1 00:00:00,240 --> 00:00:02,720 Speaker 1: Now the takeover bid for the Warehouse Group that's been 2 00:00:02,759 --> 00:00:05,920 Speaker 1: backed by Sir Stephen Tindall has made its pitch. Adamanton 3 00:00:06,120 --> 00:00:08,799 Speaker 1: Capital has offered to buy the business for one dollar 4 00:00:08,840 --> 00:00:11,399 Speaker 1: fifty to one dollars seventy a share, which values that 5 00:00:11,480 --> 00:00:14,280 Speaker 1: at about five hundred ninety million dollars in total. If 6 00:00:14,320 --> 00:00:16,599 Speaker 1: the deal goes through, the Warehouse will be fully owned 7 00:00:16,600 --> 00:00:18,560 Speaker 1: by a new entity that Sir Stephen will then own. 8 00:00:18,600 --> 00:00:21,680 Speaker 1: Fifty percent of existing shareholders will be bought out for cash. 9 00:00:21,720 --> 00:00:23,560 Speaker 1: Greg Smith is the head of Retail at Devon Funds 10 00:00:23,560 --> 00:00:26,400 Speaker 1: Management Hay Grey good Eving headers it's good value for 11 00:00:26,400 --> 00:00:27,120 Speaker 1: the shareholders. 12 00:00:27,880 --> 00:00:30,680 Speaker 2: Oh, I think it looks as well for perhaps Stephen Tindall. 13 00:00:30,720 --> 00:00:32,760 Speaker 2: But yeah, it looks quite opportunistic. I mean when you 14 00:00:32,800 --> 00:00:34,560 Speaker 2: think about it, you know the Warehouse has struggled like 15 00:00:34,560 --> 00:00:37,760 Speaker 2: a lot of retailers, which includes Noel Leaming, becauseting pressures. 16 00:00:37,760 --> 00:00:40,559 Speaker 2: You've seen increased competition with Team, but they've also had 17 00:00:40,600 --> 00:00:42,239 Speaker 2: problems of their own making we've talked about on this 18 00:00:42,320 --> 00:00:45,720 Speaker 2: program and to their strategic positioning. You know, they've lost 19 00:00:45,720 --> 00:00:49,239 Speaker 2: this sort of identity or proposition with customers and they've 20 00:00:49,280 --> 00:00:52,159 Speaker 2: got involved in peripheral businesses like Torpedo seven in the 21 00:00:52,159 --> 00:00:54,560 Speaker 2: marketplace which have since got rid of so oh plus 22 00:00:54,640 --> 00:00:56,720 Speaker 2: even't got a CEO. So yeah, it does seem to 23 00:00:56,720 --> 00:01:00,400 Speaker 2: be quite opportunistic particalarly if you've got perhaps a light 24 00:01:00,440 --> 00:01:02,200 Speaker 2: you know, for the retail sector, if we do get 25 00:01:02,240 --> 00:01:04,720 Speaker 2: that sort of rate cup from AURBNZ in a few 26 00:01:04,720 --> 00:01:06,319 Speaker 2: months time with inflation for. 27 00:01:06,360 --> 00:01:08,680 Speaker 1: Them, Yeah, so what do you reckon? The shareholders may 28 00:01:08,680 --> 00:01:10,360 Speaker 1: be better off to actually hold on to their shares 29 00:01:10,360 --> 00:01:11,679 Speaker 1: and wait for things to bounce back. 30 00:01:12,360 --> 00:01:14,319 Speaker 2: Well, we've got to see what the independent directors come 31 00:01:14,360 --> 00:01:16,680 Speaker 2: back with and in terms of you know that they'll 32 00:01:16,680 --> 00:01:19,200 Speaker 2: get help with the assessment of value and that may 33 00:01:19,280 --> 00:01:22,040 Speaker 2: leave scope for you know, a revised off. Obviously, it's 34 00:01:22,080 --> 00:01:24,520 Speaker 2: a range at the moment