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Beat me to it abc.
I cannot believe they wouldn’t have attempted to buy Crst in the first place. On level terms they could have taken them for about 700m?
I think your missing part of how this works. Look at the BDEV share price - the market has repriced it based on this new information, currently at 492p. 1.44 shares at 492p is only 708p per RDW share. Don't forget this deal doesn't bring any new money to the table - apart from in the medium term some cost savings. So logically any raise in RDW shares has to be paid for by a corresponding fall in BDEV shares. Redrow shareholders have got the better side of this deal and there is no guarantee the BDEV share price will even hold where it is (their results announcement today was NOT good).
So, you are at the whim of how the market now prices BDEV shares and if you hang on you are locked in for weeks until the new shares are issued. Maybe consider taking the money now and pat yourself in the back for being on the right side of this deal. You may well be able to buy back in at a lower price than this in the near future!
That would be true if it was a cash offer but this is a stock offer. 1.44 shares of BDEV for every share of RDW. So you'll only get £7.63 per share if the BDEV price is ~£5.30 when you sell. The value is tied to the share price of BDEV going forward (which is down ~7% this morning on the announcement).
There seems to be some confusion with the RNS. To me, it seems very straightforward, but the below information is just in my opinion (see the more mainstream articles for a more simplistic breakdown of the RNS).
£6 per share (closing price) + a 27.2% premium = £7.63 per share.
The market hasn’t noticed yet, nor have the institutions had time to wade in. Once the investors who don’t understand the RNS have sold out, the volume should bottleneck, sending the SP to somewhere very close to the £7.63 sale price. I think we’ll see £7.40(ish) in short order.
When my other stocks have been bought out (SCS last year, for instance), they’ve followed this process.
Why anybody would sell, or even trim, at this price, is an absolute mystery to me. To me, it’s like being promised 27.2% (or even 20%) above market value for your house at 3pm…. But still selling it in the morning at market value… hardly smart investing imo, but each to their own, it certainly doesn’t affect me.
Do your own research, and congratulations to all holders
Sparhawk - looking at price action CRST looks to be next.
In last July and exited at open - boom ! Patience pays.
Good advice Mary - pleased I dont work for either as it will be a worrying time.
Just be happy
Takeover by bdev implies sp rise to well above £7 but we will be lucky to see £6.75. As a shareholder in both I am interested in both but I do think that RDW should be taking over Barret because they seem to perform better.!
Expect Wimps to move towards 170p
Should help all the builders, whose next?
Fantastic start to the day.
Https://www.proactiveinvestors.co.uk/companies/news/1032717/redrow-predicts-low-end-profits-in-subdued-housing-market-1032717.html
taverham....similar on all the others aswell....pesky interest rates
Update on trading a litlle worse than I was expecting = especially volumes - sp might drift a little lower imv.
Crossley,
As it just happens, "Traffic lights" are likely to be referenced in my next post there, due soon, probably shortly after Redrow's ex-div date as that is relevant ~ so maybe just wait a while for that...? :-)
Strictly....
Afternoon Strictly
I have read quite a bit of the blog but either have forgot or more likely jumped the lights so to speak. I must re visit!
Crossley,
Unfortunately I was pouring over the results for a good hour or two before deciding to trade, starting reading about 9am, so while Mr Market got off to a slow start on Redrow, I was off to a slower one, but I still caught some today's rise at least...
It's more a matter of what the share price, relative to Bellway's that is, is doing as from 21st so as to give me two "green traffic lights" to trade ~ if you've understood about that from the blog...?
Strictly
I’ll have a read. I used to get e mailed when there was an addition to the blog but not lately.
That should literally pay dividends if you got in early this am. Which I’m sure you did!
Crossley,
No, it was Bellway....
I am mindful that Bellway isn't likely to go ex until early December based on the past, and I'm very much a seeker of dividends while shares are selling significantly below book...
Because the argument I've always made about the folly of buying Persimmon at 3 x book for a full fat div is reversed when you can more than achieve 4 x times that in bang for your buck terms with Bellway & Redrow currently...
So, I've sold Bellway for Redrow with the aspiration of switching back to Bellway after 21st September if the market is kind enough to provide a glimmer of an opportunity before December to do so in order to catch the div there....
Each div is around 4% yield, and each is only costing around 75p of book value for every 100p cash received, ignoring tax considerations.
Anyway ~ that's the plan, Stan....
And, if it doesn't happen, I'm more than happy sitting in Redrow based on its performance for last year as well as for the decade or so before that....
If you're on the blog (I think you are?) I put up the full monty of an explanation there this morning...
Strictly
Afternoon Strictly
I presume you chopped CRST to increase here?
Chart position, today . Overhead supply from previous trading at 500, so the sp, may retreat to support at 480, before resuming upward movement. Current price target of 550 is moving upward with time, so that RDW, is most likely to meet with its future price target of 589, on or before 12/11/23. If sp, retreats to 480, buy.
PS
As a footnote to my previous comment, I referenced book value progress for Battersea against Bellway, given that Bellway is my benchmark share...
However, it would probably have been more helpful to compare against Redrow, seeing as not only is that the share in question but also Redrow have done particularly well over the same twelve year time span ~ in that they have more than quadrupled their book value per share in that time...
While Battersea have just sat there with feet of clay and gone nowhere, don't forget....
Perhaps just pause to consider that for a moment, and never mind what the market may think.... :-)
Strictly