By Michael Byrnes
SYDNEY (Reuters) - Shares in Australia's AACo (AAC.AX: Quote, Profile,
Research), the world's biggest cattle firm, slumped as much as 14
percent on Wednesday after Futuris Corp Ltd (FCL.AX: Quote, Profile,
Research) ditched plans to sell its 43 percent AACo stake.
Shares in Futuris, a rural conglomerate with interests ranging from
farm products to property and auto parts, dropped more than 11
percent.
Analysts said shares in both companies were hit because the decision
took AACo out of play as a possible takeover target, while Futuris had
failed to deliver on a promised sale which would have been used to pay
down debt.
Analysts said Futuris had failed to attract a good price for its AACo
stake despite strong inherent value in the cattle company.
In a statement, Futuris said none of the proposals it received had any
certainty of execution or timing. It also said that market recognition
of the value of food production had increased significantly since the
sale was mooted.
Chief Executive Les Wozniczka said in a teleconference that financial
market turbulence since it put the stake up for sale in October, and
risks tied to a protracted sale process, had led to a decision to
"bring matters to a head".
"It's a good company," he said of AACo, but also described it as "land
rich, cash poor", with an enterprise value well over A$1 billion. Net
debt of A$500 million in Futuris produced a conservative gearing of 25
percent, he said.
http://in.reuters.com/article/hotStocksNews/idINSYD30715620080507
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AACO sounds and looks good , to uneducated onlookers
but ask if it really owns 27 cattle properties or simply uses /
controls 27 cattle properties
and then examie them carefully , who did the valuation , and who's
figures on production did they use to do their valuation , and did
they count the cattle , or even visit the property
Then ask why so few cattle seem to be sold each year , when on the
books they claim 600,000 head of cattle , but sales seem to indicate a
very very very much smaller number of cattle is more likely
then ask them to yard every one of their cattle so you can visually
see and count any individual mob to do a test of their stock numbers
on a random basis at a set time , like a spot check
my research indicate they do not have 600,000 cattle , hence the
valuations are worthless
it is this "number" that is used to value the company and its
performance and its assets
we all know we can not trust an accountant in a big accounting firm ,
who would not know what a live cow looked like , we know how elastic
figure can be
do your homework on this one , I have seen this before , ever
increasing cattle numbers can hide a scam , its cattle sales that are
more reliable , but even those can for scammed
kanga
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http://www.aaco.com.au/default.aspx
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