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Apologies to all.
The BVS ex dividend date is before completion so the new value for GFRD completers is 616 plus 150 rump = 767 which is 30p HIGHER than today's SP.
I was very surprised with the overwhelming approval for this deal. I expected it to pass (75%)but not with a near unaminous vote. Studying the BOVIS RNS Nov 7th , Bovis will partly raise money for the sale by issuing approximately 13.5 million new 50p shares on the day of completion. Existing Bovis shareholders will be compensated or rewarded( depending on how you look at it) for this dilution by the issuing of approx 0.038 50p new BVS shares per existing share held. This takes the place of the anticipated 50p bonus payment per share. For GFRD shareholders completing, this means that allowing for this dilution, which is approximately 10% , they should receive 1115 (diluted price at completion) x .574
= 640p using today's BVS SP. Then of course, the value of the rump is open to debate but 150p may not be unreasonable which equates to a final value of 790( 53p increase on todays SP). The new BVS shareholders will also not be entitled to the Upcoming BVS 41p dividend so this should be deducted from 790 and now you are more or less where you started. I can only imagine that the rump SP will be very volatile as some investors will offload and take the profit . With the new co having a profit of £11 million and dividends covered 3x( very sensible) this new company could easily slip into loss and for sure will not pay very much in the way of dividends. There's the risk..but hanging on could reap rewards if there are no more mess ups.
The new diluted BVS share price could also go up if we get a favourable political resolution .
One thing for sure, GFRD shareholders will no longer receive the high dividend return for their investment and the chance to reciver to 900 plus. However BVS will have a very secure platform to grow substantially in SP with areasonable return to boot. Do I regret bailing out? Very possibly had I not immediately invested my money elsewhere which to date has even in a short period of time ( certainly more luck than judgement!!) , made up for my losses and now gives me a 6.5% dividend return for my retirement. I wish all of you 'remainers' a very profitable future.
I see your point and wish you well, GoldAnOil. The low entry point I am referring to is simply the break even entry price for a new investor . This is just my opinion. The SP has risen higher than I expected and is perhaps politically driven or maybe the upcoming vote is the reason . This could is an indication that the sale will happen and the market likes it. So far
I appear to be mistaken. The true result will only be known post sale. Anyway I will stand aside for now.
I am one of the many who is of the opinion that we have been duped. Please read recent posts on ADVFN which concur with my opinion. Just think about it all of you... and please don't forget roughly 90p will be wiped off each of your post sale BVS shares in the months to come. This equates to 595 plus the rump!! And the rump will be a needless, risky standalone investment . The GFRD board of directors have given us no guidance but most importantly NO DETAILED PLANS OR PROJECTIONS REGARDING HOW GFRD AS A SOLE CONSTRUCTION COMPANY WILL MOVE FORWARD. ONLY A LOT OF HOT AIR SAYING THAT A RECAPITALISED CONSTRUCTION ARM IS NOW IN A GOOD POSITION TO PROSPER. WOW! YES ,WITH A 1% PROFIT MARGIN WHICH WILL BE EATEN UP BY SKELETONS IN THE CLOSET! YOU JUST WAIT!
This is indeed very suspicious. Given that the AGM
votes were consistently passed @ 75% average, this is sadly a done deal . The instutions have won again and I very sadly predict private shareholders who go along with this charade will all pay the price.. believe me you will.
HL sent me a letter regarding the upcoming vote because having sold 70,000 shares, I kept 48 . Please don't ask me why....
The advice given is that the combined value of Bovis and GFRD shares post sale should be about the same as the value of your GFRD shares pre sale. Using today's BVS and GFRD share price at the close of business today this makes the rump worth 39p. This calculation does not into account the 90p dividend that will be paid by BVS post sale which existing GFRD shareholders will not get thereby reducing the value of the composite holding to 617p. So unless you have a GFRD share average of 617p you are , in my opinion, deep trouble. In fact anyone who has not sold by now may be taking an unnecessary risk. Needless to say I voted against the deal . GFRD private shareholders have been kept in the dark ..the few major institutional shareholders in the know are preparing to stitch us up and are patting each other on the back. If the incoming government ,
especially Labour who intends to build hundreds of thousands of council houses, invests in major infrastructure projects then maybe the new shares will rally. But so would good 'old fashioned GFRD' giving us a far better dividend payment than BVS and 'new' GFRD combined.
