Brit Insurance Share Discussion Threads

[bench2] 11/6/2010 10:36

EC is correct. BRIT along with Catlin has been a large dog in this sector and as there are several better run alternatives the institutions will be happy with a £10 exit before the hurricane season .

[effortless cool] 11/6/2010 10:01

It's not the last six years that matter here from the valuation perspective, it's the next six. £16 per share is more than 1.5 x NTA. Only the very best insurers are valued at that level at this stage in the cycle, and I don't think that anyone would put Brit in that category.

£12.50 per share would be an excellent take-out price, in my opinion.

At the end of the day, however, it doesn't matter what you or I think it is worth - it's the institutions that will decide its fate. And many of them will be more excited by Brit's potential to deliver 30%+ over the next quarter than its ability to deliver 100%+ over the next six years.

[crawford] 11/6/2010 09:48

Great post JT,
if they intend to directly talk to shareholders, then I hope we have the patience to reject a cheap bid.

[jtcod] 11/6/2010 09:13

BRE is worth way more than £10 per share. More like £16. Go back over the last 6 yrs and average their Earnings. Look at the average Operating cash flow for the last 6 yrs. It's £200m pa.

Then theres the float, which is massive compared to the market cap but is managed ultra cautiously in the bond market. Any private equity firm with a top investment team could return huge amounts on the float particularly in todays market.

Why do you think the Private Investment firm wants them at £10? It's not because they are worth £10.

[crawford] 11/6/2010 09:08

I would reject £10 - it totally undervalues the stock IMHO and the board was right to reject it.

[essentialinvestor] 11/6/2010 08:48

My guess was prety good, thought about £9 a share.

[effortless cool] 11/6/2010 08:30

Look at the share price today - £10 would do it, I think.

[envirovision] 11/6/2010 08:27

£11 or £12 might do it.

[effortless cool] 11/6/2010 08:11

But the institutions would rather have a 30% gain in this quarter's stats.

[little beaker] 11/6/2010 07:50

£10 undervalues the group from a NTAV point of view. I'd rather hold.

[effortless cool] 11/6/2010 07:29

Today's opening should be interesting.

[effortless cool] 11/6/2010 07:28

If it really was a cash offer of £10 per share, I believe it is certain that institutional shareholders will force the board to the negotiating table.

[jonwig] 11/6/2010 06:50

Thanks Simon ... £10 I will take (and the dividend).

FT:



But the numbers are wrong.

[simon gordon] 11/6/2010 06:43

Telegraph - 11/6/10:

The company's chairman, John Barton, met with Apollo this week after the private equity firm offered £10 a share for the Lloyds of London insurer – a 30pc premium to last night's closing price of 729p.

[jonwig] 11/6/2010 06:36

Brit made an inadequate bid for Chaucer last year and was sent packing. Maybe they should think about making a proper one now to secure their back.

"The biter bit!"

[envirovision] 10/6/2010 21:09

Interesting wonder if they will make it public, wonder if they might be sniffing around else where eg chaucer?

[essentialinvestor] 10/6/2010 20:14

I agree with that, take out price over approx £9.20 a share I reckon.

Likely to be just a matter of time now imv, and this may now draw out others
who are interested.

[edmundshaw] 10/6/2010 20:07

It would be the first try. The private equity group is likely to return, though not necessarily with a sufficient offer.

I'd expect some kind of price rise tomorrow.

[essentialinvestor] 10/6/2010 19:04

Maybe, but I also bet it was a good deal in excess of the current share price

[jonwig] 10/6/2010 18:34

Rejected by the board as insufficient:



Last NTA was 1052p (31/12/09). I bet the offer was nowhere near that.

[effortless cool] 10/6/2010 17:15

Rumour is they have had a bid approach.

[boadicea] 09/6/2010 19:38

Campomar - Another point to bear in mind is that if many holders choose to reinvest their dividends by buying in the market, there may be a corresponding rise in share price due to that demand on or immediately following the 15th July payment date.
It might possibly pay therefore, to anticipate the dividend payment and buy a week or two beforehand at a potentially better (lower) price and replenish one's cash when the dividend actually arrives.

The company are also providing the option of taking the dividend as new DI's which will be issued instead of bought in:
"Shareholders, including Depositary Interest Holders, will have the opportunity
to elect the form (cash or new shares, represented by New Depositary Interests)
and the currency (pounds sterling, Euros or US dollars) in which they wish to
receive the distribution. The election can be made by completing and returning
the form of election which Brit Insurance will provide on or about 18 June
2010."
It also states that, "The price of a new share will be notified on " ..................
but leaves this sentence hanging!

I'm not sure if that option will be available for all/some/no nominee accounts

[campomar2] 08/6/2010 20:51

Very helpful. Thankyou.