GXL - Greencross Limited

Greencross down around 20% to $4.25 today after announcing a FY2018 EBITDA downgrade of approximately 12%. Full year earnings are now expected to be between $97 million and $100 million.

The company also announced that it now expects to recognise between $16 million and $20 million of primarily non-cash impairments which will be reflected in the FY2018 full year statutory result.

I think that today's share price bloodbath may have been an overreaction as the market seems to be in no mood for earnings downgrades at the moment. As a result, the sell-off may have been a little overdone.

In any case, the GXL share price is now back to where it was in the first half of 2013, so some may see this dip as a buying opportunity. My gut feeling is that it probably won't be too long until it sees $5 again.

Time will tell.

greggles said:

My gut feeling is that it probably won't be too long until it sees $5 again.

Time will tell.

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My gut was wrong. However, speculation today about a takeover of Greencross has pushed its share price up 17.9% to $4.88. So it's almost back at $5. Here's the text of the announcement:

Response to Press Speculation

Greencross Limited (“Greencross”) refers to press speculation regarding potential interest in Greencross.

Greencross confirms that it has received and is engaging with a number of parties regarding credible proposals.

The proposals are subject to a number of conditions and are expressed as being non-binding and incomplete. The proposals are required to be kept confidential, and there is no certainty that any proposal will result in a transaction involving Greencross, what the terms of any such offer would be, or whether there will be a recommendation by the Board of Greencross.

Greencross is aware of its continuous disclosure obligations under ASX Listing Rules and will ensure it is in full compliance at all times.

For further information, please contact Robert Wruck.

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Very cautious language but it sounds to me like a deal is ready to be made. It's no surprise that someone thought GXL represented value at these levels. All will be revealed very soon I'm sure.

Greencross Limited has announced this morning that it has entered into a Scheme Implementation Agreement with Vermont Aus Pty Ltd an entity owned by funds managed by TPG Capital Asia and TPG Growth to acquire 100% of Greencross shares for $5.55 a share.

Greencross directors have unanimously recommend the Scheme subject to an Independent Expert's Report concluding that the Scheme is in the best interests of Greencross shareholders and there being no superior proposal.

On February 27th, 2019, Greencross Limited (GXL) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between GXL and its shareholders in connection with the acquisition of all the issued capital in GXL by Vermont Aus Pty Ltd.