Yield Options / RUL indicative proposal
Hi MM,
Two questions please - the first submitted two weeks ago but didn't make it into the subsequent two weekend editions:
1) There are many ETFs, LICs and other instruments, including in the debt space, with high yields in comparison to the yield on offer from bank accounts (increasingly so), even at the higher end of the bank account yield spectrum. This disparity will likely grow as interest rates continue to fall.
If one were to spread a portion of their savings across three such high yield options (noting that MM does not provide personal advice), what are MM's top four to five high yield options which also have the: 1) lowest levels of volatility (highest levels of price stability); and 2) lowest correlation to the performance of equity markets and to any form of broader economic deterioration? This might mean that some of the highest yield options are sacrificed in favour of a more stable but still high yield option. The aim is to have a list of high-yielding options with as low volatility (and risk) as reasonably possible.
2) MM Morning Report, 03.09.25: you state: "...indicative non-binding bid from Caterpillar (CAT US), with price and details yet to be disclosed"; and "we think the price will be north of $5 if they are successful".
Can you please clarify these comments. The 1 September 2025 announcement states that RUL: "has entered into an Exclusivity Deed with Caterpillar Inc. (Caterpillar) following the receipt of a non-binding indicative proposal (Indicative Proposal) to acquire all of the ordinary RPM shares and options on issue for $5.00 cash per share, by way of a scheme of arrangement".
RUL also says that the "Board intends to recommend the Proposed Transaction to RPM shareholders".
On this basis, why do you say the price is yet to be disclosed and expect it to be north of $5.00? Obviously, should a bidding war ensue, then that is a different proposition.
Thanks,
Darren
