On several websites like MSN Money, Forbes and Reuters we can read that Staples has been upgraded to "buy" from "hold" by Jefferies & Co. analyst Daniel Binder, with a price target of $28. It seems the recommendation is mainly based on the possible acquisition of CE, which could add $0.60 to earnings per share. Mr. Binder joins us in speculation about the final price and he believes the price may have to be raised to EUR 8.50. Let's do some math:
Currently Staples has about 701.7 million shares outstanding, so an increase of $0.60 would be an increased net result of $421 million, or EUR 270 million. Since CE had a net income of EUR 178 million in 2007, which included a gain of EUR 106 million from discontinued operations, Mr. Binder sees a synergy effect of almost EUR 200 million. This translates in a synergy effect of EUR 1.09 per CE share! Including the results from continuing operations, Staples would be buying an additional net result of EUR 1.48 per CE share. Of course they would argue that they are creating a big chunk of this value. If my interpretation of Mr. Binders' assumptions are correct, buying CE for a price of EUR 8.50 would be an extraordinary bargain for Staples, certainly given the P/E ratio of almost 17 that Staples is currently trading at.
I have done the math quite quickly, so please correct me if I am wrong. Otherwise I assume that either Mr. Binder is very optimistic about the synergy effects of this deal, or otherwise Staples is trying to keep a lot of value for themselves.
woensdag 14 mei 2008
Analyst upgrades Staples
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Ff wat bij elkaar vegen:
Staples expects that its offer for all the outstanding shares would include a minimum acceptance condition of 75 percent of the ordinary share capital. In addition, Staples confirms that it expects to make an offer for both the Corporate Express depositary receipt of preference shares A and the two percent subordinated convertible bonds due 2010 issued by Corporate Express. (laatste biedingsbericht)
Maar nog steeds geen biedingen op de laatsten gezien, of denken ze er met de in de statuten vermelde bedragen (bij faillissement bijv. hebben de prefs voorrang en krijgen per pref € 3,40355) met een koopje vanaf te komen?
Stichting Administratiekantoor van Preferente Aandelen
Corporate Express holds 53.3 million Preference Shares A.
The voting power on these is related to the economic
value per the end of the month before any General
Meeting of Shareholders will be hosted. Based on the
current total share capital outstanding the Preference
Shares A represent up to a maximum of about 22.56%
voting interest in Corporate Express NV. (jaarverslag 2007)
Kortom: de 183 miljoen gewone aandelen vertegenwoordigen 77,44 % van de stemmen op een aandeelhoudersvergadering; de voor-een-dubbeltje-op-de-1e-rang-yanks willen minstens 75 % van de gewone aandelen. Daarmee hebben ze dan een stemrecht van 0,75 * 77.44 = 58 % binnen gehaald…. Kun je dan een hele onderneming van de beurs halen?!
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