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Mrc, if it is like that, that to meet the liabilities of the EBT the standard procedure is to issue new shares, thereby causing a dilution, then, agreed, there appears to be no issue.
The company could have announced buy back and all shares cancelled. Nobody would have batted an eyelid in 6 months time when more shares are issued for EBT.
The company is buying shares now that would have caused dilution if they had been issued as new shares in 1, 3, 6 months. I don’t see what the concern is.
Mrc, not arguing against you regarding the efficiency aspect and there may be something I am missing, but this comes across as using part of the buyback announcement to cover something, as you say, they would have had to do anyway in the future. It's like when politicians re-package something and announce it as new when they had already announced it previously. Therefore, it seems the true "new" value of the announced buybacks is the $15m minus the purchases for the EBT.
Dumbly,
The shares for EBT would have been created at some point in the future (not bought back from existing share pool). For me what they are doing is efficient…why go through admin of cancelling shares when you know you will need to create them again in 6 months time.
Dumbly , I’m with you on this. Straight talking from Enquest is needed. Puts a question mark on the credibility of its communications.
Great news at long last, those who think this not move the sp are sadly mistaken.
Enq is a low volume share and hence the intraday volatility levels will fluctuate significantly more than they do now.
My opinion only but if these are purchased in one or two trades only the bid/ask will move dramatically upwards.
It’s all very positive indeed.
Hi Dumbly - I'm probably more naive than you. Things I can't change I normally accept. I made (and I may be wrong) an assumption that somewhere in the several hundred pages of an ARA there is a commitment to grant shares to employees as part of their remuneration/incentives. I read this as a positive in that you can't NOT give shares to the employees and these were heading in that direction anyway - that is unless theses are over and above the usual entitlement which will also be buried somewhere in the ARA. I would rather chew my right arm off than search the ARA. It may even be that they thought we would welcome this efficient use of a buyback? I'll stop now as I'm completely out of my depth.
Summer is coming.
Roma, executive directors also benefit from the EBT :
It is intended that the first 25 million Ordinary Shares purchased under the Programme will be held in Treasury for issue in due course to the Company's Employee Benefit Trust to satisfy the anticipated future exercise of options and awards made to employees and Executive Directors of EnQuest PLC pursuant to certain of the Company's existing share plans.
Romaron, chiro, my point is not about an employee benefit/incentive plan, something I am of course in favour of, but that this was a pre-existing liability, so something they had to do anyway. The buybacks announcement did not specify that the first 25m of shares (a third or so of the buyback amount, so significant) were actually already baked in. They could argue the EBT liability is only a potential future liability, based on company results, but that would still not wash, as in that case as the potential liability becomes an actual liability, they should purchase company shares to replace the ones they are purchasing now, and that would defeat the objective of what they have announced. By all means, if the numbers work, buy shares now and put them in the EBT to cover their liability, but that should be separate and in addition to the announced buybacks.
Maybe this could be viewed as all part of the game, smart/clever behaviour – I view it as crafty, and I would not feel comfortable buying a used car from someone who plays with information in this way.
I will wait to fully understand but if I remain unsatisfied, I will indeed raise the matter. I’ve put it in the same file as saying 2023 was a good year based on the big gas discovery in Indonesia😊
Makes perfect sense to use first 25m shares for employees insensitive as what is the point buying shares in the buy back then issue more shares later for employees I for one was glad to see it.
Personally im not focusing on EBT
Regardless of the repurchased share allocation or cancellation , the buybacks now put massive buy pressure on the order book daily
I like that shares are earmarked for the EBT. You need employees with you. I'm not sure if Directors also get shares allotted from EBT or it is separate. There is a certain opaqueness but if it is needed to put the 'master plan' jigsaw together I won't complain. It reads to me that there is flexibility being built in.
Shares are always being gifted and options granted. I prefer the openness (as far as it goes) of this RNS. I read it as preparing for a major change in the company and removing barriers and building incentives in at this stage.
If you don't like it you can bring it up at the AGM but I doubt it'll make any difference. I read it as accepting the company is gonna be here years from now in one form or another. Or better still - load up the EBT for a deal.
We are using Merrill Lynch for the buyback for 2 months. We might not use up all the $15mio in 2 months. The end date of 30 June refers to ML not the buyback as I read it.
I think there is other stuff going on and this is a distraction.
Let’s wait to understand fully, Krack, but that’s the way I understand it now. If it is like this it is completely unacceptable not stating this up-front.
This is a P1 55 take if you ask me.
So really its only buybacks of £7.3m of buybacks if all the Shares were bought with a average of 17p the other 25m shares will just be changing hands
Mr Hunt must be working for us now "We will add shareholder value with buybacks but we'll give the bought shares away to ourselves later on for nothing, we'll call it a Bonus" -
Sleight of hand…
Surely, the shares to be held for Employee Benefit Trust should be in addition to the $15m shareback. Otherwise, there has been slight of hand. The 25m shares at current SP represent about a third of the $15m. This liability of the ENT is separate and pre-existing to the Buy-backs announced? So is the Buyback $15 minus or plus the liability of the EBT?
It is intended that the first 25 million Ordinary Shares purchased under the Programme will be held in Treasury for issue in due course............. after the initial 25 million Ordinary Shares are purchased, all additional Ordinary Shares purchased under the Programme will be cancelled.
R, your 'deal' theory works for me.
The shares are being stored for employees in the Employee Benefit Trust. No cheapo shares for the vultures. This means that AB + EBT is probably close to 20%. We have a dictator with skin in the game. I like this. Does the 2 month window mean that they are finalising a deal?