Member Info for TheTrotsky

The aim is to increase UK-listed companies in people's share portfolios (and bolster the UK stockmarket in the process).

In principle that should not prevent people from investing in overseas-listed companies; they would just have to invest indirectly through UK listed investment/unit trusts etc.

On the downside, that might mean additional investment charges/stamp duty but on the upside it might make people's overseas portfolios more diversified and less prone to share price shocks e.g. if people are directly invested in (say) the Magnificent 7 rather than (say) the S&P 500 they may be very vulnerable to price shocks.

IMHO the share price rise of the Magnificent 7, like Bitcoin, is being driven by a "wall of cash" rather than fundamentals and any disruption to that "wall of crash" could result in signficant (paper) losses. Fifteen months ago bitcoian was trading at c$16,500. Today it's trading at c$67,800! Unlike a lot of investors I don't pensonally believe in fairytales, Goldilocks or a new paradigm; I believe in bulls and bears (and just when a bull is running rampant a bear is likely to appear uninvited).

I note that yesterday the IMF warned (again) on US banks and another waive of US bank failures could be just the trigger that some unsuspecting investors weren't looking for. Diversification may not insulate you from losses but it may insulate you from complete wipe out.

PS. You will appreciate that I'm not a fan of bitcoin. I appreciate that there is a limited supply (unlike tulips and conch shells) but it isn't tangible (unlike gold) and has no current use in the "real economy" (other than being a conduit for the proceeds of crime). The fact that the SEC has now approved bitcoin beggars belief; it has all the hallmarks of the next derivate, LDI scandal (in the meantime the US investment banks will rack up the profits before running for government cover).

The "phoney" trades (as I like to call them) are in full swing at the moment. As far as I can see on L2 (not that it really helps much these days), the share price drop seems to be primarily driven by autotrades and I suspect that the MMs may be doing a bit of treeshake as is their wont. There may be "genuine", large delayed trades behind the scenes driving the current share price drop but we will only really know for certain later in the day as the MMs release the data.

It all really depends on your personal outlook. One should never overlook a bird in the hand for two in the bush. You've doubled your money and the US markets opening are unlikely to materially increase AV's share price further today IMHO. If I was to hazard, the share price might re-test 480p again later today but nothing is ever guaranteed.

Don't forget that the CGT allowance for 23/24 is £6,000 and due to reduce to £3,000 for 24/25. So, selling at least some of your shares before 6 April to utilise your 23/24 CGT allowance and transferring the proceeds into an ISA would appear to make sense (if you've not already used your 23/24 ISA allowance).

Unless you already have the cash sitting around, don't forget that it could take 7-14 working days to sell, realise the cash proceeds and then re-invest back into an ISA. Most brokers work on at least a T+3 days settlement period - which in practise generally means that although they might allow you to re-invest the sale proceeds immediately within your trading account they'll require you to wait at least 3 working days before withdrawing the cash and/or transferring the proceeds from your trading account to an ISA, if they provide that facilit). Furthemore, if you have to withdraw the cash before investing it into a new ISA then you've not only got to wait for the funds to clear in your trading account but also wait for the funds to clear in your bank account (most brokers will take 2-3 working days to transfer funds once they've received your instruction). You will also need to factor in the time it will then take for funds to clear in your new ISA account (if you pay by debit card that should be same day but bank transfers will take longer).

Also, don't forget that bed and ISA'ing is likely to depress shares prices the later in March you leave it and likewise raise share prices after 5 April as most people are looking to sell before 6 April, utilise their 23/24 CGT allowance and re-invest post 5 April utilising their 24/25 ISA allowance.

Hope that helps.

I'm not expecting bad news per se. I'm expecting a steady improving progression on costs, underwriting and margins. If we don't meet all of the criteria to restart the dividend for FY23 that won't necessarily be bad news (it was never a slam dunk) as long as we can see the dividend restarting at the FY24 interims (that should be feasible). Winslow needs to show that he is capable of making sound business decisions, regardless of the Ageas "noise". Part of the reason that DLG got itself into this mess in FY22 was it's unwillingness to make sound business decisions (rather than addressing the issues and reducing the dividend, it proceeded to take unwarranted risks). Winslow needs to stamp his authority now, even if he's not seen as "playing to the galleries" (Blanc has ignored the hysteria and stuck to her guns, amd that's now starting to pay dividends for AV). With, or without Ageas, DLG's share price should be able to recover to (say) 250pps in the next 12-24 months once a sustainable dividend has been re-instated. That should be Winslow's sole focus regardless of whether or not Ageas comes back with an improved offer; if he sticks to the nitty-gritty the benefits (and potentially an improved offer if it comes to that) will come. Achieving 250pps should be just the first hurdle. Winslow then needs to focus on how best DLG can replace those profits from its commercial lines business but it has to be one step at the time.

