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Mr Mac
29th Mar 2018, 19:31
Does the cabin have any thoughts on the above, as it obviously has an aerospace angle in that Airbus said they would no longer work with GKN if it was sold which appears to have happened today, although may await Govt approval. Personally speaking I believe they should remain independent, as it is one of the last bits of UK family Silver as far as companies are concerned.


Regard's
Mr Mac

Fareastdriver
29th Mar 2018, 19:47
It happens to many companies. my old company included. Take over, transfer the staff to 'self employed', unload the pension fund and then with all the enhanced credits flog it to a foreign investor for a 30% mark up.

chevvron
29th Mar 2018, 20:28
I'm sure the Chinese must be itching to buy GKN.

Andy_S
29th Mar 2018, 20:28
GKN weren't a particularly well run company, and Melrose have a great reputation for turning round struggling businesses.

At the end of the day, the shareholders spoke.

Jetex_Jim
30th Mar 2018, 06:09
https://www.ft.com/content/c6afe24c-3356-11e8-b5bf-23cb17fd1498


GKN’s fate appears to have been sealed by the more than 20 per cent of shares held by hedge funds and other short-term investors.

Melrose has come under intense scrutiny from customers such as Airbus as well as the British government over whether the turnround specialists will continue to invest in the engineering group’s UK operations.
...The fight over the future of GKN led to a political outcry, transforming the aerospace and automotive parts supplier into a symbol for the vulnerability of Britain’s industrial base as the UK prepares to quit the EU.

GKN is a key investor in advanced aircraft wing technology, a focus of the UK’s industrial strategy.



Well, this may simplify the question of what happens to the UK's participation in Airbus manufacturing, post (the topic that shall not be mentioned).



Meanwhile, no doubt, JB will continue to be preoccupied over the real issues of the day, Corbyn's antisemitism.

Mr Mac
30th Mar 2018, 07:40
Jetex Jim
I think your article neatly sums up U when it mentions hedge funds and short term investors sinking GKN. Short termism is the mantra which seems to be stock in trade for UK PLC in my experience.


Kind regards
Mr Mac

UniFoxOs
30th Mar 2018, 08:08
Beat me to it, Mr Mac. Strange how the stock market "experts" tell you that if you want to invest in shares you should look at it as a long term investment - but they don't seem to tell that to the fund managers.

Jetex_Jim
30th Mar 2018, 09:05
TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy
grows.
You sell them and retire on the income

VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new Prime Minister, leaving you with nine cows. No balance sheet provided with the release.
The public then buys your bull.

mikemmb
30th Mar 2018, 10:17
TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy
grows.
You sell them and retire on the income

VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new Prime Minister, leaving you with nine cows. No balance sheet provided with the release.
The public then buys your bull.

.........and you accept your Knighthood

Andy_S
30th Mar 2018, 10:55
Strange how the stock market "experts" tell you that if you want to invest in shares you should look at it as a long term investment - but they don't seem to tell that to the fund managers.

The trouble is that while GKN have a great history, they've been poorly run in recent years. Profits have been falling, key executives have been leaving, and the share price had slumped prior to Melrose launching their bid. A long term investment is pointless if the value of the business steadily erodes. Given a choice between hanging onto a business on the slide and recovering some of their investment, who can blame GKN shareholders for accepting the Melrose offer?

But hey, lets ignore a while longer the likely demise of a little more of the UK's remaining manufacturing.

Where do you get the idea that GKN's demise is on the cards? Nothing I've read suggests that to be the case, in fact Melrose have made a commitment to keep it as a UK business.

Jetex_Jim
30th Mar 2018, 11:07
I suggest you read the FT article that I posted the link to.


Melrose’s business model of “buy, improve, and sell” underperforming industrial companies within three to five years had come under fire from MPs and GKN’s own customers, who have questioned whether the new owner will invest for the long-term.


Such strategies are often associated with asset stripping.

