Ensor Share Discussion Threads

[eezymunny] 25/11/2016 13:17

Strikingly similar to Security Research Group SRG which delisted 2 years ago, still hasn't sold remaining subsidiaries, still hasn't returned any cash. Shareholders there in limbo (myself included). Nothing untoward has happened but it's somewhat disconcerting.

If you plan to retain your holding you may need to move it out of an ISA (check with your provider first to see if necessary (my guess is you do)). If you have cash available outside ISA you can "bed and de-ISA" - your broker should do this on a very tight spread and if you ask for it to be at the top of the spread you'll max the amount you retain in your ISA, and min the amount of CGT you'll have to pay (if any) if this eventually winds up and you make a profit.

Think they need 75% vote for the delist but it's 75% of votes cast, not total shares, so blocking it may be hard.

[jaf111] 25/11/2016 13:06

This just gets better and better.....yet again this is all about maximising shareholder value - and how rewarding to see the share price chart since this process was all announced....yes the shares have doubled in price.....or am I reading the chart upside down and the share price has halved!!!!

Unbelievable

[dangersimpson2] 25/11/2016 12:41

We should get the money eventually so you won't need to sell the shares as long as you are patient enough. It is annoying to lose the ISA allocation though.

What i think they should do prior to delisting is a tender offer priced at NAV based on the current offers for the remaining businesses minus an estimate of any costs. That way we get to exit at a fair price for the majority of our holdings, costs of listing are saved but the impact of delisting is minimal.

[zimