TRS - The Reject Shop

[Smurf1976]

just ask yourself why in the heck does a billionaire businessman is so keen on acquiring this piece of crap at current prices.

If a billionaire wants to buy something then one thing's for sure.

It's true value is, in their opinion, higher than they are offering.

They wouldn't have become a billionaire if that wasn't how they operate.

 

[luutzu]

If a billionaire wants to buy something then one thing's for sure.

It's true value is, in their opinion, higher than they are offering.

They wouldn't have become a billionaire if that wasn't how they operate.

Exactly, right?

By the look of it, I don't think these guys had a sit down with proper adult supervision on how to approach this takeover.

I mean, it's one thing to slowly load up from traders or investors who doesn't have the patience to wait for a turn around. But to go all in with scar tactics and low ball, making it out as though they're doing us a favour... jezz man. Even I know not to fall for that.

Recall how Kerry Packer float Nine for some crazy hundreds of million. Then bought it back for nothing. And that's before he met Alan Bond.

From Paul Barry's Rise and Rise of Kerry Packer... what the goana did was quite brilliant.

So he made very good money floating Consolidated Press, which contain Channel Nine. Being the biggest holder he practically run and own the thing.

But instead of paying dividends etc., he decided business is pretty bad. No divvy, no nothing. Sales aren't good either etc. etc.

Fund managers who knew he's playing them eventually gave in because they can't stand watching the stock price going nowhere.

So he took it off their hands. For next to nothing.

 

[luutzu]

I'm going through Monadelphous' old annual reports and picked up something that might be relevant to TRS' management thinking right now.

In 2000, MND was having its 7th consecutive years of good growth and profit. Management see that business is slowing down, they've been predicting this a couple years before...

But with high level of franking credits and little debt, strong cash flow...

They decided to increased the year's dividend by 48%. Reinstate the DRP.

This serve three purpose... one is to preserve cash for the difficulties they see coming; two, get rid of the franking credit, handing it over to investors... three, the DRP will also mean long-term investors can buy more shares in the company for a whole lot less.

The Reject Shop, according to their statement, has $53M in franking credit, or some $1.85 per share.

With barbarians knocking at the gates, this should remove the hidden value, the increased dividend possibly raise the share price, and long term shareholders will be happier supporting current management.

Just a guess of course.

 

[bigdog]

ASX report today

https://www.insideretail.com.au/new...-the-reject-shops-profit-in-first-half-201902

Negative same-store sales weigh on The Reject Shop’s profit in first half
February 20, 2019

Discount variety store The Reject Shop booked $10.6 million in net profit after tax in the first half of FY19, around 40 per cent less than the $17.7 million of profit it posted in the previous corresponding period, which was in line with its guidance.

Comparable sales were down 2.6 per cent over the half, which the business said reflected the difficult trading environment in September, October and November.

“This has been an extremely challenging period to be operating a retail business and the retail sector as a whole has felt the impacts of lower consumer confidence, flat wages, changing spending patterns and the rise in energy costs,” The Reject Shop managing director Ross Sudano said.

“The Reject Shop has not been immune from these factors… [However], we were extremely pleased to deliver strong performance in the Christmas trading period, which is the most important trading period of the year for The Reject Shop.”

Sudano said the team is in the final stages of its “Brilliant Basics” change program to drive future growth, which contributed to a 0.2 per cent rise in comparable sales in December.

This increase was short-lived, with comparable sales down 2.8 per cent in the first seven weeks of the second half of FY19. The business expects to see net loss of between $6.5 and $7.5 million in the second half of FY19.

“This means the updated full year NPAT guidance range is $3.1 million to $4.1 million,” Sudano said.

The Reject Shop chairman William J Stevens took the opportunity to address the “unsolicited and inadequate” take-over bid made by Allensford Pty Ltd, once again urging shareholders to reject the offer.

“Allensford questioned the basis for the profit guidance and they questioned how The Reject Shop could maintain guidance in the face of November sales,” Stevens wrote in a statement to shareholders.

“With guidance now met, and from the result of actual sales, Allensford’s speculation has proven to be unfounded.”

The takeover offer was previously extended into March to shareholders time to consider the company’s first-half results before making their decision.

“The outlook for retailers continues to worsen and like-for-like sales for most retailers has been challenging,” Allensford director Nick Perkins said.

 

[Clansman]

I have a strong suspicion one of the next announcements out of TRS will have the phrase " in the absence of a superior offer" in it.

Going exactly as expected.

 

[luutzu]

Going exactly as expected.

How does:
Stevens': "With guidance now met, and from the result of actual sales, Allensford’s speculation has proven to be unfounded.”

In any way "exactly as (you) expected": "In the absence of a superior offer"?

 

[Clansman]

No calvary coming for this mob.
In the words of Fleetwood Mac.

If your life was bad to you,
just think what tomorrow will do.

