CML - Coles Myer

[stockGURU]

CML has had a good run for a year and a half or so. However, I'm skeptical about it's ability to sustain it's current share price growth.

Why?

Well I'm not a genius at fundamental analysis or technical analysis but I feel that the grocery market in this country is becoming more competitive. I've just had a bunch of these Aldi supermarkets open up near me and they are definitely cheaper than either Coles Myer or Woolies.

Surely in this type of competitive market, CML must either cut costs or allow their bottom line to suffer, indicating a retracement is eventually on the cards.

Anyone else have an opinion on this one? Is it forming a double top?

[Guest]

I dont know where the shareprice is going to go but from an insiders point of view CML is goin from strenght to strenght. I looked at CML when its price was around 4.80 and thought if only I had the capital. This was when Fletcher had only been at the helm for under a year. Now we are just starting to see the effects of the practices he has put in place. Cutting cost? Retrenchments? For one you talk as if CML is only supermarkets (which it isnt). In the last year and a half 2 major chains in CML have been axed becuase of there inablity to make a profit, 30+ headoffices have been closed and intergrated into other existing State/National offices (taking advantage of modern technology). (many jobs where axed). Not a month has gone by where they havent told us of a new rollout to increase profits and cut costs. Personlly I agree that it is duanting looking at a share that has doubled its price in just over 12mnths and would be sceptical to buy but I think that there is still plenty of growth in the stock. CMl is only 2.5 yrs into its 5 Yr target of becoming Australias No1 retailer.

Just my two bobs worth.

[stefan]

I'd say if there will be a pull back it is short lived as the $3000 baby bonus hits in November. That should make retailers very happy as we've just seen with the $600. If 600 bucks can make that much of an impact then I'm wondering what $3000 will do. Then there's the christmas shopping (probably arm in arm with the baby bonus) and that should be excellent news too. So for the next 4 months I can't see many problems for CML.

They have come a long way, but it would appear that there is a reason for it.

Happy trading

Stefan

[still_in_school]

Hi StockGuru,

on the T/A, there is a doji cross showing, this could be sign of a reverse, in a small push in an uptrend, though looking at the chart, a symmentrical triangle has been formed, based on the candlestick chart... it does look like its running out of puff, could see a nice rally, though, on the current chart the T/A is showing this might not be sustainable, if there is a reversal, you should see a nice confirmation, of a bullish or gaping pattern, or even a morning star appearing...


though based on fundamentals, not too sure... more of a tech... (is there any new releasing or company annoucments soon? )

Cheers,
sis

[jkool]

CML: I must agree with Stefan here. I dont see CML to change its trend for at least next few months. I think the new top management really made the difference there and I also know how efficiently they are managing on the lowest (store) levels. Its definatelly HOLD stock in my portfolio.

Sis: Mate I love the way you colorfully describe each of your little charts. If only I had your imagination when looking on those boring lines in the chart. Good stuff mate keep it up I really do enjoy reading it.

[GreatPig]

I dont see CML to change its trend for at least next few months.
Here's the current chart. By my reckoning, it has broken down from the symmetric triangle indicating at least a minor reversal. I think a down-side target here would be about $8.55.

Cheers,
GP

[still_in_school]

Hi Guys,

pretty much agree with GreatPig, on the T/A the chart is showing a red inverted hammer, previously with a long bearish shaven candle with small wicks, on the intraday charts, there is a strong bull rally, but the bearishness, is being confirmed by the long shadow wicks being displayed,

IMHO, do believe the share will go down further, just having a quick look at the e*trade interactive charts, CML, is trading below the MACD, and below the oversold (in the bollinger bands), a strong bull rally will be displayed, though there is more confirmation of a downtrend due to, a red inverted hammer and low volume of trades going through...

Cheers,
sis

[stefan]

CML: I must agree with Stefan here.
I hope it wasn't too hard ;D

Happy trading

Stefan

[jkool]

Stefan: Nah;)

sis&GreatPig: Oh I see where u coming from. Yes you may as well be right in your short term CML trend analysis, but on the medium/long term (now how does each of us define that? for me it would mean buy mid August and hold for ca 5-6mths) I say that nice steady upclimb will prevail.

Personally I regard CML as a defensive stock and do not have any money in it.

