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I can’t see this being much of a fight.
Mondi’s proposal gave Mondi owners 54% and DS Smith owners 46%. I can’t be bothered to do the maths right now, but matching or beating International Paper would effectively result in a reverse takeover - and likely decimate Mondi’s share price.
Mondi doesn’t appear to have enough market capitalisation to counter without moving to a share and cash basis - and taking on debt to do so.
International Paper’s offer gives a 75:25(ish) split and offers room for improvement given their higher market capitalisation.
Thoughts?
“SP must have been affected DLGs retrace today though ?”
The whole market seems to be in reverse today.
“… is the SMT buyback coming from borrowing or have they been sitting on a £1bn cash pile”
Part cash. Majority trimming publicly traded investments where they view immediate opportunity for growth is seen as more limited.
Trimming the publicly traded investments will skew the balance towards the private investments - up to 28%.
My view is that they have sight of an IPO, which will balance it down again and boost NAV.
“Seems to good to be true that a 5% Divi is due on Thurs”
Unfortunately, it is.
The dividend will be paid on 9 May.
28 Mar is the ex-dividend day - it means that anyone who holds the shares at the close of trading on 27 Mar will get the dividend.
Don’t be surprised that the share price will drop on 28 Mar when it will be trading ex (without) its dividend.
In theory it’ll drop by the amount of the dividend.
CNBC interview with Andy Briggs…
https://www.cnbc.com/video/2024/03/22/phoenix-group-ceo-still-interested-in-ma-but-bar-is-higher-now.html
Interesting that it’s an interview on a US-facing media outlet.
Not related to LGEN, but I thought it might be of interest - https://www.bbc.co.uk/news/business-68634968
Faisal Islam’s take on likely economic news in the Three
Key Dates section.
Evening Standard - https://www.standard.co.uk/business/phoenix-pensions-london-stock-exchange-shares-isa-market-crisis-savings-b1147089.html
The other way around. MNG has 3% of DLG.
Superficially, very little to not like.
I agree with Trek that a bid is likely with this level of certainty. I’d imagine, though, that major shareholders will want north of 40% premium based of that level of certainty.
Https://www.thephoenixgroup.com/media/byypjb0l/phoenix-group-fy23-results-presentation.pdf
CSM on page 17 - being generated faster than released
Cash release page 43 - needs analysis
Currently between back squat sets! Will look at properly over the weekend.
Reuters via Apple News - https://stocks.apple.com/A-CHXCVktSg25SzCCiLzc4w
“ British insurer and asset manager Legal & General (LGEN.L) has shelved a plan to obtain a China business license and more than halved onshore headcount, two sources said, joining a list of global financial firms scaling back in an uncertain market.
Legal & General (L&G) had been planning to apply for a QDLP (Qualified Domestic Limited Partner) license that allows foreign firms to sell offshore products to Chinese investors as part of its asset management business push, said the sources, who had direct knowledge of the matter.
The company, with 1.2 trillion pounds ($1.53 trillion) worth of assets under management globally, has shelved that plan now and, as a result, last month cut its local team size to two people from around 10, they added.
The remaining two will focus on the firm's existing business of managing Chinese institutional investors' offshore assets, said the sources, who declined to be named as they were not authorised to speak to the media.
L&G did not comment on the business license shelving or the job cuts when Reuters sought a response but said that China remained "an important and large market opportunity for asset management over the long term".”
…only dumb people.
Looking at the trading data…
# Trades 1,466
Vol. Sold 542,567
Sold Value £2.14m
Vol. Bought 238,889
Bought Value £925.60k
How does a majority of sellers to buyers result in a 5% gain…?
“2023: £355m (2022: £129m)
So they've added £226m to the long-term profits pot (equivalent to 9.5p per share). I'm happy with that as it provides support to the dividend in the long term.”
The devil’s in the detail. You need to look at page 28 of the accompanying slide deck.
The overall CSM is DOWN, not up.
They added more to the pot than last year. But also took a £600m(?) (sorry - writing this in Waitrose car park whilst Mrs M picks up some stuff!) mark to market write down.
I suspect that most of that is commercial real estate and ground rent exposure where they’ve taken a £200m write down.
I’ve not had a proper look yet, but these are the type of results that need a really good looking over.
Interestingly, no mention of any Customer Duty stuff as they have exposure in Wealth and the historic investment book.
As I say, the results need a VERY good read.
“He didn't waste any time selling £200k worth.”
It’ll almost certainly to cover tax.
"Thefrogster : let's find a meeting room to have a breakout session."
I'll bring the flip charts...
“Personally, I do not find these words reassuring. ”
Then almost certainly isn’t the investment for you.
Personally, I take a view that management team are doing prudent things in recognition of a near certain risk.
What more could you ask?
I think that’s more interesting than what’s said is what isn’t said. And what needs to be read between the lines.
I find it interesting that Lloyd’s, who probably have the biggest exposure to compensation, have chosen to provision £450m. Yet Close has stated there being no need to name a number at this point.
Management will have their best / middle / worst case numbers. So why not put them out there?
My view is that building £400m of immediately accessible capital signals the worst case capital requirement to cover compensation; remain solvent and not require a rights issue.
I also suspect that the FCA, PRA and government have no desire to force a UK bank into a rights issue over this issue. Just think through the consequences investor confidence.
It might be ok for Metrobank to be a bit doddery, but the bank that owns the investment company that issues UK government debt?
I think the worst case numbers here are overblown and the shares oversold.
The material impact on profitability is almost certainly a direct consequence of taking less profit on business to make capital more immediately accessible.
You’re right that this is going to hang over the shares for a while. But, as the knight in Monty Python would say, “tis merely a flesh wound”.
Completely agree Slikoil - apologies I misread the intention of your post. Rereading I’m not entirely sure how 🤪
The key thing is that “the number” should be relatively straightforward to size and provision for.
"The Consumer Duty does not apply retrospectively."
Correct.
And/but there is now a duty to apply it to in force policies. So, revised charging would need to apply to those policies going forwards.
Full story blow. Apple News link to original - https://stocks.apple.com/A8F0v0ZQfQTmf4HiFdfm1qA
Britain’s largest pensions firm is to set aside £70 million to cover the cost of reducing customer charges.
Phoenix Group, which manages £269 billion in assets, is expected to report the one-off provision when it releases its annual results on Friday. It will cover a cut in annual pension charges across old funds, and other customer support measures, to comply with the Financial Conduct Authority’s new consumer duty rules. These will start to apply to off-sale or closed-book financial products from July 31.
All investment and asset management firms are facing questions from investors on the possible impact of the duty on their fees and bottom lines. Tom McPhail, at financial adviser The Lang Cat, said: “[The] duty is a significant and immediate challenge for all firms with closed books… and Phoenix is one of the biggest.”
The company’s legacy, or heritage operation, which has been built on acquiring old life and pensions businesses closed to new customers, runs more than 3,000 savings and life insurance products and has £119 billion in assets. Many of these old accounts, held by nearly five million customers, were opened as long ago as the 1990s.
While modern pension charges have been capped at 0.75 per cent a year since 2015 by the government, older pensions can be much costlier. At Phoenix, hundreds of thousands of customers with old pensions are paying over 1 per cent a year, and more will be paying between 0.75 and 1 per cent.