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News of a takeover bid from TDG's largest shareholder, active value investor Laxey Partners, led to a sharp rise in the the group's share price, overshadowing results that were in line with expectations.
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Shares in the logistics group surged 15 per cent to 260p on news that Laxey had made an indicative 275p a share cash offer for the group, valuing it at £222.6m. The offer includes the 8.75p a share final dividend and is at a 21 per cent premium to the level at which TDG's shares were trading prior to the bid announcement. Laxey is TDG's biggest shareholder with around 22 per cent of the group's stock, so analysts at Dresdner Kleinwort believe a counter bid is unlikely.
On the results, TDG chief executive David Garman says the group's strategy to focus on strengthening its position in specialised sectors of the contract logistics, freight forwarding and supply chain management markets has paid off with improved quality of earnings. Growth was particularly strong in the chemicals division, boosted by the acquisition of Spanish business Doman last year. Contract logistics also did well given challenging market conditions, said Mr Garman.
Dresdner expects profit before tax to rise to £16.5m in 2008 (2007: £15.9m), with EPS of 14.6p (13.9p).
TDG (TDG) |
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|---|---|---|---|---|
| ORD PRICE: | 260p | MARKET VALUE: | £211m | |
| TOUCH: | 259-260p | 12-MONTH HIGH: | 319p | LOW: 179p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 211p* | NET DEBT: | 12% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2004 | 507 | -1.3 | -4.9 | 14 |
| 2005 | 511 | 8.1 | 7.5 | 14 |
| 2006 | 531 | 15.2 | 15.4 | 14 |
| 2007 | 670 | 15.8 | 17.5 | 14 |
| % change | +26 | +4 | +14 | - |
Ex-div: 23 Apr Payment: 23 May *Includes intangible assets of £42m, or 52p a share. |
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Laxey's offer comes as the new strategy at TDG begins to take shape. Investors should sit tight until a formal offer is made.
Last IC View: Good value, 266p, 3 Aug 2007.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
