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Was away for the AGM. The RNS makes for boring reading with the usual voting results. No press coverage yet....or maybe hushed!! Sp continues in an ever so gentle slide which is usually at a faster downward pace than BVS. I am beginning to think that this is a 'done deal' and non institutional shareholders have been stitched
up by the city. There is a political volatility that we cannot predict. For instance GFRD was trading at 688 but the moment the news broke that Farage was not going to field Brexit Party candidates in 317 tory seats it shot up to 715. If the deal falls through the SP could in theory drop slightly but should recover as investors like me pile back in. Let's face it , GFRD in its present form is a reasonable bet! Then a couple of weeks later if there is a conservative majority the SP will rocket. Non company events will come and go causing sharp rises and falls . The trick is to not to get too caught up in them and take an objective view. From where I am sitting I thank my lucky stars that I am out for the time being.....even at a loss!!
Thanks Nick, now it's clear to me. Have a nice day, take care.
Gfrd holders will not get the next 2 BVS dividends. After that the Consideration shares rank equally with existing BVS shares from late May 2020.
LayLady,
Thank you for your help and time.
I need to consider the last "consideration shares" to be include in the new shares 07 November (dividends) or 03 Jan 2020?
I'm still confuse.com lol....
Obelix
Timing
Subject to the satisfaction or waiver (where capable of waiver) of all applicable conditions under the sale and purchase agreement, each of the steps of the restructuring (including the Scheme) is expected to be implemented and to become effective after the close of trading on the London Stock Exchange on 2 January 2020. Completion of the Transaction pursuant to the sale and purchase agreement and admission of the New Galliford Try shares and the Consideration Shares, respectively, is expected to occur not later than 8.00 a.m. on 3 January 2020.
New Galliford Try shares
New Galliford Try will publish a prospectus in relation to the admission of the New Galliford Try shares on or around 25 November 2019. Application will be made to the FCA for the New Galliford Try shares to be admitted to the premium listing segment of the Official List, and to the London Stock Exchange's main market for listed securities. It is currently expected that admission of the New Galliford Try shares will become effective at 8.00 a.m. on 3 January 2020.
Consideration Shares
Bovis Homes will publish a prospectus in relation to the admission of the Consideration Shares on 7 November 2019 and the Galliford Try Board has been informed that application will be made to the FCA for the Consideration Shares to be admitted to the premium listing segment of the Official List, and to the London Stock Exchange's main market for listed securities. It is currently expected that admission of the Consideration Shares will become effective at 8.00 a.m. on 3 January 2020.
Sorry for the stupid question, but when we will have the rights of Bovis Shares (Dividends) it's after tomorrow? If all the resolitions pass, we will get the dividends from them by the next year?
Bosch, do you have time to go to AGM? Could you post for us please. Thank you
AGM tomorrow. Some hard questions will be asked. I look forward to the responses some of which will be downright lies. I note the SP is slipping gently ........
An interesting take. I am aware the ft predicts a 105p dividend for Bovis next year but I have my doubts and it will not be first time the ft predictions have got it wrong. After all , on a lesser scale , the ft predicted a 66p dividend for GFRD earlier this year and we arrived at 58p. I am working using the present yield for my calculations which is a form of stress test in itself. Regarding the predicted BVS share value I note on average it is not as good as what some press officers would like to have us believe with some brokers even recommending selling. As for the rump what I wrote is a brief , if optimistic summary of predictions taken from various articles in the past few weeks. If the past performance of the construction side and the integrity of the GFRD management is anything to go by I will go so far as to say that the assumed 10p dividend could be a one off! One could simply sell one's GFRD shares now and buy BVS shares if the synergy of the two companies appeals thereby effectively removing the risk of owning any shares of the rump should the deal complete. I hope for the sake of present GFRD
shareholders the drop to 703 is due to the 2.8% discount you mention. I see it falling further so in the meantime I will watch and wait, hoping that this deal does not complete and that Prothero is blackballed as a the man who shirked his fiduciary duty to loyal GFRD shareholders .