of a dollar fifty to 35 00:01:24,640 --> 00:01:28,759 Speaker 2: a dollar seventy. It does require seventy five percent approval 36 00:01:29,240 --> 00:01:31,040 Speaker 2: and obviously the board will sort of give their view 37 00:01:31,040 --> 00:01:35,120 Speaker 2: on it. And obviously Stephen Tindall and his interests are 38 00:01:35,160 --> 00:01:37,280 Speaker 2: not part of that seventy five percent, So I think 39 00:01:37,280 --> 00:01:39,280 Speaker 2: it's probably stay put for now. You know, the shares 40 00:01:39,319 --> 00:01:42,039 Speaker 2: have rallied from ninety cents to around about a dollar 41 00:01:42,120 --> 00:01:44,640 Speaker 2: forty today, but if you look at that top end 42 00:01:44,640 --> 00:01:47,120 Speaker 2: of the offer of a dollar seventy, you know, that 43 00:01:47,240 --> 00:01:49,800 Speaker 2: was where the shares were just back in December, So 44 00:01:50,720 --> 00:01:52,680 Speaker 2: you'd have to think, you know, it feels it we're 45 00:01:52,680 --> 00:01:55,800 Speaker 2: sort of at or near the bottom. Obviously. Yes, Steven's 46 00:01:55,800 --> 00:01:58,120 Speaker 2: got some ideas about what he wants to do with 47 00:01:58,120 --> 00:02:01,080 Speaker 2: the company going forward. Perhaps one of those is a 48 00:02:01,080 --> 00:02:03,240 Speaker 2: further push into groceries. I mean, it seems to be 49 00:02:03,480 --> 00:02:05,520 Speaker 2: an area that they're doing quite well at the moment. 50 00:02:06,040 --> 00:02:08,160 Speaker 2: You would think regular as in the government would be 51 00:02:08,160 --> 00:02:10,880 Speaker 2: receptive to a third player and they've certainly got the 52 00:02:10,919 --> 00:02:12,239 Speaker 2: site footprint to roll that out. 53 00:02:12,480 --> 00:02:13,760 Speaker 1: Yeah, do you reckon it's a good idea to get 54 00:02:13,800 --> 00:02:15,600 Speaker 1: into the groceries because it didn't work last time. 55 00:02:16,320 --> 00:02:18,919 Speaker 2: It didn't work last time. But yeah, it's I don't 56 00:02:18,919 --> 00:02:20,639 Speaker 2: think it's I think the sort of merit and having 57 00:02:20,680 --> 00:02:22,760 Speaker 2: a crack sort of a game. This feels like there's 58 00:02:22,880 --> 00:02:26,080 Speaker 2: excuse upon the appetite for doing it. You know, we 59 00:02:26,160 --> 00:02:28,639 Speaker 2: do as I say, it's about twenty percent of their 60 00:02:28,680 --> 00:02:30,920 Speaker 2: turn over and now and you know where the warehouse 61 00:02:30,919 --> 00:02:33,800 Speaker 2: obviously is historically not known as somewhere that people go 62 00:02:33,840 --> 00:02:35,840 Speaker 2: and do their weekly shop, but they've tried it quite 63 00:02:35,840 --> 00:02:39,200 Speaker 2: successfully and all clands and de places and they're rolling 64 00:02:39,200 --> 00:02:41,760 Speaker 2: in that sort of nationwide, so it sort of feels 65 00:02:41,800 --> 00:02:44,280 Speaker 2: like they have a bit more idea about things this 66 00:02:44,400 --> 00:02:47,360 Speaker 2: time around, and they have got that footprint there. And 67 00:02:47,400 --> 00:02:49,880 Speaker 2: this also compensate, you know, for the headwinds you know, 68 00:02:49,880 --> 00:02:52,400 Speaker 2: the red sheets have been encountering. As I mentioned, it 69 00:02:52,520 --> 00:02:54,000 Speaker 2: sort of looks stuck in the middle was supposed when 70 00:02:54,000 --> 00:02:56,840 Speaker 2: you look at the retail side between Briscoes and cam 71 00:02:56,880 --> 00:02:58,320 Speaker 2: Out and you've got a team who and the like. 72 00:02:58,440 --> 00:03:01,520 Speaker 2: So yeah, perhaps groceries is going to be the way forward. 