Derek Pain: A takeover bid for struggling SnackTime would be a relief
Saturday 01 February 2014
The no pain, no gain portfolio continues to generate corporate action with two more trading updates, news of an important deal and even a possible takeover.
The signalled bid involves SnackTime which has the painful distinction of eroding most of the £5,000 the portfolio invested. The vending-machine group is the subject of what is described as "a preliminary approach". I have several times eluded to the possibility of a strike as a Russian billionaire has carefully built a stake without disturbing the share price too much. However, I should point out that a successful bid will do little to improve the portfolio's cash pot. It paid 119p and as I write the price is near 19p (after about 4p last year). I would imagine any bid would be in the region of 25p.
Not surprisingly the Russian, Boris Belotserkovsky, is involved in the possible take over. He runs Uvenco, Russia's biggest vending operation that also has considerable interests in eastern Europe. He has teamed up with Blair Jenkins, who founded SnackTime and was chief executive until May, 2012. They formed Uvenco UK to develop interests in this country.
It is Uvenco UK that is the bid vehicle. It does not appear to have any SnackTime shares but Mr Belotserkovsky has 8.97 per cent and Mr Jenkins 2.13 per cent.
The collapse in SnackTime shares – they once approached 200p – illustrates that the company has fallen on hard times. Losses have piled up and as internet tipster T1ps.com mentions earnings could remain negative for at least two years.
There can be no certainty a bid will develop, but a reasonable offer would be a relief to shareholders. Another possibility is that Uvenco assumes control, say 51 per cent, but retains the share quote.
There are a number of major shareholders, including Vendia with nearly 30 per cent and investment group Elderstreet with 12.8 per cent. Just how they will treat the approach remains to be seen.
With no early signs of any significant recovery they may also welcome an agreed exit.
Constituents with trading details were brewer and pub owner Marston's, and home-shopping and education supplies group Findel.
Marston's cheerfully rolled out details of happy festive times including 55,000 meals served on Christmas Day. Its pub formats increased sales, and although the brewing operations experienced a modest volume fall profits were actually higher. The group's shares, at 147p, have been a little sluggish lately; the portfolio paid 95p.
Findel reported a 3.8 per cent sales advance in a 16-week period and added that so far this year they were 4.6 per cent up. The shares have topped 300p since the statement.
Avation, the aircraft leaser, has fixed up another seemingly rewarding arrangement. Chairman Jeff Chatfield has been particularly active agreeing a succession of deals that have helped lift the shares to a 151.5p high. The latest link involves four Fokker aircraft that are flying under the auspices of what is described as a leading Australian airline. The leases, expiring this year, have been extended for 36 months.
It is the second deal this year, coming after a new standby credit worth up to £5.8m. Other statements in recent times include expanding the group's fleet, at least one aircraft sale and a forecast that last year's revenue should be "significantly ahead" of the previous year.
It is, perhaps, not surprising that the shares are now flying high, a performance which contrasts to last year when the price fell to around 60p.
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