Was away for the AGM. The RNS makes for boring reading with the usual voting results. No press coverage yet....or maybe hushed!! Sp continues in an ever so gentle slide which is usually at a faster downward pace than BVS. I am beginning to think that this is a 'done deal' and non institutional shareholders have been stitched
up by the city. There is a political volatility that we cannot predict. For instance GFRD was trading at 688 but the moment the news broke that Farage was not going to field Brexit Party candidates in 317 tory seats it shot up to 715. If the deal falls through the SP could in theory drop slightly but should recover as investors like me pile back in. Let's face it , GFRD in its present form is a reasonable bet! Then a couple of weeks later if there is a conservative majority the SP will rocket. Non company events will come and go causing sharp rises and falls . The trick is to not to get too caught up in them and take an objective view. From where I am sitting I thank my lucky stars that I am out for the time being.....even at a loss!!
AGM tomorrow. Some hard questions will be asked. I look forward to the responses some of which will be downright lies. I note the SP is slipping gently ........
An interesting take. I am aware the ft predicts a 105p dividend for Bovis next year but I have my doubts and it will not be first time the ft predictions have got it wrong. After all , on a lesser scale , the ft predicted a 66p dividend for GFRD earlier this year and we arrived at 58p. I am working using the present yield for my calculations which is a form of stress test in itself. Regarding the predicted BVS share value I note on average it is not as good as what some press officers would like to have us believe with some brokers even recommending selling. As for the rump what I wrote is a brief , if optimistic summary of predictions taken from various articles in the past few weeks. If the past performance of the construction side and the integrity of the GFRD management is anything to go by I will go so far as to say that the assumed 10p dividend could be a one off! One could simply sell one's GFRD shares now and buy BVS shares if the synergy of the two companies appeals thereby effectively removing the risk of owning any shares of the rump should the deal complete. I hope for the sake of present GFRD
shareholders the drop to 703 is due to the 2.8% discount you mention. I see it falling further so in the meantime I will watch and wait, hoping that this deal does not complete and that Prothero is blackballed as a the man who shirked his fiduciary duty to loyal GFRD shareholders .
Mkx007, my reason to bail out is based on a very poor opinion of the way GFRD has repeatedly been economical with the truth especially with regards to the construction side. I see very little value attached to the rump and no amount of press will convince me otherwise. The margins on construction are wafer thin and the political outlook is uncertain. The SP continues to drop with the odd upward blip, rather like someone drowning and bobbing up for air. My threshold for rebuying is at about 610 and with GFRD being quite a volatile share..who knows!! ?? Should the sale fall through with GFRD priced at about 610 there could be a sharp rise as income investors pile back in. Maybe this is a 'la la land' prediction but haven't we shareholders been told enough fairy stories?
Hi Jonstep
I am afraid your estimate is incorrect.
Let's say you have £100,000 worth of Galliford Try shares today. At the current shate price this equates to 13,812 shares yielding £8000 pa.
With this deal you will be hard done by.
You will get .574 Bovis shares for one GFRD share.
Therefore you get 13,812x .574 = 7928 Bovis shares. Currently the Bovis share price is 1130.
90p will have to be deducted due to special dividend payable to existing Bovis shareholders
making the value of a Bovis share 1040 after this dividend is deducted.
The value of your Bovis shares will therefore be
1040x7928=£82,451. Your dividend yield will now be only be about 5.8% of £82,451=£4782.
Regarding the £300k. This will be used to reduce debt and from what I read there could be a £150/100 million surplus. If this surplus was given back to shareholders expect 135p /90p respectively. If the rump remains in profit I read a 10p dividend could apply.
Your 13,812 GFRD shares would then yield
£1,381pa. The value of your GFRD shares will be
£18,646/£12,430 respectively.
So at best you have a portfolio of 2 companies with a value of £101,097 yielding £6163pa.
If you rely on dividends this is very bad news especially because the GFRD yield could all but go with one nasty exceptional cost.
Your Bovis shareprice could increase, along with the dividend due to the synergy of Linden Homes and Bovis Homes.
I was a long-term shareholder enjoying a very good income but have totally bailed out at a loss.