[stefan]

Well, it's down from $9+ and based on what I read, I'd say it may be an attractive buy this week. Their figures are great and the outlook sounds promising:
Outlook
Earnings guidance for FY2004 Group Net Profit after Tax has been upgraded from $530 – $540 million
to approximately $565 million. This is subject to the completion of the final year end audit and does not
include the $24 million (after tax) one-off interest benefit from the Employee Share Plan Trust
restructure.
The FY2005 sales outlook for the group remains positive. The Food and Liquor business is expected to
deliver solid comparable sales growth, albeit at a more moderate rate than the fourth quarter rate. In
non-food, we expect mid single digit sales growth in line with strategy. Although early into the first
quarter, sales trends are well within our expectations following the removal of the shareholder discount
program.
The FY2004 profit result will be announced on 22 September, 2004.

Will be watching closely. Don't know if it dips as low as 8.5 GreatPig. From my point of view it should start rising soon. So let's see...

Maybe I missed something as I didn't follow it recently. Just checked price history and news to come up with this.

Happy trading

Stefan

[sam21poddy]

CML is up 23c today on heavy volumes but I can't see any announcements or anything in the news. It hasn't been moving much lately so I am wondering if anyone knows anything. I am holding and would like to get out as it is pretty much at its high. My broker also has a 12 month price target of $9.53 which is 20c lower than what it is today. Has anyone heard anything?

[Aussiejeff]

CML is up 23c today on heavy volumes but I can't see any announcements or anything in the news. It hasn't been moving much lately so I am wondering if anyone knows anything. I am holding and would like to get out as it is pretty much at its high. My broker also has a 12 month price target of $9.53 which is 20c lower than what it is today. Has anyone heard anything?

Rising volumes and RSI looks like it should move a few cents higher in the very short term. Stochastic trend appears to support this.

Cheers,

AJ

[GreatPig]

Looks to have broken out of a triangle. Target could be around $11.

GP

[GreatPig]

A jump today into blue sky territory.

Cheers,
GP

[I don't hold]

[chansw]

Here is an article "Coles shares rocket on interest in Myer" on The Sydney Morning Herald 1 Sept 2005

http://www.smh.com.au/news/business/coles-shares-rocket-on-interest-in-myer/2005/09/01/1125302677369.html

[sam21poddy]

I think this is a case of insiders knowing something before it became public knowledge. I had a gut feeling that that was what was happening.

[chansw]

http://www.forbes.com/home/feeds/afx/2006/08/17/afx2955652.html

Australia's Coles Myer says may be takeover target - UPDATE
08.17.2006, 06:24 AM


SYDNEY (XFN-ASIA) - Retailer Coles Myer Ltd said in a statement that it has received an approach from parties wishing to discuss the possibility of a takeover of the company, but it declined to name the parties, saying only that it would consider any 'bona fide' proposals put to it.

There has been speculation that US retailer Wal-Mart Stores Inc was considering an offer to buy Coles, after it sold its Myer department stores in June to concentrate on its super market and discount store businesses.

But CommSec retail analyst, Goerge Saligari said it would be premature to assume Wal-Mart was the potential buyer, as there were many other possible candidates including international retailers as well as private equity investors.

He mentioned US. buyout firm Kohlberg Kravis Roberts & Co and Newbridge Capital, the Asia-focused arm of U.S.-based Texas Pacific as other parties that may be interested.

Last July 31 Coles Myer chief executive John Fletcher said he had read reports of Wal-Mart's apparent interest but Coles Myer has had 'no knowledge of any interest that they have had in either us or Woolies (rival Woolworths Ltd) up until now.'

The volume of trades in Coles shares has risen sharply in recent days as speculation of an offer circulated in the market. On Thursday the stock rose rose 1.40 aud or 11.97 pct to finish at 13.10 aud, a record close. A total of 31.9 mln out of of 1.89 bln shares on issue were traded.

Saligari said in the last week daily trading volumes have picked up to around five mln shares from a average of one mln shares before the takeover speculation emerged.

In its statment today the company added that it is committed to implementing the new strategic direction of re-branding as Coles Group Ltd. It will reorganize its operations into three business groups following the sale of its Myer department stores to private equity consortium TPG-Newbridge Capital and the Myer family for 1.4 bln aud.

The new business groups will market food, liquor, fuel and general merchandise under one Coles brand, the Target discount stores business, and home office supplier Office Works.

Earlier today, the retailer also reported that it expects to meet its year to July net profit guidance of 785 mln aud after a 7.5 pct year-on-year rise in fourth quarter sales to 8.62 bln aud. It said annual sales to July increased 5.7 pct to 34.41 bln aud, which excludes sales from the Myer department stores.

[michael_selway]

I think this is a case of insiders knowing something before it became public knowledge. I had a gut feeling that that was what was happening.

looks liek it happedn again

thx

MS

[kennas]

There's probably still a trading opp in this if you can get on early. Looks like there's more than one potential buyer, and the odds are the initial offer will have to be bumped up.

[Julia]

I'm not usually into short term trading but have just placed a buy order on CML. Until the take-over is stitched up the SP should have more to run.
Anyone else?

Julia

[aobed]

I'm not usually into short term trading but have just placed a buy order on CML. Until the take-over is stitched up the SP should have more to run.
Anyone else?

Julia

I did the same Julia.. will be interesting to see how much run is in the share price. A bit of a punt really.

[kennas]

Might be right Julia, but becoming more rsky now. If more information doesn't come out, traders will dump it. Could see a pullback this arvo for that reason. Resonable to still believe that it will continue to go up, based on anacdotal history of these sort of events. (ie, according to what I can recall - so it's probably wrong. :) )

[pacer]

Definietely buy CML......Don't let the yanks and big boys crap on us Ozzies....no way I say.....................c'mon aussie cmon...............

Save some sort of independance.....what's next.......Well the Gov't is already sold out to the yanks and Japs...............and the Japs were at war WITH US, once......Like the Japs said .....we lost the Battle but we will win the war.......the stockmarket tells all..........

Bugger this mate I'm buying gold...............and CML....

BUY A LOT OF CML to protest..........Do we want to have our food prices set by international conglomerates?........


BUY CML and Vote.............."NO" ...........to any take over ...........do you want the poor in this country to be less well off ?.......They will dictate they price of everything.......

THIEVES>>>>THE BUNCH OF THEM!!!!!!!!!

Target is $17...................C"mon it'll be worth $19-15 in 2 ytears...so why sell?

They say there's only two things guaranteed in life .........DEATH AND TAXES.................BUT THERE'S ONE MORE.............FOOD IN THE BELLY'S OF THOSE PAYING TAXES......Take away the small business and you will see your bills go up!!!!!!!!!!!!!!!!!!!!

Please..... for the sake of a NATION Dont't let this happen.........LOSE A LITTLE ON YOUR SHARE PRICE TO GAIN THE RESPECT OF THE WORLD.....WE WON'T BE BULLIED !

P.S. I AM NOT LONG ON CML...THIS IS GENUINE CONCERN FOR THE AUSTRALIAN PUBLIC AND THE REST OF THE WORLD AS WE KNOW IT!

BUY LOTS of CML and "VOTE NO"....to a .....TAKE OVER OF AUSTRALIA BY FOREIGN POWERS..................TRUST ME ....IN TWO YEARS THE SP WILL BE THE SAME BUT THE PRICE OF FOOD WILL BE WAY UP....

OUR VETERENS, PARENTS, LESS WELL OFF ECT...ALL THE OLDER GENERATION WILL BE DICTATED TO BY YANKS AND JAPS!.............AND THEN IN A FEW YEARS TIME IT WILL BE YOUR TURN TO BECOME THE "OLDER GENERATION"....AND GET SCREWED!
:mad:
SUPPORT THE AVERAGE AUSSIE!

DON'T OFTEN HEAR OF A STOCK BEING OVER BOUGHT THEASE DAYS... BUT THIS IS WORTH IT!

:(.............PLEASE DON'T LET THIS HAPPEN TO OUR NATION......................:banghead:

[pacer]

IF COLES GETS SOLD I AM GOING TO move (not back) to New Zealand.....and grow my own food...'cause you all suck...

If this a sign of things to come then I'm out..................

I'm gonna leave all forums in disgust and head off down south to my Hobby Farm and live off the land ......

I hope all you who don' t support our nation on a NO vote all get shafted & nuked....I'll be going to .....IGA from now on....and buy from independant fuel stations!!!!!!

stuff em "I'd rather pay the extra $1 now, per tank, than have these %@#*&!@ rob me later.

Support Aussies not the markets...buy our companies back!

Trust me ...we are on the verge of a major recession if we don't support ourseves here in OZ..!!!!

[chansw]

pacer, I agree what you said. Personally, I don't want this to go ahead and am happy to continue to hold my CML shares (more than 6 years now). This is a company that employs almost 220000 staff in Australia and New Zealand. I am confident the company will continue to do well in the long term. More importantly, I don't want to see massive job cuts by the private equity fund. Think about the number of families will be affected. Some of the people who bought the shares today might not like hear this. However, I say what my heart thinks is correct. Could we keep this iconic company continues to be owned by the Australians?

[Julia]

pacer, I agree what you said. Personally, I don't want this to go ahead and am happy to continue to hold my CML shares (more than 6 years now). This is a company that employs almost 220000 staff in Australia and New Zealand. I am confident the company will continue to do well in the long term. More importantly, I don't want to see massive job cuts by the private equity fund. Think about the number of families will be affected. Some of the people who bought the shares today might not like hear this. However, I say what my heart thinks is correct. Could we keep this iconic company continues to be owned by the Australians?

Whilst I can sympathise with what you're saying, such feelings are in a tiny minority I suspect. Not much room for sentiment in the business world.

Frankly, if someone were to run Coles supermarkets so that I didn't have to be the last in the line of 25 people in the "Quick Service "checkouts when only one of four checkouts is staffed by an operator (25 minutes to get through the last time), I'd welcome them. It's just no wonder that Woolworths is a far more profitable business. They understand the concept of service.

Julia

[bunyip]

Hi StockGuru,

on the T/A, there is a doji cross showing, this could be sign of a reverse, in a small push in an uptrend, though looking at the chart, a symmentrical triangle has been formed, sis

Symetrical triangle?? What are the dates of the four points of the symetrical triangle?

Bunyip

[YELNATS]

Frankly, if someone were to run Coles supermarkets so that I didn't have to be the last in the line of 25 people in the "Quick Service "checkouts when only one of four checkouts is staffed by an operator (25 minutes to get through the last time), I'd welcome them. It's just no wonder that Woolworths is a far more profitable business. They understand the concept of service.

Julia

I run a business right next to a large Coles Supermarket and I observe that Coles staff are arrogant and not customer-conscious. Their management appears lax and compacent and their work practices need smartening-up. They could start by addressing their receiving dock problems, where suppliers are not allowed to drop-off unless "permitted" by dock staff to do so, and getting rid of their hourly coffee and smoko breaks.

Thank goodness I sold my CML and bought WOW years ago.

Regards. YN.

[clowboy]

Try working for them and coping all the customers abuse.....

[clayton4115]

what will happen to our shares if cml is sold?

[shinobi346]

The Courier Mail is reporting New York billionaire Henry Kravis as being one of the people interested in buying out CML. Henry Kravis is famous for buying out big companies and carving them up, selling them off piece by piece.

http://www.news.com.au/couriermail/story/0,23739,20179290-3122,00.html

[clayton4115]

but that doesnt answer my question

[Smurf1976]

Whilst I can sympathise with what you're saying, such feelings are in a tiny minority I suspect. Not much room for sentiment in the business world.

Frankly, if someone were to run Coles supermarkets so that I didn't have to be the last in the line of 25 people in the "Quick Service "checkouts when only one of four checkouts is staffed by an operator (25 minutes to get through the last time), I'd welcome them. It's just no wonder that Woolworths is a far more profitable business. They understand the concept of service.

Julia
I work near a Woolworths store and, while they do seem better than Coles, I'm wondering if they have any staff that don't smoke. Every time I go outside there's always some 20-ish female out there puffing away.

Judging by the number outside smoking, and assuming that's not all they do when not actually working, they must get an incredible number of breaks. At least they are reasonably polite and the service isn't usually too bad, although I've had the experience of waiting 10 minutes in the "fast" lane whilst all the other checkouts are closed and staff mill around the service desk.

More to the point, over the past 7 years that I have worked nearby, they have changed ALL the checkout staff several times. I just can't believe that they ALL resigned at the same time so it looks like some sort of funny business going on to avoid entitlements, pay rises etc. I suspect this explains why staff don't seem to make any obvious effort to do more than the minimum - there's simply nothing for them to gain by doing so as they'll have their hours progressively cut back (until they leave) sooner or later anyway.

As for Coles, I just don't get the logic behind this idea of branding all the stores "Coles" rather than keeping K-Mart etc as separate names. It might not upset locals but consider what happens when you go to any city or town that you are not familiar with.

