|Thanks Barnowl - just got a message from Selftrade.
Yes, its very tricky, I still quite favour Redhall as it looks reasonably defensive but will have to think hard before committing funds in these markets.|
|Hi penpont, just checked my online account with cash recieved today. Tricky bit now is where to re-invest the proceeds. Looking for a decent yield at least. Good luck.|
|Anyone had a sniff of the cash yet or is the date going to be a bit further away?|
|Yes - and the bit that's now of most interest to those who have accepted:
"Settlement of the consideration due under the Offer will be dispatched (or,
in respect of Chieftain Shares held in uncertificated form, credited through
CREST) in respect of Chieftain Shares for which acceptances of the Offer,
valid in all respects, are received or, in respect of Chieftain Shares held
in uncertificated form, for which Electronic Acceptances are validly made, as
at 1.00 p.m. on 31 October 2008 (being the date upon which the Offer became
unconditional in all respects), within 14 days of today's date. Settlement of
the consideration in respect of valid acceptances received or made after that
date will be dispatched (or, in respect of Chieftain Shares held in
uncertificated form, credited through CREST) within 14 days of such
acceptances being received."
I.e. expect to receive the cash about November 14th.
|Thanks Gengulphus, yeah because of the big spread on CFT i guessed it was marginal.
Cancellation of Chieftain Shares
By 1.00 p.m. London time on 30 October 2008, Redhall had received valid acceptances of the Offer, in respect of ordinary shares of 5p each in the capital of Chieftain ('Chieftain Shares'), from, in aggregate, the holders of 7,787,037 Chieftain Shares (representing approximately 88.90 per cent. of the existing issued share capital of Chieftain).
Accordingly, now that the Offer has become unconditional in all respects, as set out in paragraph 14 of Part II of the Offer Document, Redhall has arranged for Chieftain to make an application to the London Stock Exchange for the cancellation of trading in Chieftain Shares on AIM. It is anticipated that such cancellation will take effect at 7:00 am on 1 December 2008.|
Current offer price for the shares is 208p. Add another 1.04p for stamp duty and you have to pay 209.04p, leaving a magnificent 0.16p profit to be made per share. That's less than 0.1% - around a week's interest on the money - and you've still got to pay your broker's commission... As the typical payout period from the offer going fully unconditional is about 2 weeks, you'll do better keeping your money in the bank!
And note that even if your broker can get a price decently inside the spread (which I suspect is unlikely at this stage), the offer has not yet gone fully unconditional. That means that there is a risk that it could still come unstuck on one of the other conditions - almost certainly a very small risk, but nevertheless a risk... So even if you can get significantly more than that 0.16p per share by buying at say 205p, be aware that it's not entirely risk-free. You might of course be willing to take that risk, but make certain you're OK with the consequences if something goes wrong and the deal falls through at this late stage.
E.g. I've done some buying myself in the last few weeks back, at prices around 200-207p. Those purchases were going to roughly break even (buying at 207p) to make a small profit (buying at 200p) if the deal went through - but importantly, if something went wrong, I was (and still am) entirely happy to have bought the shares. If that were to happen, the share price would of course fall - I'm quite realistic about that! - but I would be happy to hold the shares. If I didn't feel that way, I would not have done the buying...
|If they only need another 3% then they will hoover that up within next few days as those holding off to see if anything happens will now accept the deal as it has gone unconditional. There are no benefits now in holding back....maybe take the cash and wait a while to see if you can buy into the larger company at a good price point.|
|depends on whether it goes over 90% and they force you to sell. In theory if they sit at 87% they can;t force you to sell but they can delist the com pany adn leave with no way to realise your shares|
|If i haven't accepted and the deal goes through, won't i just get paid out on my holding anyway?|
|If it's a done deal why aren't the shares trading at 209p? Isn't there a few pence to be made here?|
|Well, Redhall have got 85.73% acceptances, waived their original 90% acceptances condition (as they had reserved the right to do) and declared the offer unconditional as to acceptances:
They haven't yet declared the offer unconditional - presumably some of the other conditions are yet to be met. But that's a convincing level of acceptances - enough for them to start the delisting procedure as soon as the offer goes unconditional and to be pretty certain to get to enough acceptances to compulsorily buy the remainder.
And even if somehow they don't get to that level of acceptances, being a minority shareholder in an unlisted company with the majority shareholder having over 75% control is not an atrractive position to be in. So I'll now be accepting the offer as soon as I can.
|Hmm... Seems a classic "heads we win the next election, tails we win by borrowing money from the next government and letting them make the cuts" political move to me...
Thanks for clearing up the point about "moaning". Sorry if I was a bit oversensitive about it - it's probably one of the ways that current markets are getting to me...
|This was in the FT just in case anyone getting worried about future contracts....
Darling to fast-track public spending
By George Parker, Alex Barker and Nick Timmins
Published: October 17 2008 23:45 | Last updated: October 17 2008 23:45
Plans to fast-track billions of pounds of public spending on building projects such as new schools and hospitals are being drawn up by Alistair Darling to give an emergency boost to the British economy as it heads into an expected recession in 2009.
Although he is hemmed in by tight public finances, the chancellor is planning to raid future budgets in an attempt to give a Keynesian stimulus to the economy in the months ahead.
The move will see cash being transferred from planned budgets in 2010-11 the year after the next general election to fund projects now.
Mr Darling will argue that it makes sense to accelerate public spending to prop up the economy, in the hope that a recovery is under way by the time a hole emerges in public spending plans in two years' time.
