CIM - CIMIC Group

[Garpal Gumnut]

Re: LEI - Leighton Holdings

Quite a distressing long term monthly chart on LEI.

Particularly over the last 6 years.

A descending triangle, looking to break down as volume is of late to the downside.

Looking further back I would suggest an entry at $7.50 to $8.00 mark.

I lost a small amount on a short term long trade earlier this year, but it was chickenfeed to what has happened this week, and I fear for long holders in the next month or two.

gg

 

[Country Lad]

Re: LEI - Leighton Holdings

Quite a distressing long term monthly chart on LEI.

Particularly over the last 6 years.

Yes, but over that period there were 3 occasions of significant rises from the low to high of 158%, 57% and 65% so opportunities to make significant profits were there. Just before the announcements a couple of days ago, the chart again looked positive with good continuation patterns.

Shows the benefit of waiting for a breakout from the positive patterns because an event out of left field can always be just around the corner.

Cheers
Country Lad

 

[edman79]

Re: LEI - Leighton Holdings

So Leightons gets an ASX price query on Friday due to higher volumes being traded and the price rising by ~10% and they respond with the standard "We don't know why and have no explanation for it". Next trading day there is a takeover bid. So if Leightons didn't know then someone did. Is this another ASIC sit on their hands moment, which I call a weekday?

 

[skc]

Re: LEI - Leighton Holdings

So Leightons gets an ASX price query on Friday due to higher volumes being traded and the price rising by ~10% and they respond with the standard "We don't know why and have no explanation for it". Next trading day there is a takeover bid. So if Leightons didn't know then someone did. Is this another ASIC sit on their hands moment, which I call a weekday?

Yes... definitely dodgy as. Often share price will at least take a rest upon the speeding ticket response, but it kept powering upwards on Friday. Thank God I didn't short them.

It is now trading above the proportional offer price... so the market is looking for a full takeover at some stage? The offer price is only $22.75 and only for 37.5% of one's holding. I would have thought the share price will trade lower after the takeover lapses...

 

[McCoy Pauley]

Re: LEI - Leighton Holdings

ASIC is a toothless tiger. Does a lot of roaring but won't back up that roaring with action, especially against a company the size of Leighton's.

Clearly someone in the market was well-informed before the announcement was released. Logically, therefore, it seems that someone is buying in the anticipation that a proper takeover offer will be submitted before too long.

 

[McLovin]

Re: LEI - Leighton Holdings

How can you make an offer that will take you from 59% to 74% without making an offer for all remaining shares?

 

[SilverRanger]

Re: LEI - Leighton Holdings

Yes... definitely dodgy as. Often share price will at least take a rest upon the speeding ticket response, but it kept powering upwards on Friday. Thank God I didn't short them.

What kept you away from going short? I went in as soon as I saw LEI's response on the speeding ticket..

 

[skc]

Re: LEI - Leighton Holdings

How can you make an offer that will take you from 59% to 74% without making an offer for all remaining shares?

Dunno. The same mechanism that lets them hold 59% and not do a takeover? I had to read the announcement a few times to make sure I understand the "proportional takeover" business.

I guess there are a few other companies with only a pretty small free float as they are majority-owned by different entities.

What kept you away from going short? I went in as soon as I saw LEI's response on the speeding ticket..

Just the price action after the response. It had every opportunity to fall but it didn't so I accepted the fact the buyer was better informed (and it's hard to argue that he/she isn't).

Plus I've been trading like $h.it so I just didn't want to chance something that didn't look right.

 

[Ves]

Re: LEI - Leighton Holdings

Dunno. The same mechanism that lets them hold 59% and not do a takeover? I had to read the announcement a few times to make sure I understand the "proportional takeover" business.

I guess there are a few other companies with only a pretty small free float as they are majority-owned by different entities.



Just the price action after the response. It had every opportunity to fall but it didn't so I accepted the fact the buyer was better informed (and it's hard to argue that he/she isn't).

Plus I've been trading like $h.it so I just didn't want to chance something that didn't look right.

They didn't make a takeover bid.... so my understanding is that s606 applies instead.

Section 606 prohibits the acquisition of a relevant interest in voting shares if, because of that transaction, a person's voting power in the company:

increases from under 20% to over 20% or
increases from a starting point that is above 20% and below 90%.

http://www.takeovers.gov.au/content...mmary_of_takeover_provisions_in_australia.htm

They've gone from 59% to 74% if shareholders accept. From what I understand if they go to 75% ownership there is a trigger / issue in relation to the debt covenants.

 

[SilverRanger]

Re: LEI - Leighton Holdings

Dunno. The same mechanism that lets them hold 59% and not do a takeover? I had to read the announcement a few times to make sure I understand the "proportional takeover" business.

Whatever they did surely is working in their favour, spending AUD$1.16 billion to build up their share holding from 59% to 74%, while their original 59% share enjoyed a paper profit of almost AUD$1 billion just in the last 2 days.

Just the price action after the response. It had every opportunity to fall but it didn't so I accepted the fact the buyer was better informed (and it's hard to argue that he/she isn't).

