See No Evil – MMC Contrarian
From the outside it appears there has been scant regard for shareholders and I pity anyone who invested in one of the managed funds. Do management think we can see no evil?
Now along comes GPG with a takeover bid around 35% below value and Nick Bolton suddenly pops up on the share register. Could things get any worse? Yeah I guess they could. The same clowns who have been running this company into the ground could continue to do so while collecting their large paychecks.
Here was a company that was cashed up at the market darkest hours and yet failed to capitalise on generational low prices in assets. They waited and waited and waited and then choked. While that may be excusable for some companies, for what was a funds management company it is totally inexcusable.
The alternative view is MMC actually picked up great value in the CCFS deal, when they deployed a small amount of their cash. Though if that is the case then GPG who have seats on the board are being even cheekier with their low ball offer. Due to MMC’s management inability to create value or even highlight what little value there is, they are left exposed to corporate raiding by one of the teams that wrote the bloody book on that topic. A team whose seats on the board should have been working to create value for all shareholders.
It’s a while since the highly regarded Erik Metanomski departed with his golden parachute, I hope he broke a leg on landing. I really should have bailed at the same time and was continuously sucked in by the gap between share price and NTA. Now if only GPG would offer a fair price, I could move on and put this sordid little affair behind me. Come on Ron give us $0.73 and you can have the control premium for free. GPG picked up another 677 thousand shares yesterday, so I guess some players are simple happy getting out as fast as they can.
All of the above is of course my conjecture and I apologise if I have been unduly harsh on anyone. Feel free to correct me if I’m wrong or worse slanderous, or you believe management have created value by turning every $1 in October 2003 into a $0.10 capital return in 2008 and $0.48 offer six years later. Let’s be generous and use my $0.73 value and the $0.10 capital return. Gee they only destroyed 17 cents on every dollar over a time period when the Australian share market provided acceptable positive returns even with the latest sell-off. Nice work if you can get it. I wonder if management will be putting on their CVs that they can create negative alpha over extended periods. I guess not, no doubt they’ve all got someone else to blame and have themselves done a sterling job.
You have to laugh when the tag-line of MMC Asset Management is Preserving Wealth, Creating Value.
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