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Would it be better to add now before the consolidation takes place or after? I am thinking to use the expected dividend to add to my holdings now
luckylurcher
'Bored of consolidation chat' blah blah
suggest you don't read them then. I here found it insightful mainly thanks to MikeM14 and his supportive posts. By the way who cares about your windfall? imaginary?, not to be realised? or genuine?. Who cares
Bored of consolidation chat as there is FA you can do about it ! Bit of a slow start this morning but here is to a 52 week later today . With increment of SP since announcement I suggest the consolidation will be a good thing , the city do not see this as a a problem. Now what do I do with my windfall ?
Hi again kassam83,
No you don't get new shares "rather than" the special dividend paid in cash.
You get the special dividend paid in cash (16.8p for each share you currently own. You also get a new type of shares that *replace* the shares you currently own. If you currently have, as an example, 1,400 shares, instead you will end up with £235-20 cash plus 1,300 of the new type of shares.
Probably best if you just read the announcement directly yourself. It looks quite long, but it's not too bad:-
https://www.lse.co.uk/rns/NWG/notice-of-general-meeting-and-class-meeting-c9a32krjtqj4yge.html
Regards,
Mike.
[apologies for duplicate post]
added again today, medium term view.
folks on this board who were dissing aviva’s use of share consolidation etc.
might care to note how market is *beginning* to understand AV. a bit better.
added again today, medium term view.
folks on this board who were dissing aviva’s use of share consolidation etc.
might care to note how market is *beginning* to understand AV. a bit better.
Hi Mike
Yes HSBC is my broker
Are you saying we will be receiving new shares rather then the special dividend paid in cash?
Totally confusing if I am honest
Hi kassam83,
Yes, that's when you get your new, consolidated, "larger" shares to replace your existing shares.
Perhaps rather than "due to be paid" they should have said "due to be admitted", or similar.
I'm presuming that HSBC is your broker.
Mike.
Hi kassam83,
Yes, that's when you get your new, consolidated, "larger" shares to replace your existing shares.
Perhaps rather than "due to be paid" they should have said "due to be admitted", or similar.
I'm presuming that HSBC is your broker.
Mike.
Anyone make any sense on this....
Received a letter from HSBC on the share consolidation
in the letter it states exactly this
"The new shares resulting from the consolidation are due to be paid on or around 30 August 2022.
New shares?
so close maybe we will hit 52 wk high 1st thing in the morning.
The city doesnt see the consolidation as a problem & still the most popular UK bank share currently .YTD NWG +9.15 LLOY -9.07 gap widening by the day nearly a 52 week high perhaps this afternoon ?
Hi Fonzius,
Re your post at 13:38 today.
I've checked your numbers, and they look correct.
The problem is that the "new" share price won't necessarily be £2-54, or the same as today's "old" share price. Some things are fixed, and some are variable. What is fixed is the current total number of shares, and the amount in pence of the dividend per share that they'll pay out - 16.8p. That then fixes the total amount of cash that will be leaving the company. More recently, as per today's RNS announcement, they've also fixed what the "consolidation ratio" will be, ie 13 "new" shares for every 14 "old" shares. To do that, they've had to assume a starting market price of the shares. As this was probably done a couple of days ago, they've used a market price which is now out of date. I think that the market price has gone up a bit in the last few days. So it might have been, say, £2-45, or something like that. If they had to do it at today's market price, they'd need to use a slightly different consolidation ratio for the theoretical price of the new shares to be the same as the current price of the old shares - it might be 27 new for 28 old, or 15 new for 16 old, or something else. It's actually a very complicated calculation, and all they can do is the best they can. They can't foresee exactly what the future share price will be, and they certainly can't control it. If you use a starting price of £2-54, as in your example, you might be "down" £188, but if you use a different starting price, you might be "up".
It's not an exact science, because no-one can predict exactly what "the market" will do in a few weeks' time.
I'm sorry I can't explain it any better. For Tesco, I put together a "spreadsheet" on the computer where I could see the effects of the market price changing, but when I look back at it now, I realise that I was over-analysing the situation for what are actually very small differences. £188 sounds a lot of money to you or me, but it's actually very small in the context of £35,000.
Regards, Mike.
.....message below should read '......pro rated equivalent of the Group's REDUCED Share Capital divided by our own fewer shares.
Firstly, thanks to everyone contributing their thoughts here as I think it's a positive example of bb's.
Like many, I am not entirely clear on the impact of the Special Div/Share Consolidation exercise on the Group's SP once the stock goes ex-div.
Simplistically, it looks as if all shareholders will still hold the same % of NWG Share capital after receipt of the Special Div. (albeit less shares), the SP should increase. In a perfect world (sic) it should rise by the pro rated equivalent the Group's Share capital divided by our own fewer shares.
It's really the opposite of SP dilution when companies issue additional shares at less than market value.
However, there is a risk the SP won't rise sufficiently to fully compensate for the reduction in our shareholding as we all know, this is not a perfect world.
All this talk about Share consolidation is today's euphemism for a Share Reduction and these exercises used to require Court approval in the not too distant past. And for very good reason.
I might be wrong, but it looks as if the Bank are obtaining their desired Capital reduction but shouldering a degree of risk on to shareholders in the process needlessly (should the SP not rise after the exercise is completed).
Mike M14,
I have read your last post, help me out here please, if I own 14000 shares at 2.54 and they are valued at £35560, then DIVI at 16.8p is paid I receive £2352. My shares are now 13000 at £2.54, valued at £33020. If I add my divi I now have a value of£35372. Please check my numbers as counting is not my strongest point.
If I am correct the special DIVI has now cost me £188, not counting the cost of repurchasing my lost shares. I thought that the idea in a special DIVI was to pass profit to shareholders, not to take monies from them under a cloak of consolidation.