The chancellor will set out his plans in next month's pre-Budget report, heavily constrained by a soaring deficit, with some predicting that borrowing next year could exceed £70bn.
Mr Darling has warned cabinet colleagues to live within existing spending totals set over a three-year period from 2008-11 but has told aides he wants to "reprioritise" spending in key areas.
Government officials say Gordon Brown and Mr Darling will seek in the coming weeks to bring forward projects that would specifically boost the crumbling construction sector and help small businesses.
The prime minister said this week that the government would do what it could to "keep the economy moving forward".
The Treasury has already shown some flexibility with departments. One initiative in September "brought forward" about £1bn of housing spending as part of Mr Brown's autumn relaunch. This included £400m to build social housing during the next 18 months. A special dispensation has also been given to the Ministry of Defence to move funds around budgets, enabling officials to sign off the £4bn carrier contracts.
Candidates for accelerated state funding include primary care buildings, schools, social housing and leisure facilities.
The measures, however, may have more political than economic impact. One senior Whitehall adviser said: "You can't just spend capital tomorrow, it takes time."
In recent years, the government has repeatedly underspent its capital budget, and big building projects that also involve private finance for schools and primary care are behind schedule.
Copyright The Financial Times Limited 2008
|Apologies Gengulphus if you thought I really meant anyone was moaning. I guess my point was only that the economic climate has changed dramatically and so we now have a different landscape with regards other opportunities. However I do agree there is probably no rush. I totally accept the logic of your wait before accepting the offer.|
|... but I was more and more inclined to accept and move on to the next bargain being thrown up daily.
Charter (CHTR) this afternoon on a p/e of 4.2 with net cash and a ftse250 company forecasting growth suggests the markets are now throwing everything out so why stick around to moan about this one.
I see your point - but I'm not certain what the hurry is. The first closing date for this takeover is the 21st, I believe (21 days after the posting of the offer document on September 30th); if the offer goes unconditional then, takeover proceeds normally appear about a fortnight afterwards, so around November 4th. If I wait and only accept then, I'll probably get the proceeds about a week later, i.e. November 11th. In current market conditions, who's to say which of those two dates will have the better bargains available?
And by the way, what moaning? You're playing things your way and explaining why you're doing so; I'm playing things my way and explaining why I'm doing so.
|In light of the market turmoil, i have also accepted the cash offer today. I will more than likely use the proceeds to reinvest in other possible bargains that may be about in the market at the time i recieve the cash payment.
Good luck all.|
|I accepted today...mainly because cash is king in this market and I can always pick up some Redhall at a later date. I would have preferred more and it may be that Redhall are ringing around to try to get the necessary acceptance as quick as possible. I am not sure if Redhall would be inclined to increase the offer a little if they only received say 45% acceptance but I was more and more inclined to accept and move on to the next bargain being thrown up daily.
Charter (CHTR) this afternoon on a p/e of 4.2 with net cash and a ftse250 company forecasting growth suggests the markets are now throwing everything out so why stick around to moan about this one. The other problem now of course is that without this cash bid then Chieftain would fall back even with all that cash underpinning them.|
|Yep, I had a Redhall call this morning|
|Has anyone else had a phone call from Redhall,asking if you are going to accept the offer?|
|Hmm... Well, I'm still going to hold out at least until the offer goes unconditional, even though I'm starting to get the impression that the rest of you are pushing the acceptances level up and so making that look increasingly likely! Basically, maybe a week's extra delay in receiving the cash looks a small price to pay for even a small chance of not being forced out of a good company at a low price.
Especially as the difference made by that week's extra delay could very easily work either way in "these markets"...
|I also agree DAvid. Having felt it was a lowball offer initially, I feel the last week has changed my perspective, and the CAsh will be useful in these markets.|
|Agreed, David. Canny timing by Redhall :-(|
|featured in the FT yesterday..
Shares in Redhall, the Aim-listed specialist engineer, have held up well this year, enabling the company to continue on the acquisition trail. Last week it announced a recommended bid for Chieftain, a smaller Aim-listed group providing engineering services to the marine, petrochemical and power sectors. It is offering 209.2p a share in cash, a premium of 9.5 per cent to Chieftain's share price on September 18, when news of the approach surfaced. Redhall is also raising £20m through a placing at 245p a share to fund the deal, which values Chieftain at £18.6m. Chieftain is for sale because Bill Taylor and Peter Wardle, who have led the board for 23 years, want to retire and sell their interest in more than 30 per cent of the equity. Redhall believes the acquisitionwill boost its capability as a niche UK engineering services group. The deal will improve its access to the nuclear marine sector and enhance its prospects in the oil and gas industry. It might also point to further consolidation among Aim companies.
I must admit looking at some of my Aim stocks with solid businesses on p/e ratings of around 2 to 6 it is not difficult to expect further consolidation and at this moment in time I am very much thinking that accepting the deal on Thursday if there is no counter bid by then is the way to go and re-invest before the next deal is announced....Save for the fact that I will expect a huge premium on a company trading on a p/e of three. CFT still has huge potential but in these markets the retiring directors probably are taking a safe exit.|
Many thanks for the comprehensive takeover information and advice, particularly the last post making clear there is no point in doing anything until/uless the offer goes unconditional.
Your post numbers have been duly noted for future reference.
|I am sure that 40p or so of the cash could have been handed back to shareholders this year at CFT without any distress to the business. It therefore suggests that the earnings flow is being bought for closer to a fwd p/e of 9. I still think they are getting a bargain and would be a buyer of RHL if they go below £2 if the deal is accepted.|