Sooner or later you find yourself near shops and you see a sign that says "Shell" so you immediately think "petrol". You see a sign saying "Coles" so you think "supermaket". You see "Railway Station" so you think "this is where to catch a train". I just can't see the logic of having it so that "Coles" might mean a supermarket, or perhaps a petrol station or perhaps a variety store. Let's hope they don't start running taxis or selling fish and chips otherwise it's going to be incredibly confusing...

I just don't see what they would gain apart from creating general confusion for anyone not familiar with the area. Unless they're planning on saving on the cost of signs, uniforms etc - if it's come down to that then being taken over might not be such a bad thing. :2twocents

[clowboy]

Smurf,

While I have not aid that much attention to what is going on (mainly cuase I could care less) as far as I understand it, every store will not just be rebadged coles. You will still have seperate entities in the same way shell is still a seprate entity, only it is Coles express (Shell) or something a rather. So as I understand it it will be a case of naming kmart Coles discount variety or Coles kmart or something. The sale of myer is an obvious reason for the change from coles myer to simply coles, it also sits with there vision of mainstreaming things. The main algamtion of the businesses does not lie with the changing of the names but more with the sacking of staff. Currently each division is run in it's own entity with buyers for coles and buyers for kmart and so on. Each buyer does soley the same thing, buy bulk amounts of a product from a company, for example coke. Now there will be one buyer for coles as a whole. This also fits with there plans to update the DC chain. Where each company currently has several DC's per business per state they ultamately want to have one per state (well actually a couuple, north and south for example) thus reducing the number of dc's substaintially and minimising the repetion, IE more coke in less tin shed's. Currently each bussiness also recieves it's stock from it's DC and often one truck will serve two or more stores per delivery. That is to say it may drop off stock at one suburb, continue to the next, drop off some stock and then go back to the Dc and repeat the process. Meanwhile another three trucks are on route to the same center to drop off goods to one of the other three or four coles divsions. (kmart, taget , coles, liquirland etc etc). Eventually they plan to have it running so that one truck will serve each suburb so to speak, so instead of three to fours trucks droping stock at two or three suburbs one truck will drop stock at each divsion of coles within the suburb.

Hope that all makes sense, but as I say I don't pay that much attention to what they roll out as it doesn't really make much difference to my everyday life, just another headache to deal with until they fine tune it and get it right.

[Smurf1976]

That makes more sense. Hope you're right. :)

[bunyip]

Symetrical triangle?? What are the dates of the four points of the symetrical triangle?

Bunyip

Ignore the question above. I should have noticed that the post which referred to the triangle was made back in August 2004.

Bunyip

[scsl]

it seems improbable at first but it's likely that private equity players (if they want CML bad enough) willl offer high premiums to secure CML. using leverage, (i read that they use a company's own profits to fund the debt needed to take it over) these players have A LOT of money and confidence in themselves e.g. TPG recently refloated UK retailer Debenhams four years after buying it for what was then considered too expensive. It quadrupled its investment.

cheers,
scsl

[chansw]

Coles Confirms
August 23 2006 - Australasian Investment Review – (AIR)

http://www.aireview.com.au/index.php?act=view&catid=8&id=4329

We probably won’t hear any more from Coles on the ‘offer’ from the buyout group until it reports its 2006 profits next month.

While the board of Coles will now await a briefing and position papers from its advisers, the weights will be on the various buyout groups to detail their interest in the retailer.

We know Coles received an offer that required the company to virtually hand over the keys to the books and the boardroom, without any certainty of a firm, discloseable price.

That sounds absurd in Australia but appears to be commonplace in the US where shareholder rights are quite often asserted after the event through legal action, not during negotiations or a takeover.

The Coles share price will continue a slow easing it started yesterday when it eased 7c to $13.33. That will continue for the next few weeks or so with the occasional buffeting from rumours about offer prices and others being interested in a bid.

Coles is due to report its 2006 profits on September 21, so there’s every chance we won’t hear anything on this bid until then. It seems the logical time to detail further information, unless a firm offer is tabled before then, free of conditions and with a price.

It is clear the ‘offer’ from the buyout group led by KKR of the US, would have prevented the Coles board from trying to start an auction between the groups said to be interested. That would not have been in the best interests of shareholders

Here’s yesterday’s statement from the Coles board and a letter that the company’s 400,000 shareholders will be receiving later this week.

