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Takeover Targets, Possible takeover targets
post Posted: Jul 27 2021, 12:50 PM
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Anton Tagliaferro from IML has a well reasoned view on likely Corporate Activity
Government and central bank responses to the COVID 19 pandemic have created a window of opportunity for many corporates and strategic buyers to execute on their long held M&A ambitions, or to realise significantly higher proceeds from divesting assets.

A well-executed acquisition can bring scale, integration benefits, and new capabilities which can strengthen a company's future earnings and improve its competitive position in its industry. Ultralow interest rates also make the economics of using debt to partially or fully fund an acquisition more potentially favourable.

With the return on risk free assets essentially zero, and the cost of borrowing longterm debt so low, the incentive for many corporates and private equity players to acquire high cash generating businesses using high amounts of low cost debt is very strong. The high levels of government, corporate and household indebtedness also means that it is unlikely the cost of debt will rise significantly any time in the near future, despite current concerns about inflation.........

We expect a number of companies .......... to make acquisitions which will be earnings accretive, which will allow the business to increase scale and further strengthen competitive advantages, expand market share, and ultimately enable the company to grow its business faster over time:

Amcor (ASX: AMC) is one of the largest global packaging suppliers, has a strong balance sheet, and is using its strong cashflows to undertake a US$350 million share buyback.
CSL (ASX: CSL) is the clear global leader in plasma/blood products, has a track record of making astute and sensible acquisitions over its history, and as a result, has been able to generate consistently higher returns than many of its competitors.
Orica (ASX: ORI) is the largest explosives player in the world with a unique network of plants. Orica is completing the integration of Exsa, the leading manufacturer and distributor of industrial explosives in Peru, establishing Orica as the number one player in Latin America. Further acquisitions, in conjunction with Orica's investment in research and development and technology to drive the development of new products, will enable Orica to generate stronger earnings growth and grow its market share further.
Sonic Healthcare (ASX: SHL) is a pathology company which has undergone significant global expansion over the past 20 years, and has also been expanding its radiology footprint in Australia. The strength of Sonic's cashflows, combined with the company's extremely low debt, means that the firm's balance sheet is in its healthiest state in 20 years. This puts Sonic in a much better position than many of its smaller or more leveraged competitors, and we expect Sonic's highly capable and experienced management team to make further earnings accretive acquisitions.

The following is a selection of companies we own in our Funds which are already or which we believe are likely to be attractive to corporate players as their share prices look undervalued given the position of each company in its respective industry.

Australian Pharmaceutical Industries (ASX: API)

Insurance Australia Group (ASX: IAG)

Incitec Pivot (ASX: IPL)

SkyCity Entertainment (ASX: SKC)

United Malt (ASX: UMG)

"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  triage  
post Posted: Aug 29 2019, 08:30 PM
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Almost $50 billion of oil and gas assets could potentially change hands in the Australian region over the next few years, according to consultancy Wood Mackenzie, which is foreshadowing a shake-up in LNG infrastructure ownership as well as takeovers of juniors offering exposure to high east coast gas prices.

It pointed to US major ConocoPhillips and Italian oil company Eni as potentially interested in selling gas assets in Australia or possibly leaving the country altogether.

Meanwhile, smaller east coast gas explorers and producers such as Cooper Energy, Senex Energy, Comet Ridge and Galilee Energy could be attractive takeover targets given the tight gas market, Wood Mackenzie senior analyst David Low said on Thursday.

The decline in Oil Search's share price in the last few months due to uncertainty over LNG expansions in Papua New Guinea could also make that company an attractive target for a larger company with serious LNG ambitions, he said.

"We think an M&A shake-up could be on the horizon," Mr Low said, noting that Wood Mackenzie had identified a potential $US32 billion ($47.6 million) of assets that could be sold...

always hard to predict.

