Renaissance hires strategic adviser as stock halves

Renaissance Corp, which shrank its balance sheet with the sale of its IT distribution business, has hired Grant Samuel & Associates for a strategic review, saying its weak share price leaves the company vulnerable to a takeover.

The company [NZX:RNS] last traded at 15 cents, valuing the Auckland-based company at $6.3 million. The stock has about halved in value in the past two years.

The shares have been trending lower since early 2006, when they were $1.60. Later that year it lost its exclusive right to represent Apple in New Zealand.

The directors "believe that the current share price of the company is substantially below the value of its component divisions", it says in a statement. "As a result, the company is vulnerable to a takeover offer, which may not adequately recognise the value inherent in the business."

The remaining units are Yoobee, a specialist Apple retailer with 10 New Zealand stores, and Yoobee School of Design, formerly known as Natcoll, an education institute with campuses in Auckland, Wellington and Christchurch.

The design school produced earnings before interest and tax of $2.25 million in its latest full year, up from $1.5 million in 2011, when its Christchurch campus was severely affected by the earthquakes.

Yoobee Retail has an ebit loss of $374,000 in 2012, down from a loss of $923,000 in 2011.

Renaissance says it hasn't received a formal offer for its businesses yet. The work with Grant Samuel is expected to take three months.

(BusinessDesk)

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You can make numbers say a lot. Another true statement would be that the stock has gone up by about 50% in the past 6 months.

Instead of worrying about some imaginary takeover threat (which would have to be at a decent premium to the current share price) why don't the board get on with delivering decent performance which would result in a rerating and a higher stock price?

The board has dealt with a huge number of problems over the past few years and done a pretty decent job. Why don't they stick at it a bit longer?

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The board has done this because it's a lot easier talking about a potential takeover threat (to increase share price) than it is to improve performance and create value.

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Blame the management for the Christchurch earthquake?

For Apple changing the rules of distribution and forgetting how Renaissance supported Apple through its dark times?

For taking pre-emptive action now so that some smart-a*se investment banker does not come along with a 25 cents offer and sell the component parts to the interested parties at 60 cents?

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