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British Bulls issued a Buy notice on Friday so the technicals must have moved positive. Every little helps...
Yes, I remember the price declining after the consolidation, oogleflugal. Actually, the reason I didn't take up my offer at 12p (I was going to) was that the price went a bit below 12p a day or two before the deadline, so I bought some at 11.41p (24th September), thinking I was being clever by saving myself a little. Little did I expect the price to decline even further, to 8p in old money, as you say!
If Sutherland had not got Dehaan on board a very hostile takeover would possibly succeeded at half the original offer, as that was evident from summer stake builder in 2020 with other institutions probably in the wings looking for a slice of the pie too. Possibly one of the reasons for them leaving and taking no interest in the placing hoping it would't work, hence the drop to 8p post placing. A gamble they lost. At that time too remember, recovery from pandemic was thought to bounce quickly and Saga and Carnival still expected to cruise in that winter.
Still getting very mixed messages on the Corona virus, some suggesting it will be a 'cold' status by spring. Saga rightly still extremely an sensibly cautious. However insurance trading robust and cruise booking at record levels. As PS from stockopedia often opines ' can't understand the crazy volatility is Saga sp now'. As far as the company goes I am confident we are in safe hands with indisputable board track record back at helm. There are other factors not under their control but that goes for any company. GL
Indeed I didn't take up my offer of new shares at 12p, RoxburyHouse, so in terms of ownership of the company, I was definitely diluted, I can see that.... but in terms of 'the pound in my pocket', the value of my holding, or what it was worth to me in quid, was that not unchanged?
At the time a lot of the holders did not partake in the offer since they thought the consolidation was a bad idea. They were right to a certain extent since the shares then sank to 120p.
….and if you didn’t take up the offer then yes you will have woken up the following morning with 15 times less shares than the night before but the pie was twice as big!
The financial director played “a blinder” by doing the dilution and consolidation at the same time and confused many (including the Sunday Times even now).
With reference to your post though unhooked even if you took up the full option to purchase the shares offered you were still diluted for 2 reasons.
1) Sir Roger purchased (created) umpty blonk million new shares for himself to purchase.
2) you put your hand in your pocket and paid extra £ for the same piece of pie you had beforehand.
No problem, RoxburyHouse.
But clearly there's some controversy on this subject, I had no idea... Should we to value the rejected 33p offer at 495p (15 to 1), or at 265p (8.04 to 1)?
Thinking back to my own direct experience (I held shares then), the consolidation did not effect the value of my holding at all. The morning after I held 15 x fewer shares at a price 15 x higher, exactly as one would expect. I'm a simple fellow!
Hi unhooked I do apologise for not replying to your post it was actually rude of me and thank you Batfasted for doing it on my behalf.
It’s just that it’s been discussed so many times and I think most people here are actually fed up with it and although I did compose a reply for you I didn’t post it because I was wary of starting it all up again.
But since we now have…
For some unknown reason everybody seems to completely ignore the Billion extra shares that were created when diluted.
One argument was that £140M was raised so that counteracts these but it just doesn’t especially since that has almost now been used to pay off debt for the infamous “tour” calamity.
In my time on this Board we have been round the issue of consolidation at least twice. There are a few different answers all right in theory but dependent on if you factor in the extra capital raise £140m after charges. That £10m charge still makes me weep.
bloody typo 15x15= £2.25
Never seen so much confusion about the share consolidation as on this bb. Maybe because the placing price was 15p and the consolidation was 15 to 1. So the new share price for consolidation was 15x 15+ £2.25. The offer price of 33p equates to 15x33= £4.95. Saga presentation today at 11.30 not x 15:)
If comparing the 'offer' (33p pre consolidation = £2.65 post consolidation) to the current s/p that calc. is only reasonable if one was to deduct the new capital raised in Stage 2 from the current capitalisation. That is to say that the s/p would not be where it is today were it not for the Stage 2 injection.
On top of that, there was a recent debt issue too, which further added capital, so that's also in today's s/p.
Hi Batfasted,
Thanks for posting this and, to the extent it was lifted from a RoxburyHouse post, thanks to him too (although I wish he'd referred me to his post in the first place, or deigned to explain it again).
Wow, that does make a material difference to the way I view these shares. The misapprehension has probably made me more loyal to my Saga holding than I would otherwise have been. Anyway, bulletin boards at their best - thanks again for putting me right.
Hi Unhooked.
Rox is correct.
I have pasted a section from one of Rox previous posts which explains the situation based on the change in the number of shares in issue causing a dilution at the time of consolidation.
Stage1
1,122,003,328 (1.1 BILLION) shares BEFORE dilution.
Stage2
2,093,921,536 (2.1 BILLION) shares AFTER dilution.
Stage3
139,594,769 (140 MILLION) shares AFTER 15:1 Consolidation.
If we simply divide the new share price by 15 (which most people here do) this will convert it to the mid stage2 completely ignoring the extra billion shares. It needs converting AGAIN (effectively doubling) to get back to the ‘OLD’ share price Stage1.
The easy answer is to miss out Stage2 and either divide or multiply the share price by 8.04 to get the ‘OLD’ or ‘NEW’ share price depending of course which one you start with or are after.
1,122,003,328/139,594,769 = 8.04
No answer RoxburyHouse? You don't have to answer, but it's a bit rude. Could it be because you're wrong?
"Today, the shares are worth 23½p, even if chief executive Euan Sutherland pretends they’re 351¾p, the result of a one-for-fifteen consolidation. Other recent highlights include two years of losses totalling £362 million; forgetting to ’fess up to a private equity bid approach at 33p (495p) ...." Alistair Osborne The Times.
Confirmation that the rejected 33p offer was worth 495p, not your 265p?
I thought it was a15:1 share consolidation (and a a capital raise ), hence 33p = 495p. It may not be that simple and am happy to be corrected and learn. I've shown my calculation, please show us how you arrive at your figures. Thanks.
The 33p rejected PE offer valued the Company at £370.0m which is 265p at today’s prices.
I'm wondering if it's more a case of the management and RDH stitching us up. It's hard to forget that they rejected a 33p a share offer to buy SAGA in September 2020. That's equivalent to £4.95 today!
Have to keep in mind, 2 previous large institutional investors have been selling and this has had a drag on SP for some time. Each time SP has crossed £4, there has been a knock back.
Once the two have cleared off, a clear path should emerge. I think people are reading too much into the small drop in SP today. Patience is key. Nothing I've seen worries me particularly. Yes, probably ought to be rid of tour, but maybe the timing is not great just now.
The chairman of saga is a rather successful business operator and owns about a quarter of the company. As long as he keeps holding, I'm doing the same. Follow the money as the wise people say....