In it shareholders were warned that there might be some parties who would seek ‘to undermine’ Coles’ performance over the next few weeks.

………………

Coles Myer said today it had received on Friday a highly conditional proposal regarding the company’s ownership from a consortium of leveraged buyout funds.

CML Chairman Rick Allert said that the consortium stated it would only proceed with the proposal if it had the support of the Coles Myer Board.

Mr Allert said the Board had met today and appointed Carnegie Wylie & Company, Deutsche Bank and Freehills to advise it in its consideration of the proposal, to which the company would respond in due course.

"The Board will undertake proper consideration of the proposal and will not be pressured by market speculation to take actions which would not be in the best interests of shareholders," Mr Allert said.

"The Board remains confident that the company’s growth strategy will create significant value for shareholders," he said....................



Dear Shareholder
The Board received last Friday a highly conditional proposal regarding the company’s ownership from a consortium of leveraged buyout funds. The consortium stated that it would only proceed with its proposal if it had the support of the Coles Board.

The Board met today and appointed external advisers, Carnegie Wylie & Company, Deutsche Bank and Freehills, to assist us in considering this proposal. The company will respond to the proposal in due course.

The Board will undertake proper consideration of the proposal and will not be pressured by market speculation to take actions which would not be in the best interests of shareholders. It is likely that speculation will continue over the next few weeks, and it is possible that there will be some media coverage that will reflect the interests of parties who seek to undermine the company and its performance.

Against this background, I would like to outline some of the achievements of the past five years.

The facts are that between July, 2001 and 2006:

- underlying net profit after tax has more than doubled from $333 million to $785 million (subject to audit);

- return on investment has more than doubled from 11.7% to 24.1%;

- the value of your shares has risen by 90%, compared to the ASX top 200 companies at 49% and Woolworths at 71%; and

- We have returned more than $3.3 billion to shareholders through capital management initiatives and dividends.

During this period of turning around the company’s performance, we have also embarked upon a massive transformation of the way we buy and transport products from our suppliers through the distribution system and onto shelves in our stores.

This transformation will deliver a better shopping experience for our customers and is expected to realise financial benefits of $425 million a year in financial year 2008 and beyond.

As you know, the Board also took the decision recently to sell our Myer department store business, thus simplifying the Group and allowing greater financial and management focus on our less discretionary brands.

The price achieved for Myer of $1.4 billion was well beyond market expectations, and has provided significant funds for investment in the company’s future growth.

Most recently, our CEO John Fletcher has outlined our next strategic direction, centered on creating one integrated food, liquor, fuel and general merchandise business, meeting the everyday shopping needs of all Australians under the umbrella brand of Coles.

We are confident that our new vision will provide the company with market leadership, our customers with a great shopping experience and our shareholders with superior returns.

It is these opportunities for further growth that others, perhaps not surprisingly, now seek to take advantage of.

We will continue to keep shareholders informed of developments as they occur.

[Dr Stock]

Has anybody noticed the buying in Coles?

[tahpot]

Yeah it seems to be pretty consistently approaching the $14/$15 quoted as possible buy out prices.
If no buy out goes ahead be ready to short CML though....

[ghotib]

According to Crikey David Tweed is noticing CML. He's offering $7.50, but at least you avoid brokerage.

Cheers,

Ghoti

[Julia]

According to Crikey David Tweed is noticing CML. He's offering $7.50, but at least you avoid brokerage.

Cheers,

Ghoti

Ghoti,

Are you serious? $7.50 is only just over half the current SP. Is Tweed really that bad????

PS
Why aren't these posts on the Coles Myer thread?

Julia

[Realist]

$7.50 :eek:


where do I sign?



A fool and their money are soon parted.

[doctorj]

PS
Why aren't these posts on the Coles Myer thread?

Julia

Consider it done boss ;)

[ghotib]

Ghoti,

Are you serious? $7.50 is only just over half the current SP. Is Tweed really that bad????
From yesterday's Crikey:


David Tweed is at it again. I got a letter on Wednesday from Direct Share Purchasing Corporation Pty Ltd offering to buy my Coles share for a paltry $7.50 each. It's in a section called "Unsubstantiated tips and rumours" and it doesn't say who is the "I" who got the letter. OTOH, it's not an unusual Tweed offer. The Coles website has an undated notice to shareholders warning about an offer of $6.00 when the market price was $10.72.

