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Should be back over £1 shortly.
I'm holding at an average of 79
So I'm in profit ATM
Do we think we'll see other parties putting in offers ??
Meanwhile .... Glad the shorts got some pain
How are you calculating cheap? Based on what they were worth pre pandemic?
Are the shares still cheap at 80 p ?
Are the shares still cheap at 80 p ?
I think the key thing is to not think about this deal being worth 80p. It's not, it was just the value based on the NEX sp when the proposal was announced. With NEX at time of writing 242p the deal is currently worth 87p - and it will keeping changing before any merger takes place and afterwards (assuming it happens).
What it boils down to is do you think the combined company will prosper so that this 87p's worth will go up enough to make it worth holding or is it better to take the money on offer now - i.e. the current SGC sp (84p at time of writing).
For me it's straightforward as I hold both and feel the combined company will do better than each would on its own but everybody must make their own choice - just try not to fixate on the 80p.
In the meantime because the deal is expressed as a percentage of NEX shares the SPs of each company should continue to move broadly in line with eachother - so long as the deal looks likely to go ahead.
Yes if you're holding both as you already knew you wanted exposure to markets outside of UK
It's the theory why Prudential split in two they realised either investors wanted
- high growth asia
- slow and steady UK (divi yield)
There weren't many who wanted a mix of both
Split it apart and the two bits were worth more as investors who previously sat on the sidelines bought the part they wanted
This is just reverse ie a combined scale will outweight investors who might want a pureplay story (stagecoach investors). NX investors already know they get a mix (but obvs the mix moves more to UK than previous)
but if you're already holding both, is that theory less relevant?
Ok some seem to think no so I'll explain why answer is in fact "yes"
Atm you hold just shares in stagecoach. Stagecoach is a pure play UK bus operator. NX (not a business I know too well) makes a lot of it's cash in USA
So if you think "I want to bet on the UK recovery but not so sure about the USA market" then as things stand stagecoach is a great investment for you
But after the deal it's no. As post deal 75% of your holding is tied to a business which earns a chunk of cash in USA (and other places)
The thesis of what you're investing in has changed
I think you've got it about right, they have made it somewhat complicated, and as you said if you're planning on holding (as i am) then it will be like walking a tightrope trying to sell one or the other on a rise, because for you to make a profit on that, i think one has to go down and the other up, and as it stands i think they'll both mirror each other for the moment, still a away to go with this yet, although they seem to be a long way into the process as someone said, if they are picking board members for the potential outcome, that said, still got regulatory hoops to jump through, so plenty of time for the dust to settle.
this is the thing, my recover target price mid term was 1.40 so with that in mind this seems somewhat low, equally, the nex SP is also well below where i thought it would recover to, so we'll make on that as well. Also, both shares were dividend payers before covid, so there is that angle to consider for what it's worth.
that said, the way they've structured the deal, it does take out some of the fluctuations in the nex share price i think, by valuing it at a percentage of a share rather than a fixed value.
Is the ratio 0.36 with Nex is based on pre Covid price. Nex was circa 450 pre Covid and SGC around 160 which works out to be 0.36. I guess this is the really good price and hope the deals works out.
When they are already strongly hinting on make up of board you have to assume the deal is done.
Would be great if not and there is more interest but unlikely now, no?
Anyway great day so far! GLA
So am I right in saying that we should keep an eye on the NEX share price because if that is rising then ours is likely to rise too ? Given that, as it stands, we are linked at 0.36 of the share value. Trying to do the maths here.
My average at SGC is 96 but I'm wondering whether to hold on and not bail out if my losses are recovered.
I'm well in red on Nex so different posistion to you but I will hold out for a better offer for SGC then sell and keep Nex to get my losses back
Agreed, it's a derisory offer in my opinion, will hopefully trigger a counter offer. There are plenty of VC companies in US with money to spend.
The share price on this stock is far too low even at this price it should be 1.20 at least
Well if you're bullish the sector then why not! I guess this is a win win for holding both if you think the synergies are tangible
@jcb208 what's your thoughts holding both, just let it play out and take the new nex shares, or try and sell the stagecoach ones on the spike, or sell both on a rise ?
i'm nicely in the green on both so don't have the concern of being down on them
and i have shares in both !!!
Exactly danl90. I'd rather have this offer than, say, a 90p cash offer. Both looked to have good growth opportunities on their own, together they should be even better.
To be clear for you all
Your offer isn't 80p it's 0.36 shares in NX. Whatever the NX price is x0.36 and that's your offer
The point here is people will do the maths to see what the combined group is "worth" and you then have 25% of that
This is why both share prices have gone up as it's an all paper deal with lots of synergies so the value of the combined group should be a lot more due to the savings
Add to that as you all have said "growth" and general "share price recovery" (for both) and you should see turbo charged returns
I am just wondering if anyone else will come out to play on this one? - around the 80p mark still puts SGC in bargain basement territory imo - in light of the Morrison's saga and the fact that there is plenty of money in funds out there looking for a place to find a home UK companies are there for the taking atm - let's see what happens
gla dyor etc
nearly 19% up so wiped a lot of my loss out,still going to hold for better offer
It's "low" as national express share price is "low"
It's as it's a paper deal. So you have to look at how much you will own of the combined group and what that will be worth after synergies etc