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Orora might be possible & they could approach Ruffy. I am not...

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JCoure

36,303 Posts.

935

06/02/15

20:48

Post #: 14712987
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Originally posted by bottomfeeder1 ↑

Ruffy & PGH are very good operators and the fact that Ruffy bought in at $0.73 and now the business is selling at $0.53 will only upset him (to put it mildly!)

PGH will not buy something that is not tracking well and at the moment CKL is not tracking well. PGH will not overpay for an asset and at the moment CKL is a little on the rich side if you take debt into account.

Yes there are synergies, however Ruffy doesn't tend to buy a business that needs a turnaround and then try to extract synergies from it. PGH has made it clear they look at returning of 20% after 3 years. So the numbers are as follows;

Current Market Cap $44m
Debt $39m
Takeover premium say 23% $10m

Total investment $93m
Return after 3 Years $18.6m

I am not saying its impossible, however there is a lot of work to do to get CKL ship in order and it may take longer than 3 years.

The fact that Ruffy has bought his stake in CKL and not PGH only suggests to me that Ruffy is trying to Block Orora from growth via acquisition.

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Orora might be possible & they could approach Ruffy. I am not convinced CKL is a s bad as u make out, bottomfeeder, the result was not that bad.

CKL Price at posting: 53.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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