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.

Opposite side of flyover and Edgeware Road from Paddington. Nearer to Marylebone Station and on same side.

Well it's just to say that operations should and must be conducted not from expensive residential areas....you would think that these so called executives would understand that.....it beggars belief !.

i think you are being rather unfair ...... i don't know the terms under which WLW have that site, but it is far from impossible that it made no economic sense at all to move ..... and move to where incidentally and how long ago? ..... and what do you do about the staff who do not want to move? ...... i am unsure about legislation regarding enforced relocation, but certainly be aware how incredibly expensive it is to train new staff, and that is once you haver found suitable replacements

The bottom line is of course the economics of the situation and I for one do not have all the the info about staff, freeholds, lease terms etc....but if you want to succeed : the last place for headquarters is where they are now and they should have moved 20, 30 years ago.....what are they doing there ?, prestige location ?, retrain staff....a company must be ready to change !, they did not and now they are finished. Scared of change : that is the problem with this country !.

move 20/30 years ago????? ...... why? ...... and in any case, as i wrote before, WLW may have very advantageous terms on their current location ...... and surely WLW's demise has more to do with having the wrong image and merchandise than whether they move h/o location, which after all, is just one site out of 800+

Sad to see but good for shoppers---prices slashed in the stores plus buy 3 items get the cheapest free. clearing as much stock as they can before closure imo.

It is not a residential area. It is all office blocks there. It is on the main dual carriageway leading to the flyover from Baker Street.

Wrong Haystack, they look like office blocks but some are residential flats, sad to see WLW go down the spout, they did not adapt to a changing world, habits and demands, (just like most of Britain today) !.

It is a large office building on the corner of harewood Avenue and Marylebone Road on the north side of Marelybone Road. The building is completely offices as are almost all the buildings nearby. The next building to the east for insatance used to be the headquarters of British rail and is now a Hotel. That building takes up the whole block. Next east is the head office of NCR and it takes up a whole block . The next block is all offices up to Gloucester Place, Then there is a row of shops with flats above up to Baker Street. Opposite Woolworth it is all offices going east and west as well.

Wrong again Haystack, whole parts are residential.....I'm not going to continue with this nonsense anymore.....have better things to blog about !.

it is somewhat irrelevant anyway ..... a single building where WLW have been tenants "forever" has a less than negligible effect on WLW's plight and nor was it causal

Dragon Theo says 'No' to Woolworths


Dragons Den entrepreneur Theo Paphitis is out on WoolworthsDragons' Den entrepreneur Theo Paphitis has pulled out of the running to buy parts of the collapsed retail chain Woolworths.

Mr Paphitis, who made his fortune by turning around companies, including stationery business Ryman and the Contessa and La Senza lingerie chains, said it had not been possible to reach a deal with administrators from Deloitte.

He had hoped to retain the Woolworths brand name by purchasing a large share of the existing retail business.

Deloitte has reported strong interest in the retail chain, which went into administration last week along with the parent company's DVD, CD and computer games distribution business EUK.

The statement from Mr Paphitis raised the prospect that the retail business, which operates from 813 sites, will be broken up.

He said: "Unfortunately, the constituent parts of Woolworths are more valuable than the whole. The administrators have a difficult job to do and I appreciate that they need to get the highest cash value for the business.

"The prime location and size of many of the Woolworths stores makes them an attractive proposition for many larger format retailers such as supermarket chains, so they are very precious sites.

"I am very disappointed that my own proposals have come to nothing but at least I know I've certainly tried. I hope that an alternative proposal succeeds in securing the future for the many Woolworths employees involved."

Woolworths stores will stay open during the festive season but doubts remain over the future of thousands of jobs - the group employs 30,000 staff, with around 25,000 working in retail.

Mr Paphitis said: "My vision was that we could retain the Woolworths brand name through purchasing a large share of the existing retail business. This would have involved providing a secure future for as many employees as possible."

GameStop bids for half of Woolworths' shops

Job fears as Woolies rescue fails

The sales in Woolworths are not spectacular. Advertised 50% off but most items are only 10-20% off only.

Thanks hyleo was planning to go today won't bother now.

The shelves are being stripped bare with people buying anything they can lay their hands on it seems! Paignton store had to close the doors yesterday as it had too many shoppers jammed in--it only let people in as some came out. Why couldn't the previous managers achieve sales like this ???

Retailer Iceland is interested in buying stores from the administrator of collapsed retail chain Woolworths
Not having to paint the fronts red was a big consideration.

Haystackdo you chalk a route when you leave home.

Woolworth is just the first high street chain to go under - M&S will be one of the next in 2009. Hopefully Green will buy them and turn them into a proper business.

Haystacknow you know I am not a betting manbut even I will take you up on that bit of nonsense.Green is a spiv.
Despite being a prominent figure in UK retail and business Philip Green has chosen to avoid paying tax in the UK. It is estimated that he and his family saved 300m in 20042005 by living partly in Monaco where residents do not have to pay income tax.Whilst some may see this as the prerogative of a successful and wealthy businessman others have questioned the morals behind this decision saying it is motivated by greed making money from the people of Britain whilst refusing to contributebut go on haystack have him own M&SI hear Woolworths have still got some compasses at half price.could be a good investment for you?