ELD - Elders Limited

[w534220]

w534220.

Understand that the market is pricing ELDPA where they are because of risk of never seeing $100 again.

ELDPA are one stock that I'd consider buying, hell, I nearly did buy (I got STO instead, ELDPA was probably my 3rd choice at the time, though).

However, you *ARE* downplaying the risk, compared to what the market thinks.

You say ELD don't need capital? What if the economy keeps going like it is? Will they need cash flow?

Realistically, there's no reason why ELD has to pay dividends before 2013. 3 years away. In fact, one may argue that, from this position, that looks most prudent. They have too much debt for their cash flow... why would they give some of their cash to s/holders!?

ELDPA may give the nice $110 or so in 18 months time. Who knows? However, understand how little risk you are implying, compared to the market.

Read the latest announcment.... the SP dropped 40% for a reason.

"Is that a specific condition of ELD's hybrid paper? "
Yes.... quite an unusual clause, but, a certainly 'sensible' one...

if you always assume the risk the market is implying is correct then you may as well invest in index tracking fund.

hybrid holders have contractual rights. hybrid holders are senior to commone equity. they cannot take a haircut unless the company goes into liquidation or the hybrid holders agree to it.

 

[w534220]

They may get par, or may have to accept a discount. Who knows.

By the way why do hybrid holders get 50% of the takeover premium? Is that a specific condition of ELD's hybrid paper?

yes. everyone should study http://investor.elders.com.au/assets/documents/hybrid_PDF_2.pdf

specifically regarding a takeover on page 39.

7.2 Adjustments for takeover or scheme of arrangement
If a Hybrid is Converted pursuant to:
(a) an Issuer Realisation Notice given in respect of an Acquisition Event; or
(b) a Holder Request given in respect of a Trigger Event under clause 5.1(b) or clause 5.1(c),
(each a Relevant Event), then the denominator in the formula in clause 7.1 for the Hybrid is equal to the lesser of:
(i) 97.5% of the offer price under the takeover bid or the consideration under the scheme of arrangement the
subject of the Relevant Event; and
(ii) the VWAP (expressed as a dollar value) calculated in respect of the period of 20 Business Days on which
trading in Ordinary Shares took place immediately preceding (but excluding) the announcement of the
takeover bid or the scheme of arrangement the subject of the Relevant Event, plus 50% of the amount
calculated by subtracting that VWAP from the offer price under the takeover bid or the consideration under
the scheme of arrangement the subject of the Relevant Event.
In the case of non-cash consideration, the calculations under this clause 7.2 will be performed using the value of the offer
price or the consideration as reasonably determined by the Issuer. The Issuer may rely on the advice of an investment
bank, accounting firm or other professional financial adviser in this regard.

 

[lianeisme]

If you wish to register for the class action against Elders here are the details
Shareholders can contact Slater & Gordon on 1800 555 777 or by email at
newclientservices@slatergordon.com.au

 

[w534220]

why, when the ELD's are up 52% from their lows are the ELDPA's (which are senior to common equity) not bouncing at all? ELDPA's remain a bargain.

 

[nulla nulla]

why, when the ELD's are up 52% from their lows are the ELDPA's (which are senior to common equity) not bouncing at all? ELDPA's remain a bargain.

Or eld is now overpriced on euphamistic optimism? Big run up today from a low of $0.43. to a high of $0.515. Is someone buying up a stake?

 

[laurie]

Or someone is anticipating a Take Over why would QBE have a 10% stake maybe to block such a move of a t/o!!

laurie

 

[IrishDigger]

Or eld is now overpriced on euphamistic optimism? Big run up today from a low of $0.43. to a high of $0.515. Is someone buying up a stake?

A check with Online CommSec shows more buyers than sellers, interesting to 'Watch' as someone knows something.

 

[nulla nulla]

A check with Online CommSec shows more buyers than sellers, interesting to 'Watch' as someone knows something.

