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The board are far too blinkered to see this. I hope the large institutional holders can see the correlation versus the rest of their portfolios and vote no. The problem is the PE vultures waited far too long to make an offer and now the market is in a far better place then when they first turned up, if they made this offer 2-3 months ago it would have made sense however at this point in time the AA are no longer in need of a rescue.
The vaccine is almost here and credit market conditions have improved markedly. Therefore I think AA will be able to re-finance on better terms than was the case when the PE interest was initially announced when the market was in a bad place. I hope the institions decline the offer and refinance.
https://www.ft.com/content/e24ef81b-38d1-405c-a692-91f83512f558
Companies hit hard by coronavirus including American Airlines, cruise ship operator Carnival and German flag carrier Lufthansa are racing to raise billions of dollars, taking advantage of market optimism that an effective vaccine is close.
Hi, why are not more people taking the opportunity to buy in at volume for the extra 3p, if there is no deal they will have to refinance? Surely 35p is it game over??
Thanks peeps. Guess an element of risk built in. Personally I can't see much risk at this level, certainly long term even if things did happen to fall through.
Hi , because it's not yet an offer, they have until 24th to make a firm offer and as such haven't yet. but would expect another rns today or tomorrow to confirm it. Then the sp will go to 35p, or should do.
"discussions with the Consortium in relation to the possible offer." The operative word is POSSIBLE, Ie untill confirmed,
so if in profit perhaps take some off the table, sold 30% of my holding @ 32.60 earlier.
So that means I think there is a 70% chance of an offer at 35p or an improved offer . as this is the first offer....
Please excuse the question, but if 35p is the offer then why haven't we seen an increase in SP today? Seems an easy 10% profit based on current levels. Am I missing something?
62% profit - nice work.
@Gman753 Yes, I thought that statement was quite telling!
Assuming the offer is firm and the BOD recommends this to shareholders for approval, 35p represents about 14% of the float price in 2014! A salutary lesson in how a debt pile will cripple, what potentially and operationally, is a good company. Spare a thought for those retail investors who are holding huge losses. It could be worse! you might have invested in the WEIF!
Currently sitting on a 62% profit. Toying with the idea of selling all, maybe half, now. Disappointing as I could have had higher 2 months ago and it was the possibility of a +40p offer that kept me in!
...so the offer needs to be formally announced before tomorrow's deadline, or is there an option for another extension instead?
The Board, having considered carefully the viability of a range of alternative potential debt and equity refinancing options together with its financial advisers, has indicated to the Consortium that it would be willing to recommend a cash offer on the terms of the Proposal. Accordingly, the Company is engaged in advanced discussions with the Consortium in relation to the possible offer.
This seems like the BOD have made the decision to support the offer - 35p!!
Seems a strange time to sell today, if an offer is made tomorrow and it looks like will happen now the sp will be 35p for a few weeks until the shareholders vote. It's only then that a no deal can be made and then the sp will go down.
If the bod's are going to decline this 35p offer tomorrow then surely they would have said today they didn't consider 35p to be a true value for the company. only my view .
I'm selling half now not fully risking this
It'll go down to 30 - there's still risk here.
I think the absolute tops it'll go for now is 40 and the downside is probably 18/20 if there's an extension or AA. turn down the bid. Debt pile is crippling them unfortunately.
I was sitting on 27% profit and I was just happy to take.
GLA holders
I wondered that question myself BoracicLint. I think it is saying if you do not sell your shares, more shares will be issued and you will need to subscribe to this quasi rights issue to maintain your shareholding with you receiving no cash for your existing shares. Not sure if this is to keep existing IIs on board. The bit you quoted is a footnote so needs to be read in conjunction with the sentence it relates to setting out the option in lieu of cash consideration. Hopefully someone more learned than me can explain this.
Hi everyone
Sorry for new people like me, could someone explain the risk of shareholders putting further equity to not have share dilution
I have AA shares and worried about this message in RNS , if I should hold or sell
I cannot see the deal falling through for the sake of another 3p-5p after about 3 months work, If they want AA surely they must have a fall back position for 40p.
I noticed there is a note at the bottom of the RNS that says: Electing shareholders are likely to have to make a further equity investment very shortly after closing of the offer to avoid a material dilution in their ownership.
Does anyone know what this means? Does it imply we will get less than 35p if the deal goes ahead? Excuse my ignorance!!
I am holding on as the offer to buy shares equates to circa £220M with a further £380M investment to reduce debt (totalling £600M). A 40p counter offer only adds circa £30M to the overall offer. In the grand scheme of things nobody is going to give up a deal over 5%. unfortunately it is another wait and see.
Any chance other bid from one of old interested parties given they have done certain DD and with good news of vaccines.
So the offer is 35p ,but who offers their best and last price first time round, they have been working on this offer for what about 3 months now and I think they have built in 37p -40p as the final offer price.
So when this offer gets turned down which I think it will they will come back with a final offer of 37p-40p, then a deal will be done.
Good points. Thx
This will be the second time AA staff have been shafted by a share scheme, never again!
If I was the PE, I would be worried that I was effectively punching my future in laws in the face and then inviting them to the wedding!