Rock on Amanda!

Squash, Canada & RoI have combined populations of ~43m (~64% the size of the UK) so you shouldn't simply discount them. The population of Australia is ~68% the size of Canada and its second largest insurer (SunCorp) is currently worth ~£7.5bn. AV is the second largest insurer in Canada (which has large agricultural, manufacturing & mining sectors), so it's conceivable that, on a pro-rata basis, AV's business in Canada could potentially be worth ~£11bn, all other factors being equal! Hardly small fry.

It goes without saying, given that the whole of AV has a current market valuation of ~£12.5bn there is significant upside to the potential valuation of AV.

Squash, Be realistic. What was AV going to buy with £5bn? Given it's dominant market positions in the UK, RoI & Canada it was hardly going to be permitted to acquire other insurance rivals in those markets. The CMA are already crawling all over their proposed £0.5bn acquisition of AIG's UK protection business!

The fact is that short of buying another overseas insurance business, in which event AV would likely have had to spend more than £5bn to acquire a top 1/2 insurer in another major insurance market (consistent with its aim to be one of the top two insurers in the markets it serves) plus, since the Brexit referendum, £5bn doesn't go as far as it once did. For example, if AV had wanted to acquire one of the top two insurers in (say) Australia, namely QBE and Suncorp, it would probably have had to spend in excess of £10.5bn and £7.5bn respectively, before any divestments.

Not only that, I'm not sure AV's shareholders would have had the stomach for such a large overseas foray so soon after divesting most of its overseas businesses and increasing the size of the group by c30-40% in the process, particularly when you consider that there would probably have been limited cost savings and/or economies of scale from acquiring such well established market leaders. AV had already tried buying smaller overseas insurers and growing them organically, and look how that worked out (a real mish-mash).

AV's options were/are limited and Blanc now intends to grow the business going forward by buying and assimilating small, capital-light, bolt-on acquistions (generally less than £1bn), which can be funded out of its existing cash resources without having £5bn of cash just sitting on the balance sheet looking for a home. Personally, I think that's a recipe for disaster; you either become fixated on finding the "one" and often becoming increasingly desperate to do a deal at any cost as time goes by or splurge on a bunch of ad-hoc acquisitions all at once, often (at your investment banker's suggestion) outside your field of expertise (what do they care as long as they rake in the fees) and desperately try to assimilate them and squeeze out the projected cash savings (that never quite materialise).

Far better to return the excess capital to shareholders now and return to the market to raise additional capital at a later date if a, too good to miss, investment opportunity arises (at which time the shareholders get the chance to run the rule over the acquisition too). Excess cash sitting on the balance sheet looking for an investment rarely ends well in my experience. Make the investment bankers work for their corn; let them convince you that the investment is worth your while raising capital for rather them "doing you a favour" and digging you out of that hole of shareholder expectation as time elapses.

Bromtree, All of the insurers are putting up their premiums at the moment. DLG is not alone albeit that some of its policies have risen more in relative terms because they were lower to start with following the FY22 debacle. It's been my experience that although insurers are less inclined to match competing quotes on similar terms, they do tend to be more competitive for new customers (dual pricing still seems to be alive and well to some extent) and as one customer leaves another comes through the fornt door.

Comparing my family's various insurance policies this year with last, I find that I still have 50% of our policies underwritten by DLG directly/indirectly. Last year we had policies with Admiral, Churchill, Sainsbury's (underwritten by UK Insurance Ltd which is owned by DLG) and Tesco whilst this year we have policies with Admiral, Hastings Direct, Privelege (owned by DLG) and Sainsbury's.

It's not necessarily all doom and gloom.

Guitarsolo, Penny James didn't "forget" to get re-insurance cover. DLG did in fact have re-insurance; it just didn't have as much as it might. It was a deliberate executive decision to have less re-insurance because re-insuring reduces DLG's profit upside when claims are below average. However, likewise, not re-insuring increases DLG's profit (or indeed loss) downside when claims are above average.