73 00:03:01,639 --> 00:03:03,119 Speaker 2: And you know they do sort of sort of get 74 00:03:03,160 --> 00:03:05,040 Speaker 2: the headlines when they sort of make an entrance that 75 00:03:05,080 --> 00:03:08,799 Speaker 2: will remember sort of Wheetbixgate and the five dollar dozen eggs. 76 00:03:08,800 --> 00:03:09,959 Speaker 2: So you know, I could p teach you sort of 77 00:03:10,000 --> 00:03:11,600 Speaker 2: ruffle some feathers of the two big plates. 78 00:03:12,440 --> 00:03:14,600 Speaker 1: If he was to get a hold of control again, 79 00:03:14,680 --> 00:03:17,040 Speaker 1: right this is sir Stephen. Do you think he'd want 80 00:03:17,080 --> 00:03:20,120 Speaker 1: to sell off maybe nol Leaming or Warehouse Stationary or both. 81 00:03:21,240 --> 00:03:23,720 Speaker 2: Yeah, it's quite it's quite a possibility, I think, because 82 00:03:23,760 --> 00:03:26,120 Speaker 2: it's they're not fit in a way. But you know, 83 00:03:26,520 --> 00:03:28,360 Speaker 2: I suppose that it works well at times, and you 84 00:03:28,400 --> 00:03:31,680 Speaker 2: think about COVID nol Leaming did very very well. Everyone 85 00:03:31,760 --> 00:03:33,720 Speaker 2: was sort of out shopping and buying big ticket items. 86 00:03:33,960 --> 00:03:35,920 Speaker 2: Now they're not with cost of living pressures and that's 87 00:03:35,920 --> 00:03:38,160 Speaker 2: sort of whether warehouse, you know, if it's sort of 88 00:03:38,520 --> 00:03:40,880 Speaker 2: cheap a end is helping to compensate. But they're not 89 00:03:41,040 --> 00:03:44,800 Speaker 2: really a logical fit in that respect. So perhaps, you know, 90 00:03:45,280 --> 00:03:48,080 Speaker 2: separating those two businesses would be one way to go, 91 00:03:48,240 --> 00:03:50,520 Speaker 2: and I think for sir Stephen obviously he would know better. 92 00:03:50,520 --> 00:03:53,280 Speaker 2: But you know, it sort of feels like a full 93 00:03:53,280 --> 00:03:55,320 Speaker 2: circle moment going back to sort of nineteen eighty two 94 00:03:55,360 --> 00:03:58,640 Speaker 2: and perhaps a swan song in terms of turning the 95 00:03:58,640 --> 00:04:03,800 Speaker 2: business arorout. There's again Prepston a reason why existing shieholders 96 00:04:03,880 --> 00:04:05,520 Speaker 2: might want to sort of stay but longer at least 97 00:04:05,760 --> 00:04:06,840 Speaker 2: hold out for a high price. 98 00:04:06,920 --> 00:04:09,280 Speaker 1: Yeah, fair enough, Hey Greg, thank you always appreciate your expertise. 99 00:04:09,280 --> 00:04:11,600 Speaker 1: It's Greg Smith, the head of retail at Devin Funds Management. 100 00:04:12,320 --> 00:04:15,520 Speaker 2: For more from Hither Duplessy Allen Drive, listen live to 101 00:04:15,600 --> 00:04:18,640 Speaker 2: news talks. It'd be from four pm weekdays, or follow 102 00:04:18,680 --> 00:04:20,440 Speaker 2: the podcast on iHeartRadio.