Good morning!

There are not any backlog things for me to write about, so this article will appear blank for the morning - so subscribers can add comments as usual.

Managing expectations - the main body of this article will appear during Friday afternoon, section by section, and will be done by 6pm. If that changes, I'll update this introduction accordingly.  I'm sorry if it annoys people that I haven't finished each article by 1pm, but that's just how it is.  I'd rather take my time, and write something worth reading, with some thought having gone into it, than rushing for deadlines.

Thanks for bearing with me. You now have my undivided attention for the rest of the day.

Update at 16:40 - today's report is now complete.

Sanderson (LON:SND)

Share price: 140p
No. shares: 60.5m
Market cap: £84.7m

Takeover bid update

In my view, this bid undervalues the company, and was at an insufficient premium. Although the share price did have a nice run upwards in the months before the bid.

Today the bidder, Aptean, says it has got irrevocable undertakings and letters of intent over 49% of the company's shares. That seems a bit lacklustre, clearly some shareholders are not impressed with the 140p offer. So it's not necessarily a done deal yet.

Why did management recommend a bid at such a modest premium? The deal might be driven by institutions wanting an exit? (as it's too illiquid to allow Instis to sell  in the market). A city contact told me this week that small cap fund managers are worrying about liquidity, after the Woodford fiasco, nobody else wants to get caught out holding lots of illiquid stocks, whilst facing client redemptions. That's an interesting point, and sounds plausible to me.

The risk is that, if the bid falls through, then the share price could tank back down to 100p maybe.

My own experience of takeover bids is usually very good, I've had lots of them over the years, including once amazingly, when I had three on the same day! Wish I could remember the details of what they were, but I definitely didn't imagine it.

Then there was the debacle with Revolution Bars (LON:RBG) (in which I hold a long position) where a (with hindsight, generous)…

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