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Totally agree. Check out the recent Whitbread/Costa debacle. Nearly half a billion wasted in SBB to very little effect because the market now views WTB as mediocre hotel owner - as proved in the lastest results.
Who knows? A reasonable strategy is to operate the 20% stop loss rule. But however, it depends on your personal investment strategy and target ; capital growth or income or bit of both? I got into Shell for primarily for income some time back and paid circa £20 ps. I've received over £10k in divis and it's has never dropped lower than 5% which is a megga deal compared to banks. I will get out when my original capital is threatened or divi drops to near 'bank levels'. As corporal Jones said 'Don't panic, don't panic' YET!
The share price, as always, will be driven by market sentiment. If a company sells it best asset and profits deteriorate etc no amount of share buy will help the share price pro rata. The price deteriorated during the first buy back programme and now It's lost 8+% in two days - thats what the market thinks!
Anyone who bid 2% over strike will not receive owt but obviously, left with their holding intact. There will be no further 'divis' etc - the lottery was over subscribed..... probably too many wanted out!
Your concerns must be shared by thousands of shareholders.
This should have been called the Whitbread Costa lottery because you will have to take a gamble on selecting the correct option. This is unfair. this should have been organised whereby, no matter of your expertise in share dealing, WE ALL SHOULD HAVE RECEIVED THE SAME 'DIVIDEND' and a share reduction ie 6 for 10. At this stage the board have wasted £400+ million on a buy back and (probably) millions on advisers and brokers devising this utterly appaling mess.
First, re your last para. The several tender options where set by Whitbread not by a broker. So, your broker is breaching the terms of the offer.
Your broker should have sent you the full offer details from WTB which contain a detailed description of the 'Strike and VWAP'. But if not, you can get a copy from WTB.
The final prices will be calculated on 19 July 1pm based on the preceeding period market prices.
The options have overriding caveats to safeguard over subscribtion.
No one can give you firm advice other than to say; if you think the hotel business will grow and deliver profits then keep all of your shares. An umbrella approach is to keep some and go for a couple of options - sort of an 'each way' bet which is what I have decided upon.
After the shambolic way the board have handled the 'costa' affair, I take back all my criticsm of Theresa May. In comparison, she is a financial genius.
Based on my past experiences with tender offers, my interpretation is WTB will purchase your shares for no more than £50 per share which based on todays price = 'profit' of £3.61 = 7.8%. Thus price rise today. This proposed offer has to be approved at the AGM. I will not vote for it. However, if it's voted through and the offer is not fully taken up then they will move to phase 4 and probably redisrtribute the residue via a 'spec divi'. The initial two methods are more tax efficient for possibly the majority large shareholders
to 50glass; I may be a bit thick but I've ckecked 'investors' web site but can't find where it's 'all explained' especially anything about returns (special divi) to shareholders. All the info I can see is what we already know re German Hotel expansion (video). Any chance of instructions please?
Will someone tell the boneheads in thrie bubble world that this buy back busines is wasting our money. They purchased £1.8 million yesterday alone- so far, over the last few weeks - results - rubbish. It rarely works unless of course your part of share options schemes - oh yes please...
I think the '£50' quote was in relation to share price not spec divi.
My View; The aveargage capitalisation over last 6 month + £8.7 billion. Costa's value within Whitbread is 45%. The company has sarted buy back programme. The pension top-up plus expansion prog is an undefinable aspect. 'Jam tomorrow' scenario... I believe the share price will go to £32-34. So anything less than £12 spec div cannot be viewed as 'rewarding' shareholders etc etc.