Good morning! The takeover bids are coming thick and fast this week. Yesterday we had one of my favourite stocks, Kentz announce a potential takeover bid, with the shares now 50% above the price they were flagged here (no less than three times!) as being good value, on 3 May, 17 May, and 26 Jun. Also, as "nswier" pointed out in comment 8 of 17 after yesterday's report;
On Kentz, chalk up another result for Stockopedia's own screen of screens. It has been near the top of that screen for a good few months now.
Well, it gets better, as we've had another takeover bid today! This time on Fiberweb (LON:FWEB). I spotted what good value the shares were at 75.5p on 2 Aug, and devoted most of that day's report to reviewing the company's interim results, concluding that;
"I think this looks an attractively-priced share with good value characteristics, of a healthy dividend yield, reasonable PER, and a strong Balance Sheet. It probably won't shoot the lights out, as it looks a mature, and fairly boring business, but should benefit from the economic cycle improving in its main markets."
This morning Fiberweb announce that Polymer Group Inc. is close to tabling a 97.5p cash bid for them, with shareholders also receiving the 1.2p interim dividend on top. I think that's a fairly tight offer, as the shares look worth about 100p just putting it on a reasonable PER. 100p translates into 15.9 times 2013 forecast earnings, and 13.5 times 2014 consensus forecast earnings.
So it's certainly not generous, and I reckon there's a chance that a higher competing offer could come along, so personally I am minded to hold my shares, as they are bound to be marked up today to around the 97.5p level. Although Fiberweb's Board say they would recommend the offer to shareholders if it is formally made (it's only a potential offer at the moment), which surprises me, as I would prefer management to seek the highest possible bid for the company, rather than recommending the first, not very generous offer that comes along.
On the other hand, "a bird in the hand", and all that. So I reserve my right to change my mind on this, and might decide to…
