Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
No further suggestion a deal is imminent…..we could be surprised tomorrow but looking less likely by the hour.
Certainties for tomorrow
AUA will be down and will cause a drop in fee income and profits.
NCCF will be positive…showing this is going to recover with markets generally.
You are welcome…..
Let’s see if the rumours grow in the weekend press…and what the results are like next week..
Thanks @Jatw & Grapeboy for your thoughts... Much appreciated...
The press speculation is vague although specific to QLT.
I would expect NWG to regularly review possible targets and I would expect MNG, STJ, SDR, HL and others to be on the list….with banking being more online self service maybe a large self service platform makes sense….HL is down 65% from its high and 50% of its 12m high….perhaps even more of a bargain than QLT.
Are we about to see a bout of mergers in FInancial services? A chill wind is blowing reducing fee income and there are too many mid sized firms that can be purchased for 2-5bn and more that could merge below 10bn. The bankers and directors will be back from their holidays in early September, that is when the ideas may come to the fore.
Having very recently de-merged from Old Mutual and spent the time since re focussing the group into a very UK focussed wealth management specialist and having bought back 14pc of the shares even more recently for an average of 142p, there is no way this company would be let go cheaply. If someone wants it I would imagine it would go for more than 150p. I bought more shares at around 150 thinking they looked good value then based on growth being achieved and costs being cut. It’s beyond me as to why they dropped as low as they have, but clearly there are few buyers around at present for any shares like this one in asset management. But that’s surely /hopefully temporary. The last thing the management will be looking for after all their last 4 years work is to hand it to NWG cheaply.
The need to hold capital means there are few cash takeovers unless there is a material size difference or unless the bidder has sold another operation, eg ABDN recently paid 1.5bn to PE for Interactive Investor…quilter is relatively bite sized for NatWest (less than 10% even at 150p, the special dividend NWG is paying is about 125p for quilter, so it seems NWG can afford to splash the cash). Someone like MNG has £400m of its share buy back it could cancel and it might be able to muster a few hundred million more but would likely need to offer shares and some cash…to get to the 2bn of a 150p bid…..but they could team up with PE and inject MNG Wealth assets into an enlarged organisational unit. Lots of possibilities and no offer on the table…..those buying today may get lucky with a quick 20% gain but may be left with having to sell at a loss.
I think that's a fair assessment. I really hope another party steps forward, is there much history of other suitors stepping in regarding mergers in this sector... First time I've dipped my toes into wealth management...
I reckon A knock out bid at 170….that is the price it was at 12m ago. No one at QLT would complain at that, but NWG might be accused of overpaying.
Or a cheeky bid of 140-150 with the directors negotiating it up 10p for a recommendation. Probably leaves everyone happy.
It depends on whether Quilters advisors can convince NWG there could be an auction that they want to avoid. A consortium of PE and a competitor may offer the highest price.
I'd be interested in what others investors here, think would represent fair value here?
Lloyds did have a lot of surplus cash after cancelling they're dividend ...I was on for £900 divi until uk government told them to cancel the Divi.. Ouch lol.. Jatw did however say that it might suit Natwest better to compete with the other banks..my thoughts right now are £1.20 I ain't voting for that. Hope it increases with a firm offer...
Lloyds just bought Embark Group last year for £400m and are also building their Landlord business, Citra. I don't see them being contenders to purchase Quilter, but who knows? Anything can happen.
I certainly think quilter has built a decent wealth management organisation with excellent distribution capabilities. NWG is lacking in this space compared to LLoyds and other UK centric banks.
Not sure where a bidding war is going to come from….Barclays has not shown signs of being interested in UK over its investment bank, hsbc has China issues to resolve and a small UK deal is insignificant to them. Santander probably not in the market…..then you go to competitors who are not as cash rich as the banks, MNG would probably like a share deal as might LGEN or AV. Not sure PE can make it work as they would need to buy and merge other operators….
The BOD will need to get NWG to match recent highs of 150p or more otherwise they risk a failed offer.
