Member Info for tedmak

In effect - put up or shut up.

Ball back in BHP's court.

A lot of things have come together in a a short time.

The short turn around time and conflation of the RI with the ex dividend date. We were expecting money to come IN in August but it now goes OUT in June. That will have been in shareholders timetables.

It is relatively surprising to get the cash call, although not inconsistent with the investment requirements of the business.

The general election declaration which was a surprise and NG is affected by government policy/regulation.

Bond yields have gone up in the last week, affecting all utilities.

In terms of timing - it is the perfect SHORT-TERM storm. Am taking up my rights but I have had to fund it by selling. Must be others in this situation, as has been said earlier. I would have preferred the whole thing to have been done two months ago. The turnaround could have been longer as there would not have been the complication of the ex dividend date.

My hunch is that they extend talks OR BHP goes hostile TODAY.

Where is the gain for AAL to end talks. BHP wants this and looks like a lot of the shareholders do.

We are talking about the fine details - do we keep the carpets and curtains etc - NOT whether they want the house or not.

If it lapses BHP cant come back today or for at least 6 months, leaving a frustrated shareholder base and BHP with a strategic dilemma.

Whereas can they get a chunk of brownfield copper assets?

Fleccy

I disagree that the debt is too high already. They do, however, have an investment program that has increased.

(Other than Shell or BP, does any other UK company have an investment program of £60B over 5 years?)

They have to stop the gearing rising too much over that period.

I agree that the sentiment has been damaged. I wont go over the clarity of the announcement, but a lot of the statements about grid upgrade projects have been in the public domain for while and maybe the dividend growth rate should have been moderated earlier.

If you look at it - they get a lot of money off the shareholders now, to pay some back in about 2 months time and then every 6 months. Maybe they should have frozen the dividend earlier.

It is what it is, though.

At least we get the benefit of the increased growth on the investment down the line. I am a bit fed up with a number of UK companies that are being sold off for takeovers barely hitting the peak prices over the last 5 years. (But that is another debate).

Some jaw-dropping detail:

Looking from the outside, it is surprising that National Grid showered their two corporate brokers with such a bounty. To be sure, there’s something refreshing about rewarding trusted advisors over the “dumb money” of lending banks. Moreover, Barclays and JPMorgan have probably done a lot of free corporate finance work over the years.

Nevertheless, it’s doubtful that the value of this work comes anywhere close to the fees awarded. And it’s difficult to see the upside of alienating lenders you may need in future. Banks won’t rashly cut credit lines, but there’s no question they will more critically scrutinise future lending requests to determine whether they will earn enough ancillary fee income to justify the commitment.

Another knotty question involves the fee spread – 1.85 per cent base fee plus an incentive fee of 0.15 per cent. As FTAV has discussed elsewhere, a rights issue underwriting is akin to writing a deeply out-the-money put — National Grid have in effect the right until June 12 to sell £7bn worth of shares to Barclays and JPMorgan at 645p. But the “option” is so large, so bespoke and so unhedgeable as to make a Black-Scholes model valuation absurd.

Https://www.ft.com/content/baa24cd0-53b3-4af6-9606-75b40ec9c4b9

As I have previously said, I am ok with the rights issue. It needed to be done and will provide the shareholder with a good return.

It needs asking just why they pare paying fees of £140M for such a heavily discounted rights issue.

The way this has been conducted is very poor.. Money for jam for the bankers.

Record dates are moot, ex dates matter, now you know.

Or to put it simply - you cannot think of a precedent for a record date before an ex date.

Do you work in the investor relations department, you seem to love them.

Further to this - whenever a company announces something DURING the trading day - they know there is confusion.

They messed up.

I disagree - at 7am they mentioned a record date of 20th May.

Can you give me an example of a record date BEFORE an ex rights date or ex dividend date?

Can you give me an example of a record date BEFORE an announcement.

It is poor communication. I find it odd you are defending it.

To be clear - I dont disagree with the rights issue - but cant be happy with the communication.

Uncle_Doug

I dont think we have been screwed in and of itself. We have been communicated with badly.