Unfortunately, once the decision had been made, DLG was, more or less, wedded to it for the "season"; it's not a policy that you can simply change "mid-stream" when you realise that claims are likely to be above average, without incurring a much higher re-insurance premium (which would, more or less, offset any benefit).

It was, essentially, a gamble that backfired in an attempt to continue to bolster DLG's bottom line (and maintain its already stretched dividend) to make up for other operational deficiencies that had built up over a period of years. I think DLG may have had operational issues for a number of years that it had failed to address and had been "covering them up" by taking more risks than it should. FY22 was simply the culmination of passed failings and DLG's inability to leverage its household brands.

Penny James may have taken the fall but, as I said in my previous post, I think there were collective failings in the executive team (some, or all, of whom James "inherited" when she became CEO) and I'm not sure whether the failings/weaknesses of some, or all, of those executives have yet been fully addressed. I wouldn't be too surprised to see Winslow looking to clear out some of the executive team in due course.

CVB123, DLG's recovery is still fragile and Adam Winslow needs to stamp his authority from the get go. If a final dividend is to be paid for FY23 then I think it would be better if DLG does not pay out more than (say) 40% of its FY23 profit (excluding any profit arising from the sale of its brokered commericial insurance business).

Winslow needs to set out how he plans to run the business going forward and DLG's (new) dividend policy. He should not overly concern himself with Ageas's possible offer; it seems fairly clear that the majority of DLG's existing shareholders support the BoD's decision to reject Ageas's original approach back in January. The ball is now firmly in Ageas's court to come back with a better offer that the BoD can recommend to shareholders (both the offer price and the cash element need to be markedly improved) or walk away.

The (so-called) bid is opportunistic. It'll probably take DLG another 12 months to get the business fully back on track and, in the meantime, it can't afford to throw money at shareholders just to try to stave off a potential (hostile) bid; it can however continue to set out its path to recovery and give shareholders a heads up on what they might reasonably expect in the next 12-24 months.

Shareholders should bear in mind that DLG has to some extent de-risked since FY22 (it now re-insures more of its potential weather-related risks) and if it keeps control of its manageable costs, keeps an eye on its inflationary inputs, and continues to price its average premiums in the middle-ground (it needs to avoid being too clever and becoming a bottom-end outlier like it did in FY22) then its potential profits over the next 12-24 months should be more predictable (de-risking should have reduced the probability of exceptional profits and losses).

Although not always appreciated by the markets, I'd like Winslow to be cut from the same cloth as Amanda Blanc; solid and (generally) reliable. That doesn't mean that Winslow (or indeed Blanc) will be incapable of mis-steps (best laid plans can always go awry) but I'd like him to be disciplined, better understand the strengths and waeknesses of his executive team, and only take calculated risks.

Penny James eventually fell on her sword following the debacle in FY22 but I can't help but think that some of the problems in FY22 were the result of the collective failings of some, or all, of her executive team and it may be time for a new broom to start clearing house.

Not to go over old ground again but the UK stockmarket has been our of favour since Brexit; I'm afraid Boris doesn't win any plaudits either (regardless of what he said, the UK stockmarket still declined).

Personally, I think it's a combination of the 2008 banking crisis and the subsequent new solvency rules (which has seen pension funds moving increasingly into bonds) and Brexit (however you like to cut it, the City's "domain" has been reduced by Brexit and it's longer the destination for companies that want to trade in the EU). The EU bourses have made inroads into the City's territory and although the impact may not be as significant as once might have been feared, has still none the less helped to undermine the City. You could also perhaps throw the ongoing demise of the Hong Kong stock exchange into the mix too; given the historic ties between London and Hong Kong, and the continuing shift to Shanghai, London is not quite the international centre it once was.

However, at the end of the day, if British private investors continue to chase their rainbows in the US etc. then it becomes an increasingly uphill battle and I think it's about time that the government removed the tax-free incentive to invest offshore via ISAs (personally I'd stop any new overseas investments being made in existing ISAs and, perhaps, introduce transitional rules to force ISA holders to divest of their existing overseas holdings at some point in the next, say, ten years). UK PIs might not like it at first but if money is re-redirected from (say) the US market into the UK market then we should start to see some recovery in UK equities (the price rises in the US are, in part, being driven by cash rather than fundamentals). At the end of the day, if UK investors choose to forego ISAs, in preference to ordinary share trading accounts, going forward then the tax generated can be used to pay down the National Debt.

