I am not sure, I haven't seen the leases, but unless their is some sort of option to renew or option to purchase built into it I guess the new lease on certain strategic properties could have a bit of competitive bidding for it, Hell if I was the competition I might bid for the new lease just to increase my competitions rent
Ingham’s owns the majority of its operating plant and equipment, while its land and buildings are managed either through leasehold or freehold arrangements. Ingham’s operates 79 leasehold properties, the majority of which are secured with 20 year terms with options to extend (five further terms, with each term for 10 years).
Took less time to search lease in the prospectus than to write this post.
This is a bit of an extract of something I posted a couple of months ago...... I am still peeved about those chicken tenders!
Extract:
Tonight when I went to cook my Inghams chicken tender I discovered that they had changed into that mushy chicken nugget centre instead of crumbed chicken breast fillet as they were a few weeks ago. This got me thinking, wasn’t Inghams to be floated? Upon further investigation I discovered that Inghams which had been a family run business for almost 100 years and was sold to TPG in 2013 for 880M. After selling most of their hard assets for 650M and loading the balance sheet with debt (620M - depending on which report) TPG should come away with a tidy profit. It is slated to list in September/October this year for 1.3B plus according to The Australian.
These are my calculations for TPG’s profit assuming a 1.5B listing price and assuming TPG is able to sell down their remaining shares near the list price:
Profit = list price + asset sales – (equity to purchase)
Profit = 1500M + 650M – (880M-620M)
Profit = 1890M
Not bad for an initial investment of 260M, which gives a return of over 7000% in 3 years for their efforts.
Assuming a listing price of 1500M, 620M in debt and EBITDA of 225M* (The Australian) the EV/EBITDA of Inghams post float will be 10. My question is simple – Why would you buy the Inghams float? After my experience tonight I feel that 225M will be over earning as they have lowered quality and customers will catch on and stop purchasing their product.
* I notice now they are saying and EBITDA of 190M or so.
This looks so much like spotless to me. Maybe better than Dick Smith though?
This is a bit of an extract of something I posted a couple of months ago...... I am still peeved about those chicken tenders!
Extract:
Tonight when I went to cook my Inghams chicken tender I discovered that they had changed into that mushy chicken nugget centre instead of crumbed chicken breast fillet as they were a few weeks ago. This got me thinking, wasn’t Inghams to be floated? Upon further investigation I discovered that Inghams which had been a family run business for almost 100 years and was sold to TPG in 2013 for 880M. After selling most of their hard assets for 650M and loading the balance sheet with debt (620M - depending on which report) TPG should come away with a tidy profit. It is slated to list in September/October this year for 1.3B plus according to The Australian.
These are my calculations for TPG’s profit assuming a 1.5B listing price and assuming TPG is able to sell down their remaining shares near the list price:
Profit = list price + asset sales – (equity to purchase)
Profit = 1500M + 650M – (880M-620M)
Profit = 1890M
Not bad for an initial investment of 260M, which gives a return of over 7000% in 3 years for their efforts.
Assuming a listing price of 1500M, 620M in debt and EBITDA of 225M* (The Australian) the EV/EBITDA of Inghams post float will be 10. My question is simple – Why would you buy the Inghams float? After my experience tonight I feel that 225M will be over earning as they have lowered quality and customers will catch on and stop purchasing their product.
* I notice now they are saying and EBITDA of 190M or so.
This looks so much like spotless to me. Maybe better than Dick Smith though?
Forgot to add 550M paid out in dividends as well to private equity group owners
Hi Andy
One thing that struck me was your inclusion of the 650M from selling the properties in your calculation. I would have thought the business sells the properties and maybe makes a capital return to the equity holders would be the process - not TPG pocket the funds directly. So I opened the prospectus for a second time - (which by the way is once too much)
These are the only transactions with owners I can see.
Paid $308.4 million for it would seem approx. 328 Million shares currently outstanding - the remainder of the rumoured 880M purchase price must have been debt funded and looking at the quantum of debt on the books that sounds about right.
Received back a capital return of $200.5M and dividends of $314.6.
IPO target range is $3.57 to $4.14. They are not selling all their shares at IPO but assuming they could, at each price level the current owners shares are worth between 1171M and 1358M
Certainly a nice payday for TPG if the IPO is a success (not 7000% maybe 550-600%) but does their profit matter? Your other points about quality and stacking EBITDA seem much more relevant.
disclaimer:
I have no interest in applying for shares at IPO.
If the potential rewards are not high enough for the initial risk as most posters have agreed on, how do the insto's justify their purchase? Who buys overpriced, asset poor, debt laden companies? Is it the same ones who bought DSE?
PE deserves to be stuck with it, so why aren't they?
I am confused, miner, are you buying some shares, some chook, or both??!!
(I buy a bit of chook, but not these shares!)
Looking at an EquiVolume chart it appears there is a very, solid support level at $4.30. Should it fall below $4.10, it might battle to get back up for some time with the volume of selling pressure.
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