Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (5141)	5/24/1998 3:12:00 PM
From: LTK007	Respond to of 29382

Some reasons why stock price is depressed for this historic company(COU)----they may be a near term takeover by some industry giant,and i think at a high price is a real possibility ------------------------- The Guardian City Page Courtaulds to break up Hundreds of Midlands jobs to go as one of the oldest industrial names is threatened ROGER COWE 02/26/98 The Guardian Page 021 (Copyright 1998) THE fibres and chemicals company, Courtaulds, yesterday announced 500 job losses in the Midlands as a prelude to a break-up of the group which, eventually, could lead to the disappearance of one of Britain's oldest industrial names. Jobs will go at the Derby and Coventry headquarters of the chemicals and fibres operations, where one in five staff will be affected. Redundancies will take place among research, marketing and administration staff as a result of Courtaulds buying out the 27.5 per cent of the fibre activities owned by the German chemical giant, Hoechst. Cost-cutting measures have also been provoked by poor results. The company warned yesterday that sales and profits had been hit by the Asian economic turmoil and the strong pound. Exports of the new artificial fibre, Tencel , have slumped because of liquidity problems among buyers in South-east Asia. Profits have also been slashed on other sales because of the strong pound, which will cost pounds 25 million in the current year. Courtaulds is to sell its packaging business, which is expected to raise pounds 200 million. The specialist paint division will then be floated off as a new pounds 1 billion public company called International Coatings. That will leave the rump of the group which specialises in viscose and acrylic fibres and will continue to trade as Courtaulds, but which will be vulnerable to takeover by a large chemical and fibre group and possible loss of the Courtaulds name. Gordon Campbell, the chief executive, said: "1997 proved a particularly difficult year. It has concentrated our minds on our strategic options and the need to free the two businesses to pursue with vigour their individual strategies." Mr Campbell said the demerger was based on the same principles as the 1989 separation of Courtaulds Textiles. "Shareholders don't want to invest in companies which are bundled up in the way that Courtaulds was," he said. Mr Campbell believes the two independent companies would be better able to pursue the right strategies on their own. "The shareholders of a fibre company would be more likely to see the right deal as being appropriate than shareholders of Courtaulds as it has been. Also, the other party to a deal might be less keen to get involved in a group which it sees as being dominated by coatings." But he added that the key motivation was to increase shareholder value. That happened yesterday, as the share price shot up by more than a fifth after a steep decline over the past six months. The announcement of the demerger prompted speculation yesterday that an acquirer could step in to pre-empt the demerger of the coatings business. ICI, which has built up a leading global paint business in recent years, was named as one potential buyer. But Mr Campbell said it could remain independent. "There's no reason why it shouldn't be a mini Zeneca," he said, referring to the drugs company floated off by ICI, which has proved too expensive for predators. "Anyone would have to put an awful lot of money on the table." He also suggested the independent fibres business could end up in a merger with its arch-rival in the Tencel business, the Austrian company, Lensing. "It would be a good idea but it's not neccessarily going to happen", he said. Stretching back 1816 Samuel Courtauld III starts silk weaving business 1830 Addition of mourning crepe manufacture 1891 Samuel Courtauld & Co becomes limited company 1904 Becomes public company after acquiring production rights to

To: Sergio H who wrote (5141)	5/24/1998 3:18:00 PM
From: LTK007	Read Replies (1) \| Respond to of 29382

