Agree, management appear to be working more for WPP than the...

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Jd2

86 Posts.

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15/12/15

16:37

Post #: 16619668
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Originally posted by rebel888 ↑

The market has spoken......it is a poor deal for SGN shareholders.

SGN loses control, merging with a WPP asset that has not been subject to due diligence, and valued at a PE that would seem generous to WPP.

SGN has to pick up additional debt in this transaction and may have to raise equity capital, at a discount to currentmarket price.

SGN has taken all the pain in the last year, with substantial restructuring costs incurred. We should be entitled to expect profits to increase this year.

Why is SGN entering into a merger at this current time when the marketing and advertising spend is picking up from the low base and we have an election year coming up with large expenditure expected from the major parties.

The market must be factoring this poor merger decision in, and the share price is being hammered.

Is SGN management working for SGN shareholders or WPP????

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Agree, management appear to be working more for WPP than the other shareholders. Hopefully other shareholders agree and vote no to the proposed merger. If WPP want the assets of SGN they need to obtain funding lines from their bankers/advisors to provide an all cash offer that reflects the value of the underlying SGN business and pays a control premium for shareholders to provide an adequate return for shareholders to sell.

SGN Price at posting: 71.0¢ Sentiment: None Disclosure: Held
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0 Great analysis

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