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Problem is that Fraser Group have sold 15k shares recently, and the price appears to have dipped also to allow an institutional investor to buy @ £2.60 ish in the past couple of days.
Once the IIs have finished loading up, I believe this will rise up to new highs.
The old adage “buy on rumour, sell on news” appears to apply here as the share price has now dropped back below the pre half year results level. So far, not as much interest in the company as Mr Ashley surmised.
Admittedly small volume today (it is Friday) but there were 6 times as many buys than sells, which I believe bodes well for next week!
True! I wonder if it is because the market wonders whether we're controlled by Mike Ashley but actually the Fraser Group results stated the following re their stake in Studio Retail Group:
"Control And Significant Influence Over Certain Entities
Under IAS 28 Investments in Associates and Joint Ventures, if an entity holds 20% or more of the voting power of the investee, it is presumed that the entity has significant influence, unless it can clearly demonstrate that this is not the case. The Group holds greater than 20% of the voting rights of Studio Retail Group Plc and French Connection Group Plc, whereby management consider that the Group does not have significant influence over these entities for combinations of the following reasons:
• The Group does not have any representation on the board of directors of the investee other than a Frasers Group representative having an observer role on the board of Studio Retail Group Plc. Management have reviewed the terms of the observer arrangement and have concluded that this does not give them the right to participate in or influence the financial or operating decisions of Studio Retail Group Plc. Studio Retail Group Plc can terminate this arrangement at any time, and can determine which parts of the board meetings the representative can be present at and what information they are given access to;
• There is no participation in decision making and strategic processes, including participation in decisions about dividends or other distributions;
• There have been no material transactions between the entity and its investee companies;
• There has been no interchange of managerial personnel;
• No non-public essential technical management information is provided to the investee.
In assessing the level of control that management have over certain entities, management will consider the various aspects that allow management to influence decision making. This includes the level of share ownership, board membership, the level of investment and funding and the ability of the Group to influence operational and strategic decisions and effect its returns through the exercise of such influence."
Frasers RNS today and the resulting rise in SP versus ours.
‘Misunderstood’ actually sums it up pretty well.
I agree in part Skindle.
I think his 37% presence has deterred investment in the past and indeed possible predator interest.
In setting a formal process in motion with the significant backing of Schroeder’s, I am hopeful that true value will finally be unlocked. I don’t believe MA will want to frustrate the process as STU just doesn’t fit his future vision and he would far rather realise the cash to put to use elsewhere.
I would anticipate some leak to the press or even an RNS in the next few weeks outlining what sort of strength of interest has been shown in order to get pencils sharpened as the process moves to the next stage.
On reflection, I also think it’s in the interests of maximising the exit price by keeping the current SP where it is to entice ore players in. II activity after the announcement would suggest they believe this is going to happen and a good uplift in SP, likely.
Morning Ejackson, your Freudian slip may be closer to the truth. Mr Ashley’s very presence as a large shareholder of Studio makes this company almost uninvestable in many peoples eyes. Witness the general lack of interest since the company put itself up for sale. Still, it’s early days, let’s hope for an uplift in the coming weeks.
It's clear Shroders have increased their stake as well. Now owning 20.6% of the company.
Hargreave Hale now own 4.338% of the company.
M&G have also have 1.15% of the company.
In total that's 26% with Instituional Investors who seem to be increasing their stakes here.
Wonder what they know what we don't ...
Happy days. That explains some of the £1,500,000+ of buying in large quantities we saw yesterday!
Blinking predictive text.....unfathomable not unfashionable
Good evening Libero.
All I can say is welcome to the highly frustrating world of STU share ownership.
I have been at a loss as to why the market has not responded more positively in the past on occasions but this time around, it’s simply unfashionable.
With regards to your question on expecting a better reaction without the strategic review, again, I am confounded as it can only be a positive in terms of realising shareholder value, so why only 5% uplift?
We have traded in the low £3’s in a lot worse times so today’s SP is a total disconnect. I can only hope multiple bidders come forward and recognise this and the future opportunity to create substantial value that is being served up on a plate. I suspect foreign interest could be strong with the pound so weak.
Ejackson,
I'm new here and cannot understand why the market has not reacted more positively to what is clearly excellent results.
Out of interest, do you think it would've been more positive had the "Strategic Review" news was not announced alongside it? Is that what you feel the market dislikes, and if so why?
I'm inclined to agree with you that Mike Ashley is not interesting in increasing his stake in STU from the 37.5% he already owns, and may actually be looking to sell his stake FOR THE RIGHT PRICE, in order to reinvest it in some distressed bricks & mortar business instead.