More,about Courtauld-- Courtaulds Plans Massive Restructuring To Boost Shareholder Value 02/25/98 Dow Jones Online News (Copyright (c) 1998, Dow Jones & Company, Inc.) LONDON -(Dow Jones)- Slumbering chemicals concern Courtaulds PLC unveiled its plan Wednesday to boost shareholder value in a radical restructuring plan involving each of Courtauld 's three divisions. Its star-performing coatings and sealants division will be spun off as a separately listed company called International Coatings PLC; the fibers and chemicals unit, which has been hurt by unfavorable foreign-exchange rates, will cut 500 jobs in a major cost-cutting program; and the polymer products division will be sold. The moves come a little more than a year after Courtaulds (COU) described its flagship man-made fiber brand, Tencel , and the polymer products and Asian coatings businesses as the company's "growth drivers." Now Tencel is about to take a loss, polymers is to be sold, Asian growth is stalled and coatings will soon be spun off. Analysts applauded the new measures, but some tempered their sighs of "about time" with concerns about the complex spinoff process which lies ahead. "I think it's a welcome and slightly overdue radical restructuring of the group which will allow the market and the company to focus more clearly on its future growth and direction," said Martin Evans, head of research at Sutherlands Ltd. "But one should acknowledge it's going to be a long road. This is a complicated process. It's very early days for a recovery story," he said. Evans warned the market's euphoric response may be short-lived as investors realize the complexity of the task facing Courtaulds. Dresdner Kleinwort Benson analyst Michael Eastwood greeted the news warmly. He sees the stock hitting 400 pence in the long term. He said the polymer products unit could sell for about 240 million pounds ($396.1 million), proceeds which would substantially reduce Courtauld 's net debt, believed to be about 440 million pounds. Evans said the sale price could be higher, given an industry average of about two-times sales. The unit had sales of 228 million pounds in the year to March 1997, leading to a 19 million pound operating profit. Courtaulds chief executive Gordon Campbell told Dow Jones the polymer products unit "doesn't quite fit" into Courtaulds new model. Campbell said the "complex" spinoff will "release shareholder value by creating two much more highly focused companies in strong positions." However, he said the spinoff would obviously take months rather than weeks, with shareholder approval likely to be some way off. - By Michael Reid; 44-171-832-8163; mreid@ap.org Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: Sergio H who wrote (5141)	5/24/1998 3:27:00 PM
From: LTK007	Respond to of 29382

Still more,about Akzo Noble seeking to get the Tencel prize by merging with Courtauld-------- Business View: Takeover where Courtauld 's Tencel is the real Akzo Nobel prize 04/21/98 The Scotsman Page 25 Copyright (C) 1998 The Scotsman; Source: World Reporter (TM) AFTER all the uncertainties of the past few months, the Dutch takeover bid for Courtaulds is probably the best available solution for shareholders and the group's employees, of whom there are nearly 17,000 The chief executive, Gordon Campbell, effectively signalled open season for predators in February when he announced his demerger proposals and the group is, perhaps, fortunate in being able to negotiate terms. The main danger was that there could have been an opportunistic bid for the group's paints and sealants division, which would have left its historic fibres operations out on a limb. In effect, Akzo Nobel is taking out the sealant side, but will also take the fibres operations under its wing, merging them with its own interests and nursing them to face life as independent entities. The Dutch say the move will enhance prospects for the fibres and chemicals operations, and for their employees, while the board considers options including a demerger of the business to existing shareholders. Courtaulds' fibres operations have a proud history. They made a fortune by producing black crepe for the funeral of Queen Victoria's consort, Prince Albert, and were the first to produce a man-made fibre 1904. But their plants in Britain, the United States and Germany have struggled to face tough competition from cheaper Far East plants in the viscose market ahead of the development of new products, including the highly-rated Tencel fibre. Akzo may have much the same problems, but its new fibres are at a more advanced state of development and a merged business could face an altogether more stable future. Tencel is a real prize, however, but needs investment.(A Key point--Max) Charles Brown, an analyst at Goldman Sachs, believes about half the combined group will be involved in traditional, but profitable, lines and another quarter will produce new generation growth products. That would leave just a quarter of the business involved in the troubled viscose sector. 'There are a number of other factors involved, including the level of debt which Akzo may pass on to the fibres and chemicals business, but the company should have a healthy future and will be in a position to take an active part in any restructuring of the industry.' Meantime, the deal looks good for the Dutch group's shareholders and the merger is expected to be earnings-enhancing in its first year. ..IS.- SCT