The RNS about the prospectus came out at 13:19 yesterday - DURING the trading day. They should have announced everything after close of business TODAY to allow people to digest matters. It is fully underwritten, anyway, so the company gets the money. What they HAVE lost is confidence in the communication.

You shouldn't be communicating matters during the trading day.

Now I am a long term holder - so not too fussed. If I was a day trader - I may not feel the same - and not unreasonably.

It really is appalling.

As I said in a post yesterday - possibly lost among the melee

IDoMyBest was correct in what he said.

Regardless of the wisdom of the rights issue (I think it is a correct thing to do), the communication was truly abysmal. When the record date was stated there should have been an explanation of what that meant. A clear one. And having a record date that precedes an announcement is just downright stupid. I had not seen that before yesterday.

Upn further reading, I think IDoMyBest is correct.

Puttting the dates in suich an order is confusing but the subsequent reading explains it.

You mentioned certificated form - ie with paper certificates.

Most people dont have paper certificates.

That is why, I think, the piece you quote says 'MAY'

The main issue is the RECORD date, which is 20th May.

I think the 'clarification' is for people who trade with paper certificates are the process of record is more complicated.

The designation of 'ex rights' is for further clarity because you will also be able to by nil paid shares tomorrow. The nil paid shares wont have an entitlement for the dividend whereas the shares designated as 'ex right' will.

It is complicated by the record date being BEFORE the announcement- which is unusual.

I would not buy today on the assumption they are WITH the rights today because. the record date is in the past.

I must say - the announcement is a very poor that it has caused. this confusion.

They have put the record date in the past, which is unusual, and also very close to the ex div date.

Some people will literally not know what they are buying and selling.

Announcement of Rights Issue........................................................................

23 May 2024

Publication of the Prospectus...................................................................... …

23 May 2024

Record date for entitlement under the Rights Issue.......................................

6.00 p.m. on 20 May 2024

Despatch of Provisional Allotment Letters (to Qualifying Certificated Shareholders only).........................................................................................

23 May 2024

Admission and commencement of dealings in New Shares, nil paid, on the London Stock Exchange...............................................................................

8.00 a.m. on 24 May 2024

Existing Shares marked "ex-rights" by the London Stock Exchange.............

8.00 a.m. on 24 May 2024

Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters...............................................

11:00 a.m. on 10 June 2024

Expected date of announcement of results of the Rights Issue through a Regulatory Information Service.......................................................................

12 June 2024

Commencement of dealings in New Shares, fully paid, to commence on the London Stock Exchange...............................................................................

8.00 a.m. on 12 June 2024

The RECORD date was 20th May. If you were a shareholder then, you get the rights. We are currently effectively trading today EX RIGHTS and is why they are sending out notices to PAPER shareholders TODAY. Look at the dates.

The rights issue and the dividend rebase/cut are to make sure that the gearing doesnt get out of control whilst they deliver the increased investment plan.

It makes sense and means they wont be overly reliant on the bond market later in the cycle.

It will deliver profitable growth down the line.

The deep discount is to make sure that it IS underwritten, as as long as you take up your pre-emption rights, you are not diluted.

Even if you dont take up the RI, the rights will be sold and you will get the difference between the market price and the rights issue price.

We are already past the record date which was Monday. If you look at the share price reaction and add in the value of the rights we are being given, the effective price is UP today (do the match).

Was a surprise but the news makes a lot of sense in light of the strategy going forward.

Not if someone comes in and buys the whole lot.

Good luck getting the copper business off Glencore or Rio - or a deep-pocketed strategic buyer from China or India.

BHP can ensure the deadline is moot if they go hostile and put a formal bid direct to the shareholders. That would reset any deadline.

Problem with going hostile is if you lose you will have the additional costs of the bid and be locked out for another year.

A hostile bid, however, would need to be for the WHOLE company - ie per AAL share. They need the boards co-operation for what they are proposing.

They are listed in Sydney. There is a 1 hour gap between that stock exchange listing and the LSE opening. I would assume anything would be announced tonight or 7am tomorrow.

I assume it was leaked hence the RNS. You only do RNS during the trading day after a leak or before a serious risk of one.

BHP are not going away.