An alternative way of looking at the value of the bid is to ignore the complex transitional arrangements and work on the longer term picture. Looking at the earlier example with 13812 GFRD shares becoming 7928 BVS. Then future dividend payments might be 102p on each BVS share and say 10p on each New GFRD so you're getting around 9.4k a year, not bad on a 100k investment. I think that GFRD holders who have not attempted to trade and have got the 35p dividend have not done too badly out of the transitional arrangements. The fall in GFRD and BVS on Friday was due to the BVS placing going through at a 2.8% discount to raise c£150m for contribution of BVS in cash to the New GFRD construction business. About half of the 80-90p dividends due on BVS, not to be paid to GFRD holders, is now to be done through a scrip issue, which is diluting but preserves cash. I'm continuing to hold long-term.
Great response. I am personally happy to see this one play out. Pick up the BVS shares and see what happens. Will look out for that ~610 mark though
Mkx007, my reason to bail out is based on a very poor opinion of the way GFRD has repeatedly been economical with the truth especially with regards to the construction side. I see very little value attached to the rump and no amount of press will convince me otherwise. The margins on construction are wafer thin and the political outlook is uncertain. The SP continues to drop with the odd upward blip, rather like someone drowning and bobbing up for air. My threshold for rebuying is at about 610 and with GFRD being quite a volatile share..who knows!! ?? Should the sale fall through with GFRD priced at about 610 there could be a sharp rise as income investors pile back in. Maybe this is a 'la la land' prediction but haven't we shareholders been told enough fairy stories?
Thanks to you both. In simple terms I think I have certainly overlooked the the impact of the Special dividend on the Bovis share price. It is interesting that the directors have not taken that into account when valuing the deal at £1.1 billion. I think the debt in the construction side is around £180 million so the surplus could be about £220 million. I think the construction business has some value but yes I now think the current share price value is nearer £8 not £9 certainly not brilliant for GFRD shareholders. I'm holding on as I am not down on my current holding.
Let me run this past you again...
From a £100k holding post deal it will be worth £101k thus yielding 1% growth without doing anything. then you add on a compound dividend of circa 6% which is marginally lower than the GFRD dividend by still only at a small decrease.
Assuming you bought the shares for long term growth and you believe the company is heading in the direction the logical move would be to stay here take the deal and then sell the GFRD if you truly believe the construction side is worthless but the BOVIS side is where the money is.
I don't quite understand why you would take the loss here especially considering the economic situation. Housebuilders and construction companies both will do well should brexit be stopped so either play is dependant on the run up to December.
Hi Jonstep
I am afraid your estimate is incorrect.
Let's say you have £100,000 worth of Galliford Try shares today. At the current shate price this equates to 13,812 shares yielding £8000 pa.
With this deal you will be hard done by.
You will get .574 Bovis shares for one GFRD share.
Therefore you get 13,812x .574 = 7928 Bovis shares. Currently the Bovis share price is 1130.
90p will have to be deducted due to special dividend payable to existing Bovis shareholders
making the value of a Bovis share 1040 after this dividend is deducted.
The value of your Bovis shares will therefore be
1040x7928=£82,451. Your dividend yield will now be only be about 5.8% of £82,451=£4782.
Regarding the £300k. This will be used to reduce debt and from what I read there could be a £150/100 million surplus. If this surplus was given back to shareholders expect 135p /90p respectively. If the rump remains in profit I read a 10p dividend could apply.
Your 13,812 GFRD shares would then yield
£1,381pa. The value of your GFRD shares will be
£18,646/£12,430 respectively.
So at best you have a portfolio of 2 companies with a value of £101,097 yielding £6163pa.
If you rely on dividends this is very bad news especially because the GFRD yield could all but go with one nasty exceptional cost.
Your Bovis shareprice could increase, along with the dividend due to the synergy of Linden Homes and Bovis Homes.
I was a long-term shareholder enjoying a very good income but have totally bailed out at a loss.
I cannot understand why there isn't more written about what a poor deal this is for shareholders and what an excellent deal it is for management.
Prothero will leave behind what could be a sinking ship and will then follow the money all the way to Bovis. The way things are reported so far it gives the impression that this is a done deal. I am not so sure. The shareprice should be higher. Shareholders have been left in the dark
re future strategy and projected value in the rump. Simply extraordinary! The forthcoming AGM
will shed more light into this matter. If this deal falls through I will reinvest.
But there is value with the £300 million cash and £100 million debt transfer. I still feel there is a take out price of between £9 and £10 a share. I will be glad for someone to explain why I am wrong
yes
Does that mean that all is left is a Construction company..like Carillion....like Kier...?