Re-read the tender offer. You're reading it as if you can have your cake an eat it; you can't. You have to waive all, or part, of your dividend entitlement to receive the tender offer. If everybody waived their dividends in lieu of the tender offer, then it would cost DEC c$44.1m (105% * $42m).

DavidCharles,

I suggest that you re-read the Tender Offer. You have to waive all or part of your dividends on your existing shares (your "Entitlement") if you wish DEC to repurchase some of your shares at the tender price whereas, if I'm not mistaken, you appear to be assuming that you will receive the dividend on the shares that you don't tender.

So, in your example, Ivor would be entitled to £691.70 (before tax) on the shares held in his ordinary trading account and, assuming that the "average market value per share" was £10, then he'd be able to tender a maximum of 69 shares in his ordinary share account, in which event he'd receive £724.50 (69 x £10.50) for his tendered shares plus the balance of his dividend entitlement i.e. £1.19 (70% * £1.70). Therefore, in principle, Ivor ought to be able to re-purchase 72 shares in the market thereafter, ignoring dealing costs and assuming the share price remains at, or around, £10.

The modern rendering of Canute is clearly not accepted; no slight was intended.

mjallen, i wish you luck with getting £3.34 per share but i think you are defying reality (even king **** couldn't make the tide heed his commands). i think it's fair to say that you are probably within the 10% quartile (possibly the 1% quartile) at the far extreme of the bell curve. ageas probably don't have to worry too much about getting your vote; they only need 90% of the votes cast to make any deal unconditional and compel you to sell up your shares regardless.

No. 50% of the votes would only give them the right to pass ordinary resolutions. They'd need at least 75% of the votes to be able to pass special resolutions and de-list the company, and over need 90% of the votes to make the takeover offer unconditional.

What a load of blather. If you're going to de-ramp, at least put some thought into it.

A bid will be made. Ageas is now too committed not to make a bid; not only in regards to the shares it's already bought but the share positions it's underwriting (third party investors/advisors working in conjuction with Ageas aren't doing so out of the goodness of their hearts). Without a successful conclusion, Ageas could be facing the prospect of losing c£100-£200m if no deal materialises and it's forcred to sell off its current positions. Even if no deal is concluded, it would appear likely that Ageas will remain in the background propping up the share price where it can.

Whether that bid price will be enough to get a deal over the line remains to be seen but by then the FY23 results will be out and we'll have a far better idea of what we can expect for FY24 and beyond. Indeed, in the face of a potential hostile bid, the prospect of DLG re-instating the dividend in FY23 becomes even more likely (even if it doesn't quite meet it's own criteria); that would be for the new CEO to decide.

So why the large fall yesterday?

Because the fat lady hasn't sung yet and averaging down just covers up your past losses (averaging down simply increases my exposure/risk - it's never a dead cert). I'm not willing to accept £2.33 and Ageas hasn't made a formal offer; the wheels could still fall off and I'm not inclined to invest more into a company that has yet to re-instate its dividend (I didn't sell off because I thought/hoped it would recover but I didn't buy more because it didn't meet my criteria for investing more).

Obviously, if I'd known about the bid rumour before it became general knowledge yesterday then maybe I would have innvested more but once it was out of the bag and the reasons for the sudden share price movement in the middle of the day became known the "upside" had more or less evaporated.

Also, the more shares Ageas now owns/controls, the less likely it becomes that Ageas will increase the "offer" if it does now make a bid and, conversely, the less likely the bid might be accepted by the remaining shareholders who are holding out for more. The more Ageas now owns/controls the less it will probably have to increase the bid to get a deal over the line IMHO (Ageas has already shifted the Bell curve) and, arguably, today's share price movements bears that out; if investors thought that Ageas was going to have to materially increase it's initial bid to get the deal done then the share price would probably have continued to rise beyond £2.33.

I hope I'm wrong but a bid of c£2.50 looks more likely to succeed now than it might have first appeared yesterday (Ageas already appears to have taken out quite a lot of the potential opposition). We'll have to wait and see.

Who isn't acting in concert with Ageas? Unless I'm misreading the RNSs over a dozen financial institutions appear to be acting in conjunction with Ageas (the only financial institution not in on the action would appear to be Citigroup, which probably explains their shirty broker's note) and they can't all have bought in yesterday. It would suggest that since the end of January, Ageas, in conjunction with it's backers/advisors, have acquired close to 30%!