Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
IP share price now $35.33.
So $35.33 x 0.1285 and divide by exchange rate of 1.24 suggests to me that the bid is (at this moment in time) worth £3.66 per SMDS share.
Yes the market maybe thinks (or hopes) Mondi will come back.
Or maybe that the IP share price will increase (due to the "synergies" of the combined company?).
Or maybe not enough people have bothered to read / understand the terms of the offer and think it is for £4.15.
It's quite an interesting situation - I have made my risk/reward decision, good luck to you all in making yours.
Chaps,
The headline "offer is for 415p per SMDS share" is bol***ks.
It is an all share offer, which will go up and down - presently, based on IP closing yesterday of (less than) $36, it values our shares at 371.8p each according to my calculations.
I have consequently sold £50k SMDS this morning.
Of course if Mondi come back I will have egg on my face.
Good luck to you all whatever you decide to do.
Previous posts provided an interesting discussion regarding DCF analysis chaps, my take on this for what it's worth.
Firstly valueinvesting (269p) and Simply Wall St (202p) are just silly as they are both based on 37p eps which is the preadjusted figure excluding extraordinary items so their analysis is worth nothing.
If we believe the CFO then €3.3 billion in free cash flow for FY24, given approx 27 billion shares equates to €0.12 per share, or £0.10.
Do your own DCF, or plug this into moneychimp, select 0% growth for next 5 years and 0% thereafter . This gives a DCF calculated fair value of 90p at an 11% discount rate, or 133p at a 7.5 % discount rate.
(What discount rate to use is a moot point. Wish I could get 11% reliably, but for comparison, Goldman Sachs predict a FTSE total return in 2024 of about 7.3%.)
So the TLDR is that purely on a simple DCF analysis VOD is presently well undervalued.
But maybe I'm just being optimistic - DYOR and good luck!
Grumpy
Hmmm yes I think it did..... its no wonder I'm a grumpy old man
Rumours? My brain is unreliable these days but my memory is of TWO takeover offers, one from MGM and one from Draft Kings (I think), both well over £22 and both rejected by management as being far too low and materially undervaluing the company !!
And they had to pay well above the ask price to buy in this quantity...... yes interesting
Etotheipi,
Yes, earnings per share 12.54p for the half year.
However, 7p is only the interim dividend.
Annual figures suggest EPS of about 25p, and against annual dividend of 24p last year indicates dividend cover of only just over 1.0, so not so good.
Grumpy
Lukee, Alessandro, yes, sort of (ref RNS 17 Aug). I believe he was able to exercise share options at that time (these based on performance aligned to total shareholder return) and shares were sold to meet the cost of purchasing the options. He has a lot of shares (more than 20 million?), so one would hope a strong personal interest in maintaining a decent share price.
Terry and LochinvarLass,
Thank you for your posts.
I too have made use of the HMRC tax SA calculator in the past, as it sometimes seems the only reliable way to determine out how the tax system works in certain instances!
Maxed out on ISA and SIPP which of course has to be first choice for most shareholdings. For remaining investments I have up to now tried to hold growth rather than income shares when outside of ISA/SIPP, in order to make use of the £12k CGT allowance, but as we know this is all changing...... and not in a good way.
So feeling rather jealous of your plan to up sticks, leave HMRC behind and move to the sun Terry.
The Grump
Terry,
Many thanks. I am with HL (which I consider a little expensive, but have provided a decent quality service).
As my dividends now take me into the higher tax bracket I take it from your answer that after completing the SA foreign income section I will have to pay (33.75% minus the US tax already paid of 15%), thus 18.75% to HMRC on my DEC dividends. Thanks
The Grump
Friends and Scholars,
Back to the tax issue, I hold this share outside a SIPP or ISA and I understand I will be charged the 15% US withholding tax on the dividends. My question is, can I claim a tax "credit" for this in the UK to offset against UK dividend tax (which I pay at 33.75%), or do I have to pay both?
Many Thanks
The Grump
Hi Trek
I'm not one for conspiracy theories but I have to agree that the price movements for this share are somewhat odd. I too have had difficulty making purchases and your comment that "It’s almost like the short is being used to get the price down for the buys" does remind me of the infamous Hound of Hounslow (the autistic teenager who managed to manipulate market prices in the US to his advantage from his bedroom in his mum's house in London).
https://www.bbc.co.uk/news/explainers-51265169
Regarding PAY of course I couldn't possibly say but it is odd that Director buys, a healthy and increasing dividend and even a very robust trading update, aren't enough to halt the slide in the share price.
Hopefully it will come to a conclusion one way or another and we'll see the share price eventually move up very quickly to a more realistic 600+.
Usual caveats