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Oil Novice. I was in Cove..it was quite a ride. Remember it well.
@cluelessinvestor - for Cove Energy the sp opened at just under takeover offer price and stayed there until circumstances changed (second bid / tax).
There were buys and sells throughout - MMs were happy to trade as they made money on spread.
Interestingly, during takeovers arbitrage funds are very keen to take shares as they are often able to squeeze additional profit from the acquiring entity during contract negotiations. Also, they get the shares at just under takeover price so make a small %, but substantial monetary profit.
Another takeover was in Tinci Holdings. In Dec 2014, the MD decided he wanted to buyout all shareholders at 20p. This was an informal offer RNS. The sp rose that day from 4.5p to 14p. The sp stayed at the 14/15p range for a few weeks until GM for shareholders to accept offer. Then in Jan 2015 an RNS confirmed formal offer at 20p. The sp then went to 20p.
On any takeover bid, the market will always price in risk and so if the sp doesn’t re-rate to offer price, this is indication of higher risk in the offer not being finalised.
All IMO and experience.
Thanks GFD!
Featured snippet from the web
Forms 8.3 and 8.5 are disclosure forms required by the Takeover Panel to clarify material interests in the share register of a UK-listed company that is in a bid situation.
I could be wrong but a “takeover” is for the entire company Right? Why would the “takeover panel” need this info if just asset sale? If it is a full company sale this will be more than the afc report fair value. What are your thoughts guys and gals?
Not sure that is entirely true
Although it may be depending on what has already been agreed
The shareholders own the company
What the company do with assets has to be agreed by the shareholders
But in all likelihood somewhere along the line the shareholders have agreed to give the board the responsibility to make these decisions
It’ll be in the small print somewhere
Guess if you have a board you have to give them the responsibility to make the right decisions
Good luck all
If there will be required only 51% votes then BOD has 25% and two or three big institutional holder will do 51% of votes so PI's don't need to be considered at all
Is an SGM the same as an EGM?
Usually it will be just under 195p if the offer is 195p. There will still be liquidity of some sort, since the offeror will often try to purchase off as many shares on the free market from people who are willing to sell.
There might be times that it might just exceed the offer price by a tiny bit if people think a better offer is going to come, or if they think the offeror will up its offer, but usually it's within a very tight range of the publicised offer price.
Hi Gfd,
I thought a SGM was for whole company sale and an asset sale can be done without shareholders voting. So if a bid comes in for MT the board can sell it without our approval.
Gla
@OilNovice
Forgive my lack of knowledge about the takeover process, first time I've been in a company going through one but a few questions,
So upon the takeover bid, such as the 195p from shell, I assume the share price opens at that 195p and floats around 195-195.5p and just doesn't move? Does that mean there is no liquidity in the market? What if you're happy with 195p and want to sell up and someone wants to buy in hoping for a bigger takeover price, are the MMs happy to fufil those orders? How much demand is there normally?
That would depend if it the offer was for part sale or full sale of the company. If it’s full there won’t be a dividend to be had.
Let’s say it hits 50p, this obviously means those sellers miss out on a potential special dividend of a sale if they sell their entire holding... right?
OilNovice...that's interesting to hear. Cheers.
CAW - the most memorable takeover I was a shareholder in was for Cover Energy back in 2012. Cove was a gas exploration company in Mozambique...
First offer came in from Shell for 195p - sp went straight to c.190p and stayed there...
Until, PTT (Thai O&G company) made an offer for 220p - sp jumped to 215p and remained there for days...
Until, the Mozambique government decided it would impose a Capital Gains Tax of 12.8% on any sale - the sp then dropped below 150p (I believe) and then fluctuated between 175p-190p for a few days...
Then Shell decided to match the 220p offer and pay any tax bill - the sp then went to 220p until de-listing.
It was a crazy few weeks...
But it goes to show that nothing is guaranteed, and anything can happen - good or bad!
I have a question along similar lines ...
If there is a bid for (as an example) 55p, but another for 60p, at what point are we told?
i.e. Is there an RNS for the first bid, then the second... third... etc until we reach the final price
...
Or do we just get the final bid amount in one RNS and we can jump around in joy?
Thanks in advance, Si
No worries flying duck -0-0- good luck all.
Thanks again
Thanks both for reply. Just checking whether I need to watch sp like a hawk as getting eye strain already! Yes flying duck where’s the optician on the bb
The company with the winning bid will usually buy any stock at below their offer price as it saves them cash on the payout day re less shares needed to buy, therefore always a settled trading period.
and some would stay in to the bitter end hoping a counter bid came in, has happened before.........personally I would sell most at near to offer price to secure it and keep a small bit left in just in case a counter offer materialised...
CAW1 - if an offer is made the SP will likely rise to just below that figure, many will sell but the SP will remain broadly stable as that is the offer price, so for example, if the offer was 54p (if), then SP would likely rise to 52-53p and stay there fluctuating a little day to day until the final deal was closed, many would sell to ensure the money was realised just in case the deal fell through which would be unlikely to be honest - that is how it usually works anyway, but this is EUA.......
Cheers for the flak flying duck, like most here just wanting to get the most profit I can. And yes when the button needs to be pressed to sell don’t want to miss a single penny in profit. It will be hard enough getting a quote at that point. Hence the stress.
Don’t post much but have a medium holding, followed stat man from other bb here and invested after research, kindly made easier from people on here.
I have probably a naive question
We are here at 17p due to mm’s and Sellers/slicers when hit 21p.
When good news arrives at say sale at 54p and share price rockets to that price, will then everyone slice/sell and sp collapse or will it drop and rise as people sell and then others buy when it drops lower again to get a return and rise back to 54p and maintain that level?
Also if sale agreed at x price will trading stop and we get that price? Is this the best outcome for the heart?
I guess no one knows but someone may have experience similar in the past. Trying to work out whether to add sell limit at price I am happy with but don’t want to miss out either on being too high/low.
Appreciate any thoughts.Thanks