So the competitor offered half the price that WHL is offering - nil premium and all that jazz. Do I detect a bunch of hubris driven Saffers on the move again? ( I thought department stores were like buggy whips?)
If there is such a difference in price offered then you have to assume that one of the parties is acting like an idiot - and that Saffers can do better than anyone else on the planet when it comes to international acquisitions! So are we going to see a long period of capital demands on shareholders and management time taken up in this. Checked the Sydney Morning Herald - no one applauding there. In the absence of information to the contrary I would assume WHL will drift downwards. Just too much for ..? Isn't it amazing how management can lay waste to all your best laid plans overnight!
Finally catching up on some projects I've had on the to do list one of which was looking at the Woolworths acquisition of David Jones. Have to say, by my own calculations, they're left themselves very little in terms of safety margin on this one. The proposed price is at the top-end of my modelling range ($3.05 is where I put a fair price). CONS: Over the past 8 years DJS has averaged a very modest 6% earnings growth on non-existent turnover growth. Net debt is slightly on the high side for my taste Bit heavier on the working capital requirements than Woolworths (might be an opportunity for some synergies to free up cash) PROS: Greater offshore exposure and international footprint so becoming even more of a rand hedge stock. Seems highly cash generative throwing off high dividends in relation to earnings on a decent yield So I'm going to be watching the developments of this one carefully before making a voting decision