Portfolio
Looking for a bid
Nephew Wilde
After a cursory glance at the headlines announcing the Slater Walker/Hill Samuel deal I suf fered a nauseous feeling which subsequently turned to anger.
Why had my stockbroker, Wotherspool not advised me to hold on to Hill Samuel shares, instead of selling at a fairly substantial loss?
This unreasonable attitude ot mine put me in a thoroughly bad temper. Yet before I had finished giving full vent to my irritation in a subsequent telephone converstion to Wotherspool I was made to feel an absolute idiot. He casually reminded me that though my sale price was indeed lower than the current value. I had still purchased Hill Samuel at a price significantly higher than this. So at a cost of betraying my ignorance I was able at least to derive some satisfaction from earlier transactions. But once again I am reminded of the importance of timing, even though my deals are not made with short-term (in my logo, the period of a stock exchange trading account) profits in mind.
Also as a result of my ex pressions of dissatisfaction with Wotherpool's research I feel I have goaded him into giving me a useful piece of inside information concerning another bid prospect.
This is Midland-Yorkshire Tar Distillers, whose principal activity is the production and treatment of chemical and other products derived from coal tar and petroleum. The various and end uses of products can be found in disinfectants, resins, detergents, pitch, creosote and fuels. Now, although Wotherspool picked MYTD primarily as a takeover situation with interim profits well ahead I am expecting a much improved profit this year. Last time the results were at a very low ebb with profits of £204,000 against over £1 million five years ago. Yet there were exceptional factors such as the coal and power cuts and the synthetic chemical activity incurred very substantial losses. Now apart from better trading prospects consideration is being given to developing projects to exploit site assets.
As for the bid hopes, these have been voiced for some time now, with Hay's Wharf, Berry Wiggins, Dundee Perth and Williams Hudson all rumoured to be suitors. Wotherspool tells me that Tarmac is the likely eventual bidder but any decision will be made bearing in mind the West Midlands Gas Board's holding of around a fifth of the equity. No wonder there are so many parties interested in MYTD for its assets are said to be worth around 400p. CementRoadstone leaves my portfolio to pay for this purchase.
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