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I am new to this game and I have just received notification of M&Bs open offer to buy more shares . Their action presumably will dilute the value of my current holding but will I gain by buying more shares at the £2.10 option price ? Advice appreciated .
Daves, if you don't cut and run now then really you are forced into taking up your allowance. All depends on your timeframe. Personally stuck these in my SIPP at £1.60 and have bought some more the other day to increase my allowance. Happy to let these sit and wait for the divi to come back many years down the road.
Just to clarify you don't have to take up your allowance .you can allow it to lapse
Davesgold- have you received notification of their intention to undertake an open offer or have you recei
Davesgold have you recieved details of their intention to undertake the open offer or have you received the details of your allocation of shares and closing date etc?
Callum, you don't have to take up your option. If you don't shares will go to the underwriters but remember your existing holding will be diluted.
Yup very true
I agree
Thanks for the replies . The offer came via my AJBell account with a price of 2.10 and advised there would be further details in due course . I am likely to take up the offer if the price benefits me relative to the decrease in the current value of shares due to more being issued .
Could maybe be an RNS today after close and trading Monday ex offer?
Would make sense .
Be intresting to see what the analyst make if target price with dilution.
Plus Boris is updating on.lockdown Monday so could be intresting
Only thing to be careful of is if you have a stop loss in place. Price should drop at least 40% with dilution all things considered
Over the years I have ignored these offers / rights issues, you will probably be no better or worse off.
You own a minute part of the business anyway so dilution makes no difference.
Not received my offer yet, has anybody else that uses Halifax received it?
Neverdone - nothing from Halifax yet for me. Nbrown did a similar placing recently and I held them in my sipp with ajbel, and my isa with Halifax. Ajbell sent me a corporate Acton communication similar to the one Davesgold refers to in his post below that simply confirmed an offer was Happening and they would communicate further when details emerge whereas Halifax only sent me something when the official invite was sent out.
I am assuming that there will be an rns early this week given part of the reason that the offer is being done in the way it is is because it’s quicker than alternative options and they need the money quickly. Once the offer is official that’s when I expect We will hear from Halifax by way of a corporate action.
Hope that helps. Cheers
Thank you Pmoran1969
Hi ,I am with ii.co.U.K. and haven’t heard anything yet . One of the main reasons I invested here a few years ago was because of the shareholders with very deep pockets ( the ones that have underwritten this deal .) Who knows Boris might give a date for opening up soon . My bet is schools and golf/ tennis in March , shops in April and June for restaurants and pubs .
This was the response from MAB on Friday when asked about PI participation in the open offer.
Thank you for your email.
Further information on the offer will be provided to qualifying shareholders in due course.
Regards
Janet Barker
Secretary
Secretariat and Investor Relations
Mitchells & Butlers
73-77 Euston Road
London, NW1 2QS
0121 498 6514
Where do you get 40 percent from?
It’s just maths really. Last time I looked last week it looked like I drop from around 330 to 308..
it’s now a bit lower so in theory a bit lower than that, but not much.
If you don’t take it up you lose money as you will be diluted at less than market value
If you take it up you will buy a share for 210 that will be worth more than that, but your previous holding will have lost a bit of value. In theory it all evens out and if you want to ‘equalise’ yourself you can just share sells you the value of what you paid for the option.
It will require less shares than you purchased to recover your cost.
You will be left with more shares than you had before, with a lower share price, all else equal with the same value.
If you read the prospectus it's effectively a takeover on the cheap by “Odyzean Group”
Be intresting to see how the city view it as there some very concerning sections in that prospectus about what they will do in future .
“Odyzean Group”
Seem to be effectively taking over the company on the cheap at 2.10 .If you read the prospectus there some very worrying
Further, as a result of the Odyzean Group holding over 50 per cent. of the Company’s issued
share capital, it may acquire further interests in the Company without being required to make
a mandatory offer for the remaining Shares pursuant to Rule 9 of the Takeover Code.
I think this will just drive the sp down to 210 and you'll be able to buy as many as you like.
Dont get whats going on can someone explain in simple terms? is this just a simple equity raising of additional shares all shareholders can take up?
If so whats the big deal? if you take the offer the price would just balance out broadly to the same position reflecting the 20% addiitonal shares so it would just be my investment plus the 20% extra ive now invested?
If it is Odyzean Group's intention to take over the company they will have to purchase all the share capital.
The indications are that with the SP retaining its value, that this is what the City expects?
For better or worse I have just sold, taking a profit of 40% on my original investment. Articles in Money Week and Investors Chronicle aren’t that positive about what is proposed and my rough calculations on dilution didn’t show a great upside . On to the next one , City Pub Group are well tipped so I may say in this sector .