The share appeared to struggle yesterday after good run ups earlier in the week. Volumes also dropped off. This contrast with the general recovery of other shares where the xao made a gain for the day of 77 points.
Interestingly the macd indicated the share is gapping above the moving average.

 

[GumbyLearner]

They sold their two most profitable interests last financial year. Their entire stake in AAC and another chunk of Elders Bank to BEN. Look elsewhere IMHO!

DYOR

I stand by this.

The glossy write up ELD had in the Fin Review May 2009 pages 52-53.

Total smokescreen.

And Malcolm Jackman quotes:

Fin Review: "Why should investors buy Futuris rather than other agricultural stocks when the share price is hovering around 18 year lows?

Jackman: I think it's because of the Elders brand. It's been around for about 170 years and is the oldest in Australia. Every so often severe drought has whipped it to within an inch of it's life, but it will continue and survive and prosper.

Jackman: Agribusiness in Australia is a world-class enterprise. People wanting to invest in the country look for it's competitive advantages, and agribusiness is one of those. The thing that makes us unique is our connection with farmers across the country.

Jackman: We are on track with our agenda of change, and the company is in better shape than it was six months ago, despite share price lows."

Bulldust!

 

[nulla nulla]

I stand by this.

The glossy write up ELD had in the Fin Review May 2009 pages 52-53.

Total smokescreen.

And Malcolm Jackman quotes:

Fin Review: "Why should investors buy Futuris rather than other agricultural stocks when the share price is hovering around 18 year lows?

Jackman: I think it's because of the Elders brand. It's been around for about 170 years and is the oldest in Australia. Every so often severe drought has whipped it to within an inch of it's life, but it will continue and survive and prosper.

Jackman: Agribusiness in Australia is a world-class enterprise. People wanting to invest in the country look for it's competitive advantages, and agribusiness is one of those. The thing that makes us unique is our connection with farmers across the country.

Jackman: We are on track with our agenda of change, and the company is in better shape than it was six months ago, despite share price lows."

Bulldust!

Todays price action would tend to support your perspective. It also appears to have lost support with further declines in volume and a drop off in share price today. Last one out, please turn off the lights.

 

[laurie]

Thanks to the Russian Prime Minister Vladimir Putin signing an order banning grain and flour exports from August 15 to December 31. So watch wheat prices hit the roof this should be positive news for ELD

laurie

 

[Tommy T]

ELD heading north today, interesting - perhaps bacuase of some spin from MJ?

 

[IrishDigger]

It's like the rest of the stock market, one day it's going north and the following day it's going south.

 

[Tekwrek]

Any Idea why ELD sp surged today despite the market falling.
I cannot find any anouncements.

 

[oldblue]

Any Idea why ELD sp surged today despite the market falling.
I cannot find any anouncements.

ELD is a trader's stock these days - both short and long - and the SP often fluctuates over a relatively wide range, day to day.

I suspect that yesterday's movement was related to short covering. The previous day's turnover in ELD was around 21% shorts.

 

[pigeondog]

ELD up more than 6% today on no news. Could just be trading/noise.

I really wish these guys would ditch their MIS delusions and get on with the agriculture side of the business.

 

[nulla nulla]

ELD up more than 6% today on no news. Could just be trading/noise.

I really wish these guys would ditch their MIS delusions and get on with the agriculture side of the business.

The ASIC shows a lot of "open" short trades on ELD. What with the rain, flooding and crop damage at present I would not be expecting the shorters to be in any hurry to close out just yet. Any rise atm is likely to be "short" lived imo. pun intended.

 

[shinobi346]

ELD up more than 6% today on no news. Could just be trading/noise.

I really wish these guys would ditch their MIS delusions and get on with the agriculture side of the business.

The price increase was due to BEN buying the rest of Elders banking division on that day. It would have pushed ELD's cash position up nicely. I hope the banking part doesnt have an insurance arm with all the rain we're getting. >_>

 

[Tekwrek]

Elders up 12.5% anyone got any news?

 

[Tekwrek]

Elders up 12.5% anyone got any news?

Rose to 25.7% today before settling at 13.7%.