Will Rakon be sent to the naughty corner?
Big if true
Rakon Rakon Rakon
Big story here from Rebecca — “sources” allege that Rakon’s NBIO was withdrawn weeks before the company announced to market the deal was off. Link. As we always say — big if true! As we all know, companies that are listed have a continuous disclosure obligation. If the independent committee knew the bid was off and took multiple weeks to inform the market (and Rakon’s shareholders and owners!) of this, then they’re in a very serious breach of continuous disclosure (FMC Act, 270 (1).
If NZ RegCo finds issue here then the failure to disclosure should sit squarely on the shoulders of the independent committee members — Keith Oliver, Sinead Horgan, Keith Watson and Lorraine Witten. I find it absolutely incredible Rakon’s continued lack of detail or explanation re the NBIO — the company has not once bothered to explain to its owners, its shareholders, why a company thinks it is worth $1.70 (almost a 100% premium to today’s price).
Questions will be asked at the ASM — on Weds (I wrote Tues the other day; mea culpa).
Annals of stupidity —
For some reason there have been a number of things that make me scratch my head recently — I call this the Annals of Stupidity. It seems every day the Luxon/Seymour/Winston “three headed Taniwha” has some kind of gaffe, while it appears that company directors and CEOs (see below) view the rest of NZ with contempt. Stupid indeed. Let’s crack on.
Seymour’s “Special magic red tape cutting ministry” is three times the size of the ministry it replaced.
The new ministry has three deputy chief executives earning up to $350,000. Five staff are on between $196,000 and $257,000 a year.
Seven managers, a head of ministerial services and a “head of people and operations” will be paid up to $224,313.
The salary of chief executive Gráinne Moss was not disclosed.
Yes, it is clearly completely efficient to have three deputy CEOs.
ANZ CEO — “NZ can’t afford to own a big bank”
The head of ANZ says the big banks can't afford to be New Zealand owned and have to make profits to keep their overseas shareholders happy.
You may remember when we were a colony, and we had to keep Mother Britain happy. Is it like that? We have to keep the overseas shareholders happy, you guys!! We don’t want to upset them!
How dumb and subservient does Antonia Watson think New Zealanders are? Does she think that we say a silent prayer to the banks as we pay rip-off payWave charges? Frankly, the contempt she displays for NZers is gross.
RMac has a good solution to the Aussie bank monopoly (why do we insist on saying “Foreign” when they are, in fact, all Aussies) — give every kid a KiwiBank account at school! Link.
I am all for capitalising KiwiBank more — Am sure Super Fund, ACC etc would gladly pass around the hat and put some dollars into this. It makes eminently more sense to retain profits made by our banks within the country rather than ship them off overseas.
Synlait cap raise was “logical and reasonable” says Synlait Chair George Adams, of the recent cap raise which diluted retail shareholders from 41.2% down to 14.9%. Presumably George Adams can tell us that global warming is good actually, too. How can listed companies expect to be supported by retail shareholders when they happily do the dirty on “mum and dad” investors? (This goes back to my perennial point about the dying NZX: if retail gets screwed over and over — My Food Bag, Synlait, etc — they will simply invest elsewhere).
NZ
FBU — Bad set of results as anticipated. Wah wah. $227mn loss. Sale of Tradelink business $141mn loss. Stock has moved on the result but perhaps the worst is past. Maybe.
EBOS — NPAT up +7.7%, while return on capital employed (more companies should use this metric) is 15.3%. Strong and steady across all divisions. John is such a great CEO — there’s a man who knows his numbers. Just look at the consistency below. Thing of beauty:
Sky TV — Lowest number of users in five years (939,000). It is “cheap” but it is a “melting ice cube” but likely will produce $50mn or so of free cash flow so long as those all-important sporting rights are retained. I know it’s such a boomer stock but — you know — it produces some cash.
The Bronfman / Shari / Ellison playoff
Our favourite failson, Edgar Bronfman, is back, baby, and he has another offer for Paramount (readers of this publication will recall that the Paramount sale talks have been going on for presumably 100 years now). $6bn is the offer. That’s an additional 1.7bn from the Bronman’s previous offer, and some of that is earmarked to buy back Class B pleb shares at $16 a pop. Remember that Ellison is willing to buy up to $4.5bn’s worth of Class B pleb stock (roughly half the issued stock count). That’s still better for long suffering class B holders (i.e. Mario Gabelli) than a Bronfman proposition, which would leave plenty of class B stock on issue — investors would get roughly 1 share bought back at $16 for every four shares they own (i.e there’s very little arbitrage to be done here).
An Ellison buyout nets you some of your money back, presuming you invested at this late stage and not when the stock traded at much higher levels (i.e. I could go to market, buy a bunch of Paramount class B stock, say 1,000 shares at $11.00. I’d spend $11,000 on this exercise and receive $8,000 back from Ellison upon his purchase of half the class B float. My “cost” for the remaining class B shares I own — 500 — would be $7.00 per share, or a 36% discount to the $11.00 share price).
As I said, this all presumes you bought Paramount stock at price closer to where it trades today. If you bought it in 2021 at $29 a share or so, you’re underwater.
I’m not sure what will happen here. I suspect Larry Ellison will write a bigger cheque. Isn’t that what every boy wants for his 16th birthday? A legacy media company? Naturally.