I cannot understand why there isn't more written about what a poor deal this is for shareholders and what an excellent deal it is for management.
Prothero will leave behind what could be a sinking ship and will then follow the money all the way to Bovis. The way things are reported so far it gives the impression that this is a done deal. I am not so sure. The shareprice should be higher. Shareholders have been left in the dark
re future strategy and projected value in the rump. Simply extraordinary! The forthcoming AGM
will shed more light into this matter. If this deal falls through I will reinvest.
Bovis is bad news for us. For those of us who invested for income it would mean a severe drop in dividends . I am surprised that there are no further comments relating to Prothero's devious strategy of selling the crown jewels and following the money. With £300k going to GFRD this is a thinly diguised forced rights issue. I was a long time holder of GFRD shares but sold out once I realised my income would drop considerably. Let's face it, even a recapitalised GFRD is at best going to scrape the bottom and at worst will continue with its downward trend with exceptional items being announced periodically. The release of the RNS
was timely and I await the outcome of the forthcoming AGM. Prothero will have some explaining to do. As you all know, as private investors with a 12% collective vote it is up to the institutions to decide whether they like this deal.
There may be an argument for the synergy created by the combination of the two housebuilding sections. The counterargument will be the anticipated share value of GFRD post sale. I will sit back and watch. If the deal fails I will reinvest.
This is worrying. What does this say about the anticipated health of the remaining company? Prothero has an ethical duty to look after the company and its shareholders in these troubled times.He is bailing out , leaving us in the s---s. It is now crystal clear he does not want to have anything to do with the rump, post sale if it ever happens. There have been other defections over the past few months as well. This deal shafts the shareholders as we are unlikely to see any of the 300 million. The AGM in November will be sparky!! I hope this sale does not go through to teach him a lesson. We should then sack Prothero !
The share price has mainly risen due to politics
and the hope of a deal. If the withdrawal agreement is not passed GFRD will go down again.
Yes indeed, Nicktheglobe. Apologies , all time high within one year is what I meant to type. Even if Mr. Johnson strikes an agreement with the EU, not enough Labour MPs will support it because that would jeopardise their chances should an election be called. This rise could be short lived. However it may not drop too much as the Benn act will most likely force an extension. I was reading in the Times that should a deal be struck, the ftse could rise 10% ..well Galliford has already
risen 13% ..you think it could go that much higher? Let's see.
KARV1, if you sold@ 680ish I am sure it will go lower. Don't forget , the Bovis finish price x.574 = about 683
and Bovis hit an all time high. Its simply not sustainable . Its a knee jerk reaction to the possibility of a deal. I sold about 66% at 712 average 4:25 pm and kept the rest to cover a chance of a rise.I have been trading GFRD for years and almost without exception these 13% one day rises never hold.
We may see you back. All the best
And get .574 of a Bovis share yielding dtamatically less
What announcement? Of a deal or no deal? The deal is thievery. I live off the dividends and providing Gfrd does not go bust I am much better off with no deal. It is now below the level before the announcement. That says it all. IMHO its Brexit that is causing the worries. Bovis close x .574= 608 funnily enough. The rump has to be worth something if 300 million is ploughed into it
So it depends when you got in.....
I read this to my 8 year old boy and he said NOT FAIR DADDY!!!!!
I actually spoke to the Galliford Try shareholder dept today after waiting weeks for the call. During the long conversation I was informed that this agreement is a long way from being finalised. The major players are very much in the loop but Galliford would not disclose the institutions's positions . I made it clear to GFRD what a bad deal it is for shareholders like me. I mentioned the £300 million which by rights should be ours but the representative kept going on and on about the merits of bailing out the rump, very much trying to sell the deal to me saying how well capitalised GFRD would be post deal. There was also a scent of other problems coming up ( which we don't know about?)which would then be dealt with with the £300 million. Maybe the company is in more trouble than we think.
If the sale does not go through we may be in for more surprises but personally I would rather the the risk . What is plainly obvious is that we won't see any of the cash as the deal stands at the moment.
That concurs. Say £250million to break even then
£50million left over plus £100 settlement and it's
£150 plus. With regards to the 'back when it was rejected Sunday Times article 'all I can say is be careful what you ask for!