Originally posted by Morrison6
Does not look likely there will be a competing bid. So will the current bidders increase their bid? Imo yes they will. Why? Because they will have expected to have to pay a bit more than their first bid and because so far they have not had much luck at this price.
However, I have sold my trs shares today. The reason I have done so is because there is a good chance there is a skeleton in the closet of the profit update. Retailers are generally reporting a very quiet christmas. Management could have released more data but did not- why not? There must be a reason. If the profit result was "clean" then management would be crowing about it and the sp would be $3+.
So while I do think there will likely be a higher bid there is a good chance we could see some sp falls when the market learns more about the profit result. I doubt allensford will go away entirely but I dont think this is a straightforward takeover situation because of managements determination to keep their jobs and still continue to pursue their "strategy". Gltah I am probably being overly cautious.
@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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