Would you take NWG a shares over a cash bid?
@Jatw I think you called this months ago... we are up to Circa £1.20 at the moment. I reinvested my Capitol return back into Quilter.. I hope there's a bidding war I'm with you £1.60 minimum...
Private equity firms including CVC, Bain Capital and BC Partners have also shown interest in the FTSE250 group in recent weeks, the sources said
NWG could do worse than spend £2bn on Quilter.
They can have my vote at £1.60.
One thing is for sure £1 is way too low for the distribution capability of quilter…..HY results are next week should there be an agreed offer I would expect it on results day.
Interesting time... I'm not the only that thought this was possible, must admit I thought it would be lloyds... let's hope someone else joins in...
This share is joke.. Next time any share I'm invested in states they want to return capitol to they're shareholders I'm selling immediately.. lesson learnt..
Only based on management presentations the dividend has been based on the ongoing business and the capital return is the cash from selling the back book and the international business.
The share consolidation should have resulted in a share price of around 140. Other wealth managers have also fallen recently driven by the effects of inflation o reducing investments by new and existing clients….and prospects for higher taxes doing more of the same and higher interest rates affecting bond and equity prices. Hence they have gone from being the in demand part of financial services to potentially overvalued. My opinion is that investments are sticky with groups like quilter. The yield is likely to rise but driven by dividend rises rather than a price fall……but who know what the global outlook will be in a year or so. It looks difficult for a while with US China and Russia causing issues.
Doh!, think I have had to many senior moments recently
Just revisited my shares on this one and reread the detail of the share consolidation
“”Record time for entitlement to B Shares and the Share Consolidation in respect of Existing Ordinary Shares
6:00 p.m. (UK time) on Friday 20 May 2022””
Now much happier having received a unexpected bonus payment of the share consolidation ??
Anyone have any views if this share will see any growth in eps and maintain dividends?
If it’s any consolation, I made the mistake (albeit only a very small starter purchase sub 500 shares). Or rather didn’t do full diligence before buying in April so missed out on the 20p capital return.
heyho! Years of dividends to come but with less shares, hopefully dividends will increase accordingly and still a buy opportunity at this low level.
Same situation with Aviva but good that I held them long enough to get capital money and reinvest for higher £ div cash
"Expressed as a percentage, the reduction in the number of
Ordinary Shares as a result of the Share Consolidation is
broadly equivalent to the percentage of the Company’s market
capitalisation which is proposed to be returned to
Shareholders under the B Share Scheme"
Cheeky bastard. With reserve split I assumed new share price would adjust from prev close of 121.9 (not 118.88 my bad) to 141.19. Why make it complicated and not just use the proceed to for buyback program. Still too many to learn from investing. Had owned shares of this company from Jan 2022. Still not impressed. Annoyed how this stupid exercise will will affect my dividend allowance.
@Theosus
You mean 20p special dividend? Well that equates to the share shrinking by 15%.
Company's market cap pre-reserve stock plit was 1.96 Billion. Post-split, mcap now stands at 1.67
again, where's the proceed of the sale went?
Today there is no value gain, but the theory is that the dividend value will remain similar but be approx 15% higher per share. This is expected to result in a high share price or a more attractive yield……
The alternative while still distributing the cash would have been a special dividend which would have reduced the share price by 20p. Dividends on the shares would remain similar with performance related increases only.
There is not much difference because the cash has left the business and been paid to shareholders……you can choose how to reinvest it….or management could have kept it to spend on M&A or a fancy new head office…I prefer to squander it myself….
What effectively happened Im forced to redeem 15% of my total holding leaving me with 15% less share which would affect my future dividend income.
Quilter pre-stock split have 1.65m outstanding share closing at 118.88.
post- stock split it now have 1.41m outstanding shares and share price remained the same level. #
I still failed to see where the £325m sale proceed went. If anything, this stock consolidation have put all holders worse off.
You can certainly bet that the shares consolidation, doesn’t benefit the share holders!!
BW’s,
Hulvard.