Member Info for Poleaxe

I don't hold but if I did I think I'd have sold on the rights announcement. Then wait and see if I can buy cheaper ex-rights. Given the scale of the rights issue (holders asked to stump up 1,182p per share currently valued at about 770p) I think it's possible the ex-rights price will drift below TERP and some people will tail swallow (sell some nil-paid rights in order to fund taking up the remaining rights). If you think you'll be able to buy below TERP next week I don't see the point in holding tomorrow night for the rights entitlement, other than sparing the cost of stamp duty and broker fees.

However, I'd also question if I really wanted to buy into a company that got itself into this dire predicament!

That's just my personal take and absolutely not intended to advise what anyone else should do. Everyone's circumstances and risk aversion are different.

Only take up the rights if you want to increase your investment in the company (presumably because you think the share price will rise sufficiently over your timescale).

Bear in mind that, in spite of the apparent discount, the rights won't really give you any preferential discount over anyone else buying the shares ex-rights. What you gain in value on 'discounted' rights you'll lose in value of your original shares.

If you decide not to take up the rights you'll receive lapsed rights proceeds. Alternatively, you could sell the rights shares, nil paid, between 28 Sept and 12 Oct (although best not leave that late). Currently you could expect to sell them for around 80p each.

The underwriters will only have to pick up the shares (at 197p) if the rights issue bombs (i.e. the shares trade below 197p on Thursday). This seems unlikely.

Instead, the rights not taken up (the rump) will be placed on Thursday. With SYNT currently trading at 790p the rump might get placed at about 275p. The proceeds, less the rights cost of 197p per share plus some minor costs, will then be distributed to the holders of the lapsed rights. In other words, if you don't take up your rights you might expect to receive about 78p per share as compensation for your reduced stake in the company.

Incidentally, the rights price is primarily determined by the risk appetite of the underwriters. The lower the price, the greater stake they'll get in the company should the rights issue fail. Otherwise, for a given-sized fundraise, the rights price makes no difference to someone taking up the rights issue, they'll end up forking out the same amount of money in order to maintain their stake in the company.

Except you won't get the divi if you buy today. In spite of Monday's RNS they traded ex-divi from open this morning.

What twollocks!

After market (6pm) is technically correct for the record date but a stock goes ex-dividend prior to the commencement of trading on the ex-dividend day, not after market that day. That's how you get alignment with T+2 trading.

Their RNS this afternoon is carefully crafted to try to avoid admitting they got it wrong. Not impressed.

Looks like the company messed up with their RNS on 24th July. Probably should have ex-dividend from 8am 27th July, not 6pm. That's not a mistake that should have made, particularly given the 35p divi amounts to 20% of the market cap.

Even the respected site dividenddata.co.uk thought they meant trading ex from 28 July.

https://www.dividenddata.co.uk/

Sorry to hear that.

I imagine your new consolidated Melrose shares will turn up in a day or two. A similar thing happened to me with Selftrade (got taken over by Equiniti I think). They were diabolical and would even make retrospective adjustments to cash accounts. As I recall there was a similar corporate action (split or consolidation) and I wanted to sell on the first day. They wouldn't let me sell for a day or two, by which time the price had dropped.

Sounds about right.

The Melrose shares trading today have been consolidated from three Melrose shares trading yesterday. That means technically they are not the same shares. They have a different nominal value and different SEDOL/ISIN numbers.

You can't expect to present a certificate for 3,000 of yesterday's Melrose shares and expect to sell them and receive the proceeds from the sale of 3,000 of today's Melrose shares.

For every three MRO shares held at close yesterday (161.95p) you now have

One MRO share (currently 393.7p)
One DWL share (currently 111.9p)

That's not exactly "a huge loss".

Has anyone heard anything about a fresh approach from Minerals Technologies Inc? If so, at what price?

Aren't THG still a standard listing? They need to have a premium listing to be included in the FTSE. I thought they'd given up on that.

"Rights issue price acting as a magnet atm"

I can't see a logical reason why the 103p rights issue price should be a magnet, although I know some people still seem to kid themselves that's all it costs them to take up their rights and anything over is 'profit'. Ah well!

Thanks @AML_007. I'd missed that the rump placing was moved from today to tomorrow. Placing dip tomorrow then?

What I'm trying to get at is recent disclosures of percentage of AML short positions aren't very meaningful when there are 400% more shares hitting the market. Also, remember the 23.3m placing shares will have reduced the declared shorts percentage by about 15%.

If you are still short AMLN short today I think you can still run them, just you will be liable for 103p per share tomorrow and then they'll them become fully paid AML short positions.

Well thanks for the link but does it answer my question? I notice long disclosures are in terms of the AML shares, not the rights. Are the short disclosures and different?

My point is, the figure isn't very relevant if you don't know the shorts in the rights shares.

"Shorts down to 5.48% now, from 7.22% on the 22nd."

Is that shorts in AML or AML and AMLN combined?

If only AML what do you know about shorts in AMLN (which now make up 80% of the company)?

Looks like a dip this morning as the rump gets placed.

"No I don't IG, don't allow shorting on AML."

IG do allow shorting on AML. Not on AMLN perhaps (but why would you want to?)

"At one point, they need to close and the price will tick up."

I don't think shorters need to close any more than longs do. It's more expensive to run a margined long position than a short position and, with interest rates increasing, shorters may actually start receiving daily interest on short positions!

I think there's probably worse to come and a heavily discounted rescue fundraise is one the horizon. Shorters will have seen this coming for a long time. If nothing else, their lengthy Going Concern statement in June should have got alarm bells ringing, plus the toing and froing of directors. The last para reads

"On this basis the Board believes it is appropriate to prepare the financial statements on a going concern basis. However, this material uncertainty may cast significant doubt on the Group's ability to continue as a going concern and therefore to realise its assets and discharge its liabilities in the normal course of business.

Including the rights issue there are now almost 700m shares in issue. Multiply by the AML share price and you get the market cap. i.e currently about £1.1bn.

"If you buy the Nil Paids at 48p, with a view to paying 103p = 151p with the Ords trading at 160p?"

Exactly. It's madness to buy AML if you can buy AMLN. Not all brokers will let you though.

If you can long AMLN then there's a great low risk arbitrage to be had:- Long AMLN/Short AML