I am monitoring the share price of AGARangemaster (LSE: AGA) todayfollowingWhirlpoolslatest announcement Id have neverexpectedabidding war, but this is the most likely scenario right now!
Elsewhere, the shares ofLatchways (LSE: LTC)andExillon Energy (LSE: EXI)have also caught my attention today. They are up 48% and 7.7%,respectively, in a plunging market, with the FTSE 100 down 2.6% at the time of writing.
AgaRangemaster On The Up
This is great news for shareholders, but how much risk does the trade carry now?
When initial takeover news emerged in mid-June, AGAstock surged over 30%; back then, it announced that it was holding discussions withUS-based Middleby, which offered185p in cash for each AGA share soon after, valuingthe equity of the target at about 129m.
Whirlpool may or may not make a formal offer, yet the stock of AGA currently trades at 203p and could seriously offer more value to shareholders.Whirlpool is expanding abroad, and AGA would be just a bolt-on deal, so its suitor could well overpay for it.
Frankly, these situations are ideal for opportunistic traders, but I am after long-term value so Id likely give it a pass, although more upside is possible.
Goodbye Latchways
Latchways, amaker of protection systems, said today that it had agreed to be bought by US-basedMSA Safety for an enterprise value of 114m.
Under the terms of the acquisition, Latchways shareholders will receive1,100p in cash for each share they own, which implies a 53% premium overLatchwaysshare price on Friday.
Its share prices 52-week range is between705p and 1,068p, and it appears clear that its shareholders are being offered a fair deal.The group has never recovered from the plunge in its valuation at the end of 2014, which came in the wake of a profit warning last autumn.
Id say that this is the best outcome for shareholders, given that the outlook for many of its end markets is still problematic.
Exillon Energy: Too Risky?
A risky bet (as its price to book value indicates), the stock of Exillon Energy is perhaps the mostappealing investment of the three, having risen7.7% today following the release of a trading update today that showed:
Net profit down by 45% to $13.2m ($23.8m in H1 2014);
Earnings before interests, taxes, depreciation and amortisation down by 40% to $30.4m ($50.7m in H1 2014);
Production down by 7%, with the average production for H1 2015 equivalent to 16,643 bpd.
Operating costs have fallen, but negative working capital should be closely monitored, although capex requirements are covered by its cash balances over the short term.
As at 30 June 2015, the outstanding debt had reduced to $54m, as a result of scheduled repayments of principal. Our net cash position was $5.2m, Exillonalso pointed out.
In short, it could have been much worse: its stock now trades at108p, or some 20% above the 52-week low of 90p of last week. I am tempted!
Oil prices had risen almost 20% in less than a week but they are down over 3% today on the back of weak factory data from China,which testifies to a highly volatile market environment.I am still convinced that Brent crude oil will trade around $80 per barrel by the end of the year following a less aggressive production policy by the OPEC well, to me at least, this will be what it takes to invest in Exillon and other similar oil players!
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Alessandro Pasetti has no position in any shares mentioned. The Motley Fool UK owns shares of Latchways. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.