Plus I've been trading like $h.it so I just didn't want to chance something that didn't look right.

Glad you dodged this, now thanks to this I have a clear March target: try to break even..

 

[skc]

Re: LEI - Leighton Holdings

Whatever they did surely is working in their favour, spending AUD$1.16 billion to build up their share holding from 59% to 74%, while their original 59% share enjoyed a paper profit of almost AUD$1 billion just in the last 2 days.

They are not traders so I doubt they care about paper profits.

Glad you dodged this, now thanks to this I have a clear March target: try to break even..

I have the same target for March

 

[Ves]

Re: LEI - Leighton Holdings

They didn't make a takeover bid.... so my understanding is that s606 applies instead.



http://www.takeovers.gov.au/content...mmary_of_takeover_provisions_in_australia.htm

They've gone from 59% to 74% if shareholders accept. From what I understand if they go to 75% ownership there is a trigger / issue in relation to the debt covenants.

Sorry I meant it goes from s606 to s611 (one of the exceptions), which means that it has to be accepted by shareholders without being a full takeover bid, more like an increase in control.

I walked off mid post because the phone rang and obviously forgot to write that bit.

They had previously been using the "3% creep" role to increase their control.

 

[goccipgp]

Re: LEI - Leighton Holdings

If we can pass 23.15, then 27.039 is easy. Technical buying signal at ************ website.

 

[piggybank]

Re: LEI - Leighton Holdings

Construction group Leighton Holdings Limited (ASX: LEI) has had to defend itself to the ASX, after its share rose 14.7% in the past few days. Shares in Leighton closed at their highest level in twelve months, at $20.72, after rising 7.7% today. The company says it is not aware of any reason for the price rise, nor the unusually high volumes. Around 4.7 million shares changed hands, around 3 times more than usual daily volumes over the past year. But it appears there may be a simple explanation for the price rise.

Germanys Hochtief, Leightons largest shareholder, with more than 57% of the companys shares, lifted its holding to 58.77%, after purchasing an additional 3.4 million shares. Under Australian corporate law, Hochtief, can buy up to 3% of the company every six months, without being forced to make a takeover offer. Hochtief has in the past said that it would continue to lift its holding in Leighton. So this might be a slow and stealthy takeover.

On the other hand, Hochtief could also...

If you want to read the remainder of the report then please double click on the link below
http://finance.ninemsn.com.au/newsb...s-leighton-holdings-limited-a-takeover-target

​

 

[Garpal Gumnut]

Re: LEI - Leighton Holdings

Where to from here. ?

My charts indicated a buy about Christmas, and I am sitting on some capital gain.

gg

 

[VSntchr]

Re: LEI - Leighton Holdings

That's weird that they adjusted the offer so quickly after announcing it?!

Share price didn't react to it, but would have been frustrating for the shorts to read!

 

[McLovin]

Re: LEI - Leighton Holdings

Sorry I meant it goes from s606 to s611 (one of the exceptions), which means that it has to be accepted by shareholders without being a full takeover bid, more like an increase in control.

I walked off mid post because the phone rang and obviously forgot to write that bit.

They had previously been using the "3% creep" role to increase their control.

Ahh...so they can just put the offer to shareholders and if they accept then they get around the rules.

 

[skc]

Re: LEI - Leighton Holdings

Ahh...so they can just put the offer to shareholders and if they accept then they get around the rules.

What an awesome rule. You have to do XYZ, unless you tell people you are not.

What kept you away from going short? I went in as soon as I saw LEI's response on the speeding ticket..

Did you hold onto your shorts or did they get recalled? I was puzzled by why it would trade above the indicative offer price. You can only sell 3 of 8 into the bid so the remaining 5 shares are not worth as much as the offer price. Now it's pretty clear that LEI will become a majority owned subsidiary that, while remaining listed, will have much lower liquidity and perhaps get kicked out of all the indices. A mop up offer may or may not eventuate... with highly uncertain timing and price.

 

[McLovin]

Re: LEI - Leighton Holdings

What an awesome rule. You have to do XYZ, unless you tell people you are not.

I think I understand the reasoning behind it, but it's a bit stupid, imo. Also, I assume that the acquirer who already owns more than 50% of the stock cannot vote on the resolution?

 

[SilverRanger]

Re: LEI - Leighton Holdings

What an awesome rule. You have to do XYZ, unless you tell people you are not.
Did you hold onto your shorts or did they get recalled? I was puzzled by why it would trade above the indicative offer price. You can only sell 3 of 8 into the bid so the remaining 5 shares are not worth as much as the offer price. Now it's pretty clear that LEI will become a majority owned subsidiary that, while remaining listed, will have much lower liquidity and perhaps get kicked out of all the indices. A mop up offer may or may not eventuate... with highly uncertain timing and price.

No I didn't hold on as it went way above my worst case scenario (the offer price), in hindsight I should have known better that this means a short opportunity. I don't think these guys are going to take over LEI any time soon, cuz it makes more sense to keep borrow under LEI (better credit rating) and easier to raise equity if they have to.