Highway1
30th Mar 2018, 13:49
Well, this may simplify the question of what happens to the UK's participation in Airbus manufacturing, post (the topic that shall not be mentioned).




Airbus have components made all over the planet so who owns GKN this week is hardly going to have any impact on that.

ATNotts
31st Mar 2018, 08:30
Jetex Jim
I think you article neatly sums UK, when it mentions hedge funds and short term investors sunk GKN. Short termism is the mantra which spears to be stock in trade for UK PLC in my experience.


Kind regards
Mr Mac

Indeed, and you can see now why Unilever decamped from UK to Rotterdam. The Dutch put other obstacles in the way of take overs than simply "shareholder value", such as environmental factors, employees - and I am sure the national interest.

I'm sure the former owners / management of Cadbury will have wished they had moved their HQ to a more regulated jurisdiction.

Highway1
31st Mar 2018, 13:22
I'm sure the former owners / management of Cadbury will have wished they had moved their HQ to a more regulated jurisdiction.

Why? - 72% of the shareholders of Cadbury voted in favor of the takeover by Kraft. How would preventing what a clear majority of the owners wanted have met their wishes? :confused:

G-CPTN
31st Mar 2018, 14:20
I would imagine that the majority of shareholders are more interested in (their) short-term benefit than the long-term benefit for the company (or the employees).

Mr Mac
31st Mar 2018, 18:03
I have always looked on shares as a gamble where if you have a knowledge about the company or industry, you infinitely better placed than most brokers in my experience. However shares do go down as well as up so you will not always win, but what gets me is the length of term we in the UK give things to work that is wrong. Everything seems to be based on a return on a 3 year cycle, and at best 5 to coincide with elections. If you believe in a company and service or product, you should be looking to 10 years or longer.


Short termism is good for a nation which wants to be full of Sock Shops / Tie Racks etc (wonder what happened to them !) and Pound Shops or maybe a Service sector. Most of these are in trouble now, and with a service sector moving inevitably to a degree to Europe, some chickens may well be coming home to roost.


On that happy thought I have to prepare to go out to dinner, Happy Easter everyone.
Kind regards
Mr Mac

radeng
1st Apr 2018, 12:19
I have always looked on shares as a gamble where if you have a knowledge about the company or industry, you infinitely better placed than most brokers in my experience.

A lot depends on what you are looking for - dividends or capital gains. Lloyd's dividends this last financial year works out at about 5%, with BAE Systems paying a consistent dividend for the last 9 years with a low of 3.9% after tax. Never over 4.8%, though.


Everything seems to be based on a return on a 3 year cycle, and at best 5 to coincide with elections.

I am not entirely sure that it is always as long a 3 years. When I was working, many programmes were canned after as little as 18 months 'because we don't see there being a return for 3 years'.

This phenomena is not confined to the UK, however - in the US it seems that the last 3 months trading determines the current share price. That sort of attitude would never have allowed the railways to be built in the UK and probably elsewhere, too.

occasional
1st Apr 2018, 18:27
Why? - 72% of the shareholders of Cadbury voted in favor of the takeover by Kraft. How would preventing what a clear majority of the owners wanted have met their wishes? :confused:

You are making the common error that shareholders and owners are one and the same.
In the modern world "shareholders" are money managers, whereas the real owners are mostly people saving for, or receiving, their pensions. These latter get no vote at all.
Even real individual shareholders have difficulty voting because of the inadequacy of our share transfer system.

Highway1
1st Apr 2018, 18:33
You are making the common error that shareholders and owners are one and the same.
In the modern world "shareholders" are money managers, whereas the real owners are mostly people saving for, or receiving, their pensions. These latter get no vote at all.
Even real individual shareholders have difficulty voting because of the inadequacy of our share transfer system.

I would suggest you are wrong there. Pensions are just deferred salary so you do not own anything, you are simply paid to do a job.

And as for voting, I get inundated with voting forms and proxies for the companies I am invested in so perhaps you need to check with your brokerage if you are not receiving them.