MetCash in Trading “Hole”

Metcash started the day on a trading halt. It has released its 2012 Full Year Results. Profit tumbled by 63 per cent. Franklins acquisition has played a major part as well as a difficult trading conditions.

By 9.00 am it has also announced that it will acquire Automotive Brands Group. Apparently they see a great opportunity with the thousands of independent operators in the automotive parts sector. Is the acquisition in line with their business?. The market may not see the same opportunity as Metcash. Specially after they will have to ask for capital to fund their acquisition.

Is it a good move? Metcash move resemble the fall of the car and home audio and electronics retailer Strathfield. The good Franklins acquision could be all undone.

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