WHS - Warehouse Group

[Ferg]

A tad underwhelming given many shareholders will be under water even at $1.70.  Also, to put the feelers out there without making a formal offer seems like a bob each way for the purchaser....this is a bit wishy washy:

non-binding, indicative proposal with a view to entering into discussions about a potential acquisition

[Basil]

NZX needs to investigate Friday's 10% share price jump.  Clear example of insider trading and more leaks than a sieve.  Smellier than 4 day old fish left out of the fridge.  Agree Ferg.  pretty underwhelming and very uncertain.

[notmaurice]

What chance that the new supermarket has a privately owned,bakery,butchery,friuteer operating from within their umbrella.

[Teitei]

A tad underwhelming given many shareholders will be under water even at $1.70.  Also, to put the feelers out there without making a formal offer seems like a bob each way for the purchaser....this is a bit wishy washy:

Irrelevant when and at what price shareholders bought their shares?  This is in a way a free get out of jail card if the takeover goes ahead - WHS as of what & where it is today has not much of a future imo.

Tindall has always held a very positive view of the Warehouse despite evidence to the contrary in recent years.

This is the last throw of the dice and how confident are shareholders that Adamantem will follow through with a solid proposal after due diligence?

[LoungeLizard]

Can't see the offer getting shareholder approval and I think the independent valuation will be significantly more. I understand the impulse to jump ship but this is the first shot across the bow and if Tindal is actually serious he will have lift his offer by quite a bit.

[Basil]

Can't see the offer getting shareholder approval and I think the independent valuation will be significantly more. I understand the impulse to jump ship but this is the first shot across the bow and if Tindal is actually serious he will have lift his offer by quite a bit.

I agree.  This seems really "opportunistic" to me.  Right at the bottom of the economic cycle and just after they've cleared the decks of the former CEO who was such a failure, it couldn't possibly get any worse after clearing the decks of his ridiculous fantasies of the market and torpedo 7 and the hundreds of million of dollars wasted there.
Now the organization is more straightforward, get rid of half the head office staff that are no longer needed, then halve it again ridding themselves of all the mindless ESG fanatics and the ship might actually start to get some momentum again.
Don't know how he could try and take this over for less than $2, (disgraceful and highway robbery), with a straight face and doubt private equity would want to go that far so this deal could quite possibly end up in the rubbish tin.

[Basil]

https://www.nzherald.co.nz/business/stock-takes-norman-family-keep-cards-close-to-chest-over-warehouse-deal-plus-richard-prebbles-payout/HLQFD5L3JVGKFJYDUYUVJW3SA4/  Paywalled

Any deal would require the Norman's approval which might not be easily forthcoming.

[Greekwatchdog]

Takeover canned. Nick still still has a chance to get that share price back to $4 to get money back then.

The Warehouse Group has announced that it is not progressing discussions with Adamantem Capital Management Pty Ltd in regard to their Scheme of Arrangement proposal to acquire all the Company's shares at a price range of $1.50-1.70 per share.

The Warehouse Group Chair Dame Joan Withers says, "The current Scheme of Arrangement doesn't have the critical shareholder backing it needs to proceed. With that in mind, the Board has decided to defer further talks until such time as the proposal receives wider shareholder support."

A key shareholder has informed the Board that they do not support the current terms, and therefore the requirement for 75% approval from shareholders in each interest class is not possible.

"We acknowledge the interest from Adamantem Capital and the backing from Sir Stephen Tindall, however, without broader shareholder support, it is not prudent for us to pursue this proposal further.

"We're committed to acting in the best interest of all our shareholders. While the board has not yet formed a view on value, we're open to continue discussions if a further proposal generates shareholder support sufficient to make its execution viable."

[Pierre]

The Norman's are clearly not interested in flogging groceries from the red sheds - not at $1.50 - $1.70 a share at least.

[Basil]

akeover canned. Nick still still has a chance to get that share price back to $4 to get money back then.

