re: Ann: OAK: RFG: Withdrawal of Takeover Off...
RFG was trading well because of the strength of the operations and management. The economic outlook starts to soften, but shareholders were willing to look past the short term so long as the company is on a shore footing. Then the directors decide to pull this stunt (and a stunt is all I can call it since there was no real justification for it in the first place) they want to undertake an acquisition that makes no sense (even if it is cheap, it still has to be a strategic fit) and use the company for their own benefit.
The key line was released in the announcement:
"Whilst ostensibly Oaks and RFG's business formats and revenue drivers would appear disparate...."
It was so obvious that this deal did not work, such that they needed to explain why they had proposed it in the first place, and yet they still went ahead and did it anyway. Being cheap is not a reason to purchase a business (there are a lot of listed RIT's that is perfect evidence of this - maybe TA should consider acquiring a couple of those since they are cheap). Little wonder the market is concerned about the future operations of the company, in the hands of these same directors, and as a result we are not seeing a recovery in share price.
Way to go JC and CA, but especially TA. Prior to this debacle RFG stood out as one of the few discretionary retail companies that was performing well, and the analysts supported it.
You guys would have lost my vote for re-election if not for the fact that I am now selling my shares because of this debacle.
RFG Price at posting:
$2.44 Sentiment: Sell Disclosure: Held