Cheers

[chansw]

Coles rejects takeover offer
September 6, 2006 - 7:35PM

http://www.theage.com.au/news/business/coles-rejects-takeover-offer/2006/09/06/1157222187277.html

Coles Myer Ltd has rejected a takeover proposal from a group of private equity companies put to the retailer last month.

Australia's second biggest retailer said the consortium's indicative offer was $14.50 per share.

It said the offer undervalued the company, whose brands include Coles supermarkets, and Target and Kmart discount stores.

Chairman Rick Allert said the consortium's proposal was not in the best interests of shareholders.

He said it was non-binding, subjected to unspecified and open-ended diligence, provided no certainty on the availability of debt finance or the availability of the consortium's own equity finance.

''With such a conditional proposal, the consortium is effectively seeking a free option over the company,'' Mr Allert said.

He described the timing and indicative price offered by the consortium - which is headed by US group Kohlberg Kravis Roberts along with Blackstone Group, Bain Capital, The Carlyle Group, CVC Asia Pacific and Newbridge Capital - as highly opportunistic.

''Since its approach to the company, the consortium has merged with a potential rival, clearly indicating it seeks to acquire Coles Myer in an environment of the least competition and the lowest price,'' Mr Allert said.

''The board has no intention of handing across billions of dollars of value, that belongs to our shareholders, to a third party.''

[Julia]

Any opinions as to whether the offer will be increased?

Julia

[Julia]

Consider it done boss ;)

Doctorj

I didn't intend for it to sound like a demand. I'd never want to "boss" anyone!
(Quiet, retiring shy little thing that I am). It just seemed silly to have two threads about the same company. Thanks for fixing it.

Julia

[3 veiws of a secret]

Well all cashed up today,does anybody hold my optimism in this share falling back to $14 ????

[KaneX]

nah i dont reckon. A second takover bid on the cards around 15.50 a share I hear. You're always gonna knock'em back first for a better price the second time 'round.

[scsl]

nah i dont reckon. A second takover bid on the cards around 15.50 a share I hear. You're always gonna knock'em back first for a better price the second time 'round.
I agree, the next offer shouldn't be too far off. And with news of a second group of private equity players, there could be a bidding war.

The restructure plan and profit forecast released by CML may be ambitious and hard to top, but private equity groups are extremely efficient and keen to see their investment succeed. The fact that the owners have a lot of their money at stake will see possibly even more job cuts and tighter cost controls.

I've read that the KKR group might even decide to go hostile. What would happen in this situation?

[3 veiws of a secret]

Well I'm a little shell shocked today ....WHAT happened to CML somebody must of dumped some shares @ $ 13.75 ,because I picked up an order @ $13.99 and sold in minutes. I'm more then suprised why or who dumped this share @ $13.75 ,when the trading was basically around $14.25>$14.10 ..........I do get cynical when somebody knows more then they are letting up. Or did somebody panic when reading his stop loss guide book?
Mind you I was focused on other shares at the time ,and things do go bump and dump sometimes,when I'm not looking. :pc:

[alankew]

Any ideas on what happened with Coles today,trading at 14.15 ish then closed at 14.50

[alankew]

No one any ideas on coles :confused:

[Julia]

Any ideas on what happened with Coles today,trading at 14.15 ish then closed at 14.50

I read a suggestion yesterday, not sure but it might have been in FNArena, that it would be unreasonable to think that KKR would just fade away following their initial bid being rejected by Coles.

The spike upwards in CML's SP occurred when they looked like being a take over target, then the price gradually slipped when it looked as though nothing would happen after all.

There may be no connection, but the suggestion above may have had the effect of reigniting interest in the stock.

Julia

[alankew]

Seems reasonable Julia except that the price has gone subsatntially lower today

[alankew]

Looks like I am talking to myself.Just want some opinions on what could happen with Coles now.The buyout consortium have made a last offer of $15.25 but Coles have till the 21st October i think to say yes or no but do big shareholders get any say in whether this offer is reasonable or not-I am not one of the big shareholders by the way :( .Lets have your thoughts

[alankew]

Correction they have now withdrawn their offer so where to from here

[scsl]

Correction they have now withdrawn their offer so where to from here
Seeing as CML didn't finish near its low for the day, this could perhaps suggest that not all in the market have given up? :confused: I still think CML will eventually fall to a private equity group.

