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40P already above the 250p,bit late on the upgrade-lol
Panmure Gordon has upgraded G4S from hold to buy, target price raised from 250p to 330p
Espirito Santo Downgrade = Pie in the Sky forecasting. GFS are in the midst of picking up all the police forces admin work as they concentrate their reduced personnel on front line work. These are very valuable contracts (see http://www.g4s.com/en/Media%20Centre/News/2011/12/21/Lincolnshire%20Police%20Contract%20Win/) which is the first of many. You wait until you see the size of the Greater Manchester's back office operations. I don't who these Investment houses employ but they sure don't do their research properly.
Everywhere I turn just now someone is wearing a GFS logo ! they have fingers in many pies - assuming the management does their job well then I see this doing very well when growth returns to the Economies around the world
Espirito Santo downgrades G4S from buy to neutral, target price cut from 315p to 290p.
Midas update today: http://www.dailymail.co.uk/money/experts/article-2058043/MIDAS-SHARE-TIPS-Sit-tight-G4S-suffers-humiliation.html
Just announced GFS pulling out of the deal having listened to shareholders ..... Wow .... are we getting heard ......
Time is running out for G4S to convince its shareholders to back a deal to buy Danish cleaning firm ISS. The £5.2billion plan was announced last Monday, only one working day after the security company’s top investors were informed of the deal, and caused shares to slump more than 20 per cent. After being in America last week, chief executive Nick Buckles yesterday flew to Copenhagen where he met with investors who control 12 per cent of the company’s stock, reports the Daily Mail
and a little more “An influential shareholder body has urged investors in G4S, the world’s largest security company, to block the board’s planned £5.2bn takeover of a Danish rival.G4S, which supplies guards to the Americans in Afghanistan and Iraq, drew fire when it announced the deal to buy ISS, the cleaning and catering services firm. G4S plans to fund the takeover by launching a heavily discounted £2bn rights issue and raising £3.7 billion in debt. The cash call would be the biggest in London since Standard Chartered raised £3.4bn last November. Shares in G4S fell 14% to close at 242¼p last week as the stock market digested the news,” reports The Sunday Times.
I find it hard to believe that any major company would make the same mistake now that PRU made so recently, and in a less volatile situation than this. With all the money paid to advisors etc, it can't be too difficult to make sure you have the votes that matter in the bag before firing the starting gun, rather than losing massive credibility for such a basic lack of communication. Then there is the conspiracy theory, that perhaps the big guys SAID they would back it and some do not now intend to. I often say that just because I'm paranoid, it doesn't mean they are not out to get me. Interesting times indeed
One of G4S’s top five shareholders, Parvus Asset Management, has come out in public opposition of the security group’s £5.2bn bid to buy ISS, the Danish cleaning and catering services provider. Parvus, which holds just under 4% of the group, said it had told G4S that the deal would overstretch it strategically and financially, the Financial Times reports.
If it goes to 260p I will probably bale out, but otherwise may just hang in for the hell of it! It's not a lifestyle changing investment. I agree that it seems the market is not over keen on it though. Surely they have run it past the major holding institutions, but not convinced the 5th biggest by the sounds of it. Takes some bottle to consider it in the present circumstances, one way and another
Good discussion, isn't it great to be living in interesting times? I got some at 235p and will see what develops, if it holds around here I will be happy enough. Could get killed in the rush for the door after the ri though.
The company claims to have sounded out the key II's but i read that the CEO is going to the US to convince the major shareholders there. I think the research re the failed IPO is still fresh in their minds and has spooked them. To quote one commentator .."beware of Goldman Sachs bearing gifts. It simply doesn't happen.." I tend to agree. A low margin business doubling in size by merging with another low margin but non-core business does not excite me particularly given the restrictions the financing of this deal will put on expansion within their core business for the next few years whilst they try to digest what they have bitten off. A bad strategic move in imho - we'll see!
Thanks for that. Why do you think the shareholders would vote to destroy their investment by c15% or do you think the SP damage is largely done already?
Newcomer to this forum but why should current SP reflect Rights Issue. Anyone buying shares between now and ex date on the open market will be entitled to the discounted shares at 7:6 at 122p or if not bought will be sold and so cash in lieu to compensate for dilution. Presumably the drop in SP since announcement is purely reflecting lack of confidence that this is a not a good acquisition rather than a 'technical issue' as the CEO claims? Am I missing something?
If issuing share rights at £1.22 after issuing rights SP is around £1.75. If you don't wish to lose money SP got to be around £1.75.
Ah, so the SP must fall to c176p, then, when the RI has completed (assuming a flat market)? Thanks for pointing that out. I've been talking rubbish about handsome gains to be made. Let's see if I've got this right now: At the moment of completion of the RI, the share price must undergo a "step change" from c240 to c176p, resulting in a zero-sum game for both accepters and refusers, the later being compensated for the fall in SP by a cash payment. I hope people will forgive me for my mistake; I'd figured that the extra capital would shore up the share price, but this "dilution" is inevitable; simple maths really. On the bright side, analysts seem to welcome this bold move by the board, and so it needn't be a zero-sum game for shareholders.
Ok I got confused with BBloes 176.5 - 122 = 54p cash back comment, where did these figures come from and what doe s the cash back mean?
Thank you for all your help. Much apreciated!!
Is there a cut of date to buy shares in order to be eligible for the rights issue?
This site has messed up the table. Left hand column should read "Ultimate Sale Price (after further RI investment). Right hand column: Profit.
Here's what I calculate for your investment of 3573 shares @ 232p Ultimate Sale Price (after further RI investment) Profit 150p -£1763 172.7 -£0 200 £2105 210 £2879 232 £4581 240 £5200 270 £7521 I like numbers like this! I'm buying more tomorrow. At this higher SP the numbers still look good. If you make the selfsame £8300 investment at this 240.8p price, the BEP is 177p, and the two bottom profit figures in my table are still a healthy £4673 and £6904.
No, mate, no errors in your calculation. She's recovered nicely today - yippee! I say again, provided the SP doesn't bomb we're on a winner here. The logical consequence of this is that many others come to the same conclusion, and they decide to buy, and the SP escalates.
Ok i figured it out, anyone elce who need to know it here it is 3573 (my shares) x 2.32 (price paid) = 8289 3573 / 6 (x) 7 = 4168 ( number of share i will get) at 7 for 6 4168 x 1.22 = 5085 13374 (total investment after the issue " 8289 initial " " 5085 Rights issue ") / 7741 ( total shares after issue) = 1.727 my break even point after the issue will be 1 pound 73 pence rounded up to account for lack of decimals above... I am happy with that, Would have been happier holding off till today but still happy UNLESS anyone see any errors in my calculations?