LOL, "great" chance of that happening really soon 
Norman's obviously told them to make me a proper offer or @#$k off.
Based on average market cap in the last 6 months and this failed bid and likely retracement to $1 or below, removal from the NZX50 based on free float low market cap is very much back on the cards, possibly next month.
TWR is hot favorite to be the beneficiary for inclusion if that happens and almost a certainly for NZX50 inclusion anyway when ARV gets delisted in their takeover.   In my opinion, index Inclusion events are most lucrative when they are supported by compelling fundamentals and TA.   I think I need to get some more TWR.

[BlackPeter]

https://www.nzherald.co.nz/business/stock-takes-norman-family-keep-cards-close-to-chest-over-warehouse-deal-plus-richard-prebbles-payout/HLQFD5L3JVGKFJYDUYUVJW3SA4/  Paywalled

Any deal would require the Norman's approval which might not be easily forthcoming.

Hard to understand how anybody can make such a takeover attempt without prior talking to at least all major shareholders with a blocking minority?

Bunch of amateurs ...

[Waltzing]

what ....happened...

does that mean OCA is the next hopefull for punters after this one did not go a go go...

[Basil]

https://www.nzherald.co.nz/business/why-kmarts-expansion-is-more-bad-news-for-the-warehouse/X2H3R45VX5AEPLXEPFK4QGQO64/?lid=mopw3rcp4cce
Paywalled.  Amazing numbers for K Mart and more competition for WHS.

[Basil]

https://www.nzx.com/announcements/438870

• Total Group sales $3.0 billion in FY24, down 6.2% compared to FY23
• The Warehouse sales were $1.8 billion, down 5.3%
• Warehouse Stationery sales were $231.9 million, down 6.7%
• Noel Leeming sales were $1.0 billion, down 5.3%
• Gross Profit Margin held flat at 33.6%
• Adjusted NPAT of $18.9 million, down from $57.4 million in FY23
• Net Loss After Tax of $54.2 million, down from NPAT of $29.8 million in FY23
• Net Debt of $50.7 million.

What a shocker.

Chair Dame Joan Withers described the last financial year as one of the most challenging in
the company's 42-year history.
"The economic climate in Aotearoa New Zealand has been difficult for most retailers, with
inflation, high interest rates, and a weak economy significantly reducing consumer demand.
However, our trading performance and operational execution have fallen short and
exacerbated these challenges."
"The poor financial performance we've reported this year is not acceptable. The Board and
Executive Leadership team are acutely aware of the disappointment shareholders will be
experiencing and the big job ahead of us to get the company back on track."

Joan as the chair is directly responsible for allowing the massive cluster f@#& of the market.com and Torpedo 7, among other things including an absurd focus on all things ESG that Nick inflicted upon the company.  She is well and truly past her "best before" date and should do the decent thing and retire.
Without change at a board level and knowing the Tndall group as the controlling shareholder is primarily now interested in leaving a legacy for Kiwi's, I remain of the view this is uninvestable.

The new advertising program WHS have initiated on T.V. is good but it's just a drop in the bucket in terms of what's required to get a decent return on capital employed.  Is that even possible now given competitive pressures?
Consider this. The WHS was formed about 41 years ago before we even had the internet and online shopping overseas.  We've got massive expansion by K Mart among others planned and frankly they are eating the WHS lunch. Back in the 1980's if WHS told you that you were getting a bargain, you believed them.  Now, you'd be better off checking online or shopping at K Mart.

[LoungeLizard]

Another terrible result! No money to pay dividend - wasted it all on high exec salaries and vanity projects.

There really isn't any excuse for the situation the Board finds themselves in - they enabled Nick and all his wasteful badly-thought-through expansionist ideas. As a result they completely lost focus and have become a $3b business that can barely make $20m in profit, have $50m of bank debt and can't pay shareholders a  dividend. Totally foreseeable and avoidable yet the only ones who couldn't see it or know what to do about it were the Board (and Nick). What a shambles!

disc. happy non-holder