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LTI
Nigella asked in a post earlier today about the Tender offer. Do you have a view?
Those rough figures of course assume the option price remains the same.
The only difference is that any share purchase made now, about 50p per share of the capital outlay will be returned to you.
RW
''Does he convert now and receive the Special Dividend and consolidation or does he miss the Special Dividend and go for the consolidated shares.''
If someone had £9,900 in that particular SAYE price option scheme it appears the choice would be between investing £9,900 for 5,000 shares and getting £2,500 returned and ending up with 4,000 shares or investing £9,900 for 5,000 shares.
LTI
That is the point. I am still trying to find out what is happening about that. I can't find anything that indicates what would happen under consolidation. I have written to some Directors but haven't received a response yet. In October , people signed up for 1 share at £1.98 to be converted at that price in three years time. There was one lad on here last week that has had his matured plan but hadn't yet made the decision when to convert (I think he said he has up until July). Does he convert now and receive the Special Dividend and consolidation or does he miss the Special Dividend and go for the consolidated shares.
RW
''e.g. to take the so to £3, £4 or £5 that we still get the price per share in our SAYE plans. A nice bonus''
I'm afraid not.
If a consolidation is made over and above that required to take account of the return of capital then your SAYE option price would have to be adjusted.
If someone had purchased 10,000 at £1.60 at a cost of £16,000 and £5,000 capital is returned then their base cost becomes £11,000 for 8,000 shares which would be about £1.38 per share.
If then the 8,000 shares were sold for £2.68 then a capital gain of £10,400 would have been made
lun
''its giving you the shareholder part of your investment back''
Dividend INCOME makes up a part of the total investment return. Return of capital that you have invested comes about when you sell your shares.
Tesco's' special dividend will be a returning some of the capital that you invested.
The market capitalisation at the time of return will fall be the amount of the return, but with normal market movements on the day may be a little more or a little less than the capital return amount.
mags
there are no taxes to pay on shares held in an ISA. There are no thresholds
RW
''All of mine are in an ISA so won't affect me. ''
I would think a capital gain/loss would only come about when shares are actually sold.
I am assuming that a consolidation would be made to match the reduction in share capital.
In other words I would of thought that 4 new shares would be given for each 5 existing shares.
If someone now purchases 10,000 at £2.40 at a cost of £24,000 and £5,000 capital is returned then their base cost becomes £19,000 for 8,000 shares which would be about £2.38 per share.
If then the 8,000 shares were sold for £2.68 then a capital gain of £2,400 would have been made.
If you are trading within an ISA does this mean you don't have to pay tax on dividends? I would have thought a dividend is a dividend and taxable above the threshold?
I dont think anyone on this board has ever suggested that.
Whatever a company gives a special dividend basically its giving you the shareholder part of your investment back ,You'll end up no richer no poorer. Don't think for one minute you'll make an easy 40-50p per share. DYOR
'purchases reported after the bell'.....
Nigella
It is a good thing, the company is trying to restructure debt repayments at a lower interest rate and should be well received. Interest rates on debt is likely to be negative or very low for decades to come and the company is currently paying an average of over 5% on its current loans.
I am no accountant but I can only guess that the debt repayments offset tax liabilities. You have to question why the money from the Asia sales was not used to offset some of the debt but going forward the company will be paying less costs for that debt not forgetting the lower Pension fund payments.
Judging by the large purchases after the bell the last couple of weeks 'the city' must see it as a positive move even though we are currently stuck in the doldrums. Following link may be of some help.
https://www.investopedia.com/terms/d/debt-tender-offer.asp
How helpful saved them a trip all the way to page 6 ..rolls eyes
Thankyou
Spar i had a quick look at this but this payment is in conjunction with a share consolidation, a few bells and whistles attached so the extra 50p might be lost in the transaction.
Spar, don't worry about him, you have to be on the share register by 11th Feb.
Jesse Livermore: " The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.
And I can assure you I have chewed myself out numerous times for my fails
I mean i found the answer in less than 10 seconds on page 6 of one of many. I do wish PI's would make the effort to read back on the thread dicussion or at least understand you are eligible for a dividend until a share goes ex dividend.
How many more times for this question ?
If I buy shares in Tesco would I be entitled to the special dividend? Is there a cut off date set for shareholders to get this payment?
This is an area I know little about. I suspect LTI will know more about this. My understanding is that these are to raise monies to repay earlier loans which are reaching maturity.
Would I be right in thinking that you are wondering why monies from the Asia businesses are not being used to reduce the debt? Also, does the interest rate indicate future mainstream interest rates?
Can anyone shed any light on the good , bad or indifferent effect of the "Tender notes offer" announced on 19th Jan ....(price to be determined on 28th Jan )
The purpose is to ;, in their words, Strengthen the balance sheet.
I have not had any time to look but, from memory, the original circular mentioned that the sale represented something like eight times EBITDA. The multiple was stated but can't remember