Two new men at the helm, traditional preamble to recovery ... FD with modest targets of 12p & 20p {later would suit me} ... 800 cash inlets ... surely a hopefull senario for holders

You could be right if they stopped running it as a "club" for semi - retired directors.

surely all the old team have now been replaced

halifax - I have no probklem with "retired directors" - but I do have an issue with rewards for failure and lack-lustre performance.....this business is quite simple and obvious to anyone that visits thwe shops - there is no reason to buy there . . . nothing that other stores don't do just a s well, maybe better. The loss of insurance for supliers looks bad and super-rewards for new execs - no, I don't think it smacks of quality management.
Indeed "if" I was worth so much money, I don't think joining WLW would further my career - and just waht does this new bod add to the value of pushing figures about.

Great shame AS hasn't been able to kick a few bottoms.

Wish I could be paid 330,000pa for doing fa. The shame of it all is WLW has 800 retail outlets in prime locations but they still insist on selling crap.

there appears to be a completely new team, the traditional way for a turnaround, which is bound to take some time, I as holder expect to have to wait for results ... surely all genuine holders would also expect to?

Copied from the advfn site - posted by knowing at 11.36 am today.

IG INDEX will not take anymore long bets on WLW. Do they know something we dont ?, or presumably theyve taken enough long bets already?

Ardenshir Naghshineh, Woolworths biggest shareholder believes the embattled retailers shares are worth at least 24p - six times higher than their price as Retail Week went to press valuing the retailer at 342 million.
see:-
http://www.booktrade.info/index.php/showarticle/17979

How many shares can I buy for 1 new pence..?

quite a few ( well, soon enough, it seems), the reported Volumes and price-movement is still not quite correct on this site, it seems. Quote shows sp is up 2.5%, yet in "losers" it shows nearly 10%...ahem.
This stock is woefully undervalued, if recent Reports are to be believed - but why would an investor tell the Market it is under-valued like it should be 34p?

I'm ignoring all the Fat-Cats on board....when we reach foul-weather they can be lobbed over.

Do you know what? If you read between all the blah, there are two outcomes. Sell the shops and keep a profitable arm of the company, or which I think is the more likely, the deal will fall through and they will have to turn things round as previously planned.
Either way you have to ask the question is WLW under priced at the current market value?

Look forward to your thoughts

if WLW go into administration does the pension fund get divided up to pay off debts or is it exempt? only ask as my mum is a WLW pensioner and would hate for her pension to go down/stop. my understanding is that no, just that no new money would be put into the pot and so there is the possibility of pot running dry sometime in the future.
anyone able to allay my fears/
Alex

Pension should be safe robert.

How much debt are we talking about here ?, I can hardy think that Sir Alan Sugar is going to lose a couple of million pounds just like that !, he might step in himself !, if not he must be mighty worried at the moment !.

If they fall 50% they might be worth a gamble .. I would not worry about Sugar he can look after himself.

((mitzy - I wonder if we aren't being "shaken"))
required field: -I thought Sir Alan Sugar hadn't completed the share-purchase, due to some problem with the previous ownership (Iceland?).
+Anyone with half an ounce can see that Woolworths is a fabulous business - it needs very little change to move it from dire to delight.
In its eary days W was an innovator - yet now it barely manages to mirror what is sold elsewhere.
On BBC2(WorkingLunch), there is a current "hate W" campaign with only one decent suggestion:- that they conmcentrate On-Line and use the shops as collection points....sound enough one might think, but any HiStreet position is expensivve...as a pure collection point, why not use the local Railway Station?
(This pre-supposes shoppers have access to the rail - but increasingly this includes bus). Could shoppers be persuaded to "view" on-line - I really doubt it...the BigRed catalogue hasn't been very successful (or they aren't saying so!)...so I suspect it is not like seeing the goods. If they sold "Gadgets" (ie Only) then their customers would be "Techy" and quite like On-Line....but looking at their customers I don't think so.
They need to sack half the Board and get in some folk with Ideas, Fire and Passion.
As it is they are "sleepers" - just look at the sp - - - - Arrgh!

(If he was there, I'd do any job for nothing...just think of the experience as it changes....Wonderful!)