[3 veiws of a secret]

I feeling pretty pig sick this afternoon....I saw the long awaited tumble on my screen from 13.25>12.92 very late trading .But just could not crunch the order in before it spiked up to 13 bucks, then onto 13.20!! Anyway missed my opportunity,but what a day for day trading in this stock. Not sure where this one will fly tomorrow,but rest assured it has a high probabilty of volatility .
I stand to be corrected but there are other players circulating for CML ,if so can they offer $15.25+ ?????

PS have a look at the portfolio crossing of $72K @$14.50 what a buy! ,if only if the guy realised it would fall to $13.20

[alankew]

Lets hope someone else does come in.I have been in and out and made reasonable money but was holding out for the takeover :eek:

[robots]

hello,

fletcher and board will have to come up with some incentive to hold this stock in the future

prior to speculation was at around 11.50 and they have just knocked back 15.45, they would want to have something up their sleeve

being advised by carnegie & wyle, so hope their right

supacentre's - where abouts, they have just cleared out Megamart

thankyou
robots

[YELNATS]

It will be some time before CML's price exceeds $15.25 I would think. Regards YN.

[Julia]

Seems reasonable Julia except that the price has gone subsatntially lower today

You answered your own question two posts down - withdrawal of the offer.

Julia

[alankew]

Anyone gpt any thoughts or news/gossip as to why coles has been going up lately.I know they have a trading update coming up soon but is it possible that someone else is looking to takeover coles?Still holding after dipping in and out and finally getting caught out with the failed takeover

[scsl]

Anyone gpt any thoughts or news/gossip as to why coles has been going up lately.I know they have a trading update coming up soon but is it possible that someone else is looking to takeover coles?Still holding after dipping in and out and finally getting caught out with the failed takeover
It's interesting huh... KKR have withdrawn their bid and the sp is still up about 30% on the pre-takeover sp. It's definately being propped up by lingering takeover speculation amongst the institutional investors and hedge funds.

Alan, I also got caught out with the fall after KKR withdrew. I got out a few days after the big drop, at $13.60, and am still on the sidelines.

[Bongo_Boy]

If the take over news fades the price might drop back and present a good buying opportunity. :sly:

[alankew]

As long as it doesnt fad before i get out!

[alankew]

Coles have had a bit of a run the last few weeks,anyone any idea whats behind it.Perhaps good sales figures leading up to Christmas or hopefully(still holding at a higher price)another takeover offer

[alankew]

Quick look at a chart with my untrained eye and it seems as though it may have broken out of its recent trading range.Anyone care to comment or are you all Woollies shoppers

[scsl]

Coles have had a bit of a run the last few weeks,anyone any idea whats behind it.Perhaps good sales figures leading up to Christmas or hopefully(still holding at a higher price)another takeover offer
Another takeover bid is not out of the question, whether it be from KKR again (despite management wanting nothing to do with Coles anymore) or another private equity consortium. IMO, recent sp action is indicative of this.

[alankew]

Any reason for the recent strength of coles(particularly today)I would imagine a Christmas trading statement could be out soon or is it possible that takever talk is being revitalised.SP almost back to levels prior to KKR offer

[alankew]

Talking to myself again.Chart posted below hopefully

[alankew]

Sorry forgot to add that it looks to have broken out of recent trading range but not sure if it is outstanding

[justjohn]

Quick look at a chart with my untrained eye and it seems as though it may have broken out of its recent trading range.Anyone care to comment or are you all Woollies shoppers
I work for WOW does that count :p: :D

[alankew]

John you can work for whoever as long as you shop at Coles!

[kennas]

Hi Alan,

Still holding this? I think the code needs to change to CGJ - will sort that out.

Chart wise, yes, $14.00 clear support IMO and generally heading up over the past year. This double top at $14.80 ish is a concern though. MACD just turned bearish.

Not sure how this will fair with a correction (which I think is due) but probably OK, being a consumer staple.

I actually prefer WOW (owned it previously and will again after the market settles a bit)

[alankew]

Kennas still holding,I think there is a trading update or results due soon and with the talk of a takeover resurfacing will continue to hold.Weak numbers are expected to encourage a bid and likewise good numbers will go someway to proving that management were correct to reject original bid-a win win situation!(cant find the fingers crossed smilie)Thanks for the chart.

[Joe Blow]

CML - Coles Myer has changed both its ASX code and name to CGJ - Coles Group.

This thread is now being closed.

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