 

[bigdog]

ASX Ann today

_________________________________________________________________________________
On-market takeover offer by Allensford Pty Ltd as trustee for the Allensford Unit Trust for all of the shares in The Reject Shop Limited (ACN 006 122 676)

Allensford notes that its on-market takeover offer for The Reject Shop Limited will close at 4:00pm (Sydney time) on Tuesday 5 March and will not be extended further. Until this time, TRS shareholders are able to sell their TRS shares to Allensford for $2.70 in cash, realising certain and immediate value for their shares.

 

[Smurf1976]

So at this point is there any expectation that the offer will actually be extended or changed in some way?

Or is that the offer closes and whatever % of the company they've got is where they'll leave it?

Or they get enough to then proceed to compulsorily acquire the rest?

I don't hold, just interested.

 

[aus_trader]

So at this point is there any expectation that the offer will actually be extended or changed in some way?

Or is that the offer closes and whatever % of the company they've got is where they'll leave it?

Or they get enough to then proceed to compulsorily acquire the rest?

I don't hold, just interested.

With deadline tomorrow, I don't think Allensford has enough stake to proceed to compulsory acquire the company. They currently have around 5%.

I think the bidder has to have around 50% before they can compulsorily acquire the rest of a company.

It'll be interesting what happens tomorrow, either extension of the offer or expiry which will impact the share price which has been stuck in the $2.70 area since November last year.

I also don't hold TRS.

 

[luutzu]

With deadline tomorrow, I don't think Allensford has enough stake to proceed to compulsory acquire the company. They currently have around 5%.

I think the bidder has to have around 50% before they can compulsorily acquire the rest of a company.

It'll be interesting what happens tomorrow, either extension of the offer or expiry which will impact the share price which has been stuck in the $2.70 area since November last year.

I also don't hold TRS.

From memory, and this was years ago, compulsory when at 90%.

 

[luutzu]

So at this point is there any expectation that the offer will actually be extended or changed in some way?

Or is that the offer closes and whatever % of the company they've got is where they'll leave it?

Or they get enough to then proceed to compulsorily acquire the rest?

I don't hold, just interested.

I hold.

My thinking is that they might have made a mistake in announcing the offer when they barely got 3% of TRS, thinking they'll easily get a whole lot more paying some 20% "premium" on the then $2.40 or so per share.

That obviously didn't work out as they'd hoped so with tomorrow's expiration, they'll call it quit. BUT...

In calling it quit they're hoping that the price will crash... then they would either quietly scoop up then make another offer some time down the track... just to help us from ourselves and such.

I hope it does crash 'cause I got a few bucks and not afraid to use it.

 

[aus_trader]

From memory, and this was years ago, compulsory when at 90%.

I thought to look it up luutzu, since I am not sure what it currently is and I haven't had any of my holdings going to compulsory acquisition in a take over recently. The government website "www.takeovers.gov.au" says the following:

""
Compulsory acquisition
A bidder under a takeover bid11 may compulsorily acquire any remaining securities in the bid class if during, or at the end of, the offer period, the bidder and their associates have:

• relevant interests in at least 90% (by number) of the securities in the bid class and
• acquired at least 75% (by number) of the securities that the bidder offered to acquire under the bid.

""

 

[Clansman]

Look out below

 

[bigdog]

ASX announcment today
16/10/2019 8:25:10 AM AGM Address to Shareholders (including trading update) (PDF 190.3 KB) 16/10/2019 8:24:50 AM Trading Update (PDF 111.7 KB)

This morning the struggling retailer revealed that its performance has improved since the end of FY 2019.

During the first 15 weeks of FY 2020 the retailer’s comparable store sales are up 0.3% over the prior corresponding period. This compares to a 2.5% decline during the second half of FY 2019.

010

 

[sptrawler]

The share price is still climbing post AGM, is it a turn around, or a dead cat bounce?

https://www.asx.com.au/asxpdf/20191016/pdf/449jqt760sxz06.pdf

 

[bigdog]

DCB

Will need miracles to occur!!

 

[aus_trader]

Pick for the December Stock Tipping competition. The stock is severely hammered and hoping for a short term bounce cheered on by some better sales numbers for the month of December due to Christmas shopping spree...

 

[aus_trader]

Given the current lock down environment where everyone is trying to save a few bucks with their shopping, I think reject shop is likely to continue to attract sales. They have a lot of everyday items at a discount to the prices offered by the major supermarkets.

Price is hammered but may head higher as sales numbers get reported...

 

[mangojoe]

An Article with a deeper positive look into the business from Mar 9, 2020

https://www.afr.com/companies/retail/reject-shop-s-plan-to-shrink-back-to-greatness-20200305-p547cc

And another:

From the 16th to the 22nd of March 2020 sales at The Reject Shop’s 354 stores were up 36.1% year-on-year.

https://www.channelnews.com.au/the-reject-shops-sales-up-36-in-the-past-week/