Either way it's positive news because if he's never going to accept an offer even remotely close to the current share price, it will need to considerably higher than this. 30-40% higher from this level I reckon.
Curious to hear your thoughts.
Wow there's been some HUGE late-reported buys reported after hours.
Together with the large buys reported during the day it totals £1,500,000 !
08-Dec-20 08:26:00 292.50 100,000 Buy* 276.00 282.00 £292.50k O
08-Dec-20 08:25:55 291.05 100,000 Buy* 276.00 282.00 £291.05k O
08-Dec-20 08:32:01 291.00 100,000 Buy* 276.00 282.00 £291.00k O
08-Dec-20 08:22:20 291.25 50,000 Buy* 276.00 282.00 £145.63k O
08-Dec-20 08:31:46 292.00 100,000 Buy* 276.00 282.00 £292.00k O
...my earlier post ‘The Future’
I never thought I would find myself agreeing with MA, however, today just underscores the markets view on SRG.
Great results, putting the company up for sale with the consent of our two largest shareholders and our SP moves, wait for it, 5%.
An absurd reaction.
I now look forward to seeing how this plays out and the value bidders will attach to the company but more importantly, how MA values it as he has the firmest of grips on the role of Kingmaker in this process. The protracted sale of Newcastle United may give us an insight as to what lies ahead although by a strange quirk of circumstance, MA and I find ourselves on the same side. This does assume that he isn’t interested in buying the company himself but given he could have done so previously for a lot less money, I don’t believe it’s something he wants in his portfolio.His obsession is with distressed companies that have bricks and mortar and we just don’t fit that template.
As for my own thoughts on value, I would like to align my opinion with previous RNS’s released by the company trumpeting Edison’s coverage.
Only time will tell but here’s hoping Stifel receive a number of bids and build up a good head of competitive steam.
08-Dec-20 09:53:30 287.50 30,000 Buy* 281.00 292.00 86.25k
08-Dec-20 10:24:19 291.10 10,000 Buy* 285.00 292.00 29.11k
That's over £180k in large buys today I've seen so far :)
Looks like someone might be loading up
08-Dec-20 10:49:45 289.00 3,830 Buy* 280.00 290.00 11.07k A
08-Dec-20 10:49:32 288.9999 3,612 Buy* 280.00 289.00 10.44k
Overall, there's certainly far more shares being bought than being sold.
Wish I could say it was mine!
08-Dec-20 08:17:40 299.1288 15,000 Buy* 291.00 296.00 44.87k
Agreed Libero, this company has been repairing itself for several years now and this could be the final part of the repair job. You can never trust Mr Ashley but at the moment this move looks to be positive for all shareholders, not just himself.
He tried to take the business over in March 2019 for 161 pence so a word of caution. We have to put our full trust in the current board who successfully fended off his hostile bid back then.
Or to help sell it for a significant premium to where it is now of course.
Either way, it looks as though this is due to rise much higher than where it is now. It's great to be in a share that's both undervalued, growing fast, and a takeover target.
If it continues growing the way it has in the 6 months to late September, and I cannot see why it would not, I reckon this could be sold for 40% higher than where this is currently.
DYOR & GLA : )
suggesting that he's willing to takeover the company for a significant premium to the current market valuation.
https://www.business-live.co.uk/economic-development/studio-retail-group-up-sale-19418005
Assuming H1 x 2 = FY, this is trading on a P/E and EV/EBIT ratio close to 10. Which is excellent value for a company who have tripled their profits this year. So I've decided to buy a few this morning, and am happy to have joined the party : )
A brilliant set of half year figures, and finally rewarded by Frasers making a move that could actually benefit fellow shareholders. Patient shareholders will finally receive full value for their holding. Good luck to all holders, enjoy the ride up.
Certainly the Lombard Odier holding is an interesting new development. These funds don’t buy in unless they are certain of an uplift in the share price. Fingers crossed.
It seems that lose have posted my first message despite it not showing up originally....
Same sentiment just put differently after a coffee!
The following extract taken from today’s RNS:
In light of this, the Board will be assessing all options with a view to maximising value for its stakeholders and will provide an update on next steps at the interim results on the 8th December.
So, this could be read that it is singular to the Education division or possibly a wider and full strategic revue for the whole company.
Not too difficult to understand given the lacklustre SP and excellent current trading. Furthermore, our largest shareholder might be agitating for action too particularly given how he pushed for the disposal.
Lombard increasing albeit a small amount and the SP moving positively despite the negative news all leads me to thinking there maybe something afoot.