Ann: Trading update, page-13

@Morrison6

You assessment of the situation is on the mark, I think.

A first bid in a non-friendly takeover situation is never the final one the bidder is prepared to make.

So I suspect Allensford is in a position to increase its offer price.

Trouble is, nothing is requiring them to do so: there is no pricing tension from any other interested party (well, not yet), business momentum is poor, and TRS has no large and sufficiently engaged shareholders that can pressure the TRS board to be more proactive (i.e,. actively solicit competing interest in the company or engage with Allensford).

So I'm afraid it will continue to be a bit of a stalemate, with the brinkmanship likely to continue until after the announcement of TRS's interim result.

After that, and depending on the quality of the result (my intuition tells me that it won't be too flash), my guess is that Allensford will nudge up its bid price - to $2.85 or $2.90.

However, I don't think it will get too many acceptances at that sort of price (unless the composition of the interim result is really horrible), and certainly not enough to get them anywhere close to controlling stake, or even the kind of state where that might be able to secure a board seat.

So, in the absence of an interloper appearing on the scene [*], I don't see this stock doing anything much for the next month, until after the interim financial statements are published.

So, I think that your decision to sell makes sense, if you feel you can deploy the proceeds elsewhere.


[*] Despite none having materialised to date, that doesn't mean one won't; I just think that the corporate advisor of any would-be acquirer would know that this situation is going to take time to play out to its final outcome, so there is no rush to show any hand.


PS. For what it's worth, if you forced me to sketch the likely and/or possible developments after the interim result is published, then I'd respond with:

Chance of Allensford increasing bid price to $2.90 = 60%
Chance of competing bid appearing @3.00/share = 20%
Chance of a full-blown bidding war breaking out (resulting in a $4.00 share price) = 10%
Chance of no competing bid and Allensford walking away (share price falls to $2.20) = 10%

If those different price outcomes are weighted by their respective probabilities of occurring, one gets a result of $2.95-$3.00/share.

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