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Pete, You are being totally disengenuous. Aviva and abrdn are completely different beasts, with totally different businesses. It remains to be seen whether ii was a bargain (and I say that as a abrdn shareholder). Aviva has just refocused its business and acquiring ii would have been (yet another) a diversification. Returning surplus capital to shareholders does not mean that Aviva can't do complementary acquisitions (to the extent that it is permitted by the competition watchdog) but it does mean that it doesn't have £3.75bn on its balance sheet desperately looking for an investment; it's investment decisions will be driven by business logic not by a need to invest its surplus capital. That is sound business logic; too often companies are pursued by investment bankers to do a deal, any deal, and often end up coming a cropper. Investment bankers won't be queuing up at Blanc's door to get a share of that £3.75bn and that's a good thing.
Blanc has not done a great deal at all. Most of the sales of overseas entities were agreed or well advanced before she arrived. Same with return to core activity strategy. Also the return of cash to shareholders decision albeit the method of achieving this was decided during her tenure .
Pete640
I did say that I expected that Aviva would have consulted its major shareholders. FTSE 100 companies do that far more than many PI's think. Lloyds chose a share buyback because that is what their institutional investors wanted.
Bla
Top hat - what bunkum! Aviva could have continued share buy back, plus a special div, plus could have also bought Intetactive Investor, and beat ABDN to it, as it would have been great synergy! It could have also scooped up lots of little ‘toddler’ insurance and pension companies into is fold and have been the Top Insurer, Pension and SIPP provider in the U.K.!!!!
Amanda has done nothing but a fire sale and line the pockets of MM’s and BOD.
The point of the exercise was to return the excess cash the company had to the shareholders. Aviva couldn’t find enough new business within their risk appetite and profit margins.
While economic theory suggests that a company should invest up to their marginal point this is totally wrong for banks and insurance companies which have to hold regulatory capital against the business they write.
The financial crisis showed that marginally profitable business can become huge liabilities if there are regulatory changes in capital requirements.
Some people have suggested using it for M&A but the opportunities for acquisitions are limited. If there is a good, profitable business then the current owners will want a premium over its value to part with it. Paying a premium only makes sense if the target provides synergies such as scale or facilities which Aviva need but don’t already have. Also when a company takes over another it assumes all of the liabilities of the former. Look at what HBOS did to Lloyds!
The longer the company kept the cash the greater the pressure to use it in some productive way and there would have been a temptation do rash business or takeovers. The best thing to do was to return it to shareholders, which is what they did.
The company had three ways to return the cash. Dividend, Capital return or buyback. I would expect that Aviva consulted their major shareholders before deciding on a capital return. Having decided a capital return was the way to go a share consolidation makes things easier for shareholders to make multi year comparisons of SP, EPS NAV per share etc. as they don’t have to take the capital return into account every time they make a comparison.
I reinvested the B share cash I received yesterday and now have marginally more shares than I started with.
Your future dividend will be same or little bit more if you don't reinvest so basically you will have same div for lower investment, and if you reinvest then dividend receipt to you will lot higher almost 25% for your original investment. It's share consolidation without changing total dividend Aviva pays out.
Me neither. They have returned billions to shareholders but shareholders are no better off. cant work out where the 3.75 billion has gone.
Not sure what that was all about got my divi and return of capital but the value is pretty much the same …which I new it would be but I still do not fully understand why they did it that way …don’t get me wrong I’m happy with Aviva and there divi is great..