Sunday, 4 January 2009

Constellation bid for Gladstone lapses

It will come as no surprise to regular readers of this blog that Constellation’s cheeky 25p bid for Gladstone has failed to attract sufficient interest (only about 11% on top of Constellation’s own 29.9% holding), and the bid has lapsed.

Quoting from Gladstone’s own
RNS: “The Board will continue to build on Gladstone's investments, which are not yet fully reflected in the trading results of the Company.” So it’s appendage on the block time – it’s time to deliver real growth (difficult enough without the existing credit crunch), or if the potential is really so great, could we see an MBO attempt?

My expectation is that, barring another bid, in the short term the share price will drop back to c 18p, but that later in 2009 there will be another bid, either from Constellation, or another company that has been able to acquire Constellations 29.9% shareholding (always assuming that Constellation is willing to sell it). If Gladstone’s Board get their act together, this could be for significantly more that 25p – or if not, Constellation may get Gladstone at even less than the 25p currently bid.

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