Member Info for Meconopsis

“Could it be the looming tax year…”

I suspect that it’s also that the end of the tax year has coincided with Easter. Half the City is on holiday, so trading volumes are down and people are selling into a thin market.

“Why such a big drop ?”

Easter. A large part of the City is skiing, so thin trading volumes.

Retail punters are selling end of year to bed-and-ISA into a thinly traded market.

“RBC have estimated a total liability of £16 billion

So 2.4% gives a liability of almost £400 million”

From https://www.which.co.uk/news/article/car-finance-fca-investigation-what-you-need-to-know-a4eXb5u8VeBy

“Analysts at RBC Capital Markets estimate the redress bill could come to £2.5bn for Lloyds, £1.1bn for Santander, £350m for Barclays and £250m for Close Brothers.”

Saying that, Close Brothers are building £400m of immediately accessible capital - so that is probably their worst case estimate.

Personally, I’m punting £160m.

We should probably organise a sweepstake.

"Should I transfer these into the isa after 06/04, before or after ex date?"

It depends on your capital gains position.

Ideally - if you have capital gains allowance left - then sell as many shares up to the capital gains allowance on or before 5 April. This realises the gain in this tax year. If you have any gains in excess of the capital gains allowance then sell the residual on or after 6 April.

Ideally, you're aiming to get the shares in to the ISA the day before ex-dividend date.

Really useful asartara as it gives one way of sizing...

"...Black Horse (includes Jaguar, Land Rover and Suzuki) 16.1%

...

Close Brothers 2.4%

...

Lloyds has already put aside a provision of £450,000,000 towards potential costs and payouts for this."

Very imprecise, but if you scale that £450m then you get around £67m. Not the end of the world.

Lordloadsoflolly - what Beachouse says!

Listed shares are priced every second the market is open and that trading information is public.

Unlisted shares might only change hands once every 6, 12 or 18 months - and prices often aren’t disclosed. If SMT were to sell 1% of their holding then they could choose to disclose the price obtained - more public ally valuing their remaining 99%.

“The Sunday Times: Britain’s biggest investment trust has declared it will resist a push from the activist investor Elliott to sell its prized stakes in the privately owned SpaceX and ByteDance, the owner of TikTok.”

The article is very sloppy on how it presents Elliott as seeking SMT to divest itself completely of SpaceX, etc. my understanding from other articles is a desire to sell enough of a stake to be able to show the value of the holdings.

“… boxing clever…”

Recycling that old joke huh? Delivered, may I say, with panache. I guess I’ll wrap it up before we get carried away.

Me too. Sold at 397, which gave a 32% return since May.

Reading the various bits in the FT, I’d prefer a Mondi merger and - if it happens - then I’ll be back in. IP looks like too thin an investment proposition to me.

GLA.

Very interesting Lex article in the FT - https://www.ft.com/content/cd354951-cb4f-43a6-9120-86dea3ba4424 (paywall).

In summary:

- Both bids are effectively defensive following Smurfit Kappa’s deal with Westrock

- Mondi almost certainly couldn’t afford to up their offer, but International Paper’s offer is effectively only 4% above Mondi’s offer at closing share prices

- The Mondi/DS synergies are obvious and worth at least

- The International Paper/DS synergies are much weaker

The nub is that shareholders should beware of International Paper paying a premium when it is likely to be value destructive to the shares you’d be getting (my words, not theirs). The Mondi offer is much more obviously value creating.

If anyone else has FT access then please feel free to correct my summary.

A previous (non-paywall) article on Mondi/DS synergies - https://www.ft.com/content/55ffcf39-c4ae-404e-84cb-b312b456e48a

£15m buy at 16:35:04

At least 17 other trades at or around £1m+

“…their performance took a hit on the offer.”

Agreed. But/and in principle the impact on International’s share price is pricing out a proportion of the premium being offered. Acquirer shares invariably drop on announcement.

IMV rather than focusing on the “money” that isn’t changing hands, you need to view that you’re swapping an undervalued asset for another undervalued asset. The more interesting question is which of Mondi or International are more undervalued.

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.