"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
post Posted: Jun 16 2008, 01:34 PM
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In reply to: shovel on Monday 16/06/08 12:55pm

Clearly the main area for T/O merger activity just now is in the oil/gas sector.At the present time there are about seven T/O, merger, joint venture suggestion being worked out some friendly some hostile. This is very strange indeed as the message from the market at the present time appears to be get out of oil/gas stocks at any price. The people giving this advice are most likely the same ones that were saying 12 months ago BNB was an outstanding buy at $36.00. There is something way wrong here, on the one hand we have experts/brokers showing very little interest in the oil/gas sector whereas the people in the know, the larger oil/gas companies themselves seem to be saying the only way forward is to grap under valued oil/gas interests on the cheap before the market wakes up.IMO the outstanding T/O companies at the present time are smaller oil/gas companies with proven reserves,great cash flow and increasing profits(quite frankly is there any other sector with this sort of outlook at the present time?). So something has to give ,either the share prices of these companies go up or more companies are going to be taken out. Lets take PPP as one example. Their 10% interest in the Tua field went ahead on the basis of 27m barrels of oil at a price of $40.00, we now have proven reserves of nearly 50m barrels and an oil price over $130, they will soon have more cash than their m/c but the share price is less than when they were producing nothing. I may be dumb but I can make no sense out of it. In the meantime investors who think I might not be so dumb should have a look at NZO,PPP,SAE.OEL,CVN,VPE, and soon to join them HZN,CUE, just to name a few.

post Posted: Jun 16 2008, 12:55 PM
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In reply to: allnite on Sunday 21/10/07 10:33am

Dallas could come calling for Burleson. - BUR.

BURLESON Energy is one of the 40 ASX-listed stocks that have onshore oil and gas in the US as their main focus. But unlike most of them, Burleson has secured a cash flow.
It would only take one or two more successes in the group's Texas program for some J.R. Ewing type to have a look at taking it over...


post Posted: Jun 16 2008, 11:44 AM
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In reply to: allnite on Sunday 21/10/07 10:33am

allnite: PYC is clearly a takeover target candidate.
post Posted: Jun 16 2008, 11:41 AM
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Topic moved from "Macro Factors" into "Investment Discussion"



post Posted: Oct 21 2007, 10:33 AM
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Has anyone done any research or got any thoughts on possable takeover targets with Capitalisation of less than $10million and shares fairly evenly spread that would interest a corporate raider trying to get 51% control

post Posted: Jun 19 2007, 11:00 PM
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I didn`t realise that there were so many tactics to avoid a takeover.
Since lots of forumites ask the question...

~Why are my stocks going down when everything looks good?~

Tactic to avoid takeover

Crown Jewel Defense
Golden Parachute
Gray Knight
Jonestown Defense
Killer bees
Leveraged recapitalization
Lobster trap
Lock-up provision
Macaroni Defense
Nancy Reagan Defense
Non-voting stock
Pac-Man Defense
Pension parachute
People Pill
Poison pill
Poison Put
Safe Harbor
Scorched earth defense
Shark Repellent
Staggered board of directors
Standstill agreement
Suicide pill
Targeted repurchase
Treasury stock
Voting plans
White knight
White squire

King Baz
post Posted: Jun 15 2006, 10:42 PM
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In reply to: favshare on Thursday 15/06/06 09:49pm

well ME only owns a tad over 3M and Grigor has almost 9M, collectively that is less than 5% so their shareholding would not be enough, but obviously unless the shareholders endorse a TO it may be difficult to TO FAR even for 30c.

All fun and games for now, but once ROC releases reserve figures for Beibu-Gulf, even indicative figures and FAR has solid oil reserves in addition to everything else l think FAR will be a different company!




LIFE IS FRAGILE and as investors we have disproportionately significant moral obligations.

I encourage people to watch the DVD titled 'The Corporation' to fully understand the exploitative nature intrinsic to corporations. Then, immediately after to watch the 'Inconvenient Truth' to put it in context.
post Posted: Jun 15 2006, 09:49 PM
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In reply to: King Baz on Thursday 15/06/06 09:04pm

King Baz I dare you to ask ME about FAR being taken over. My impression is that it would be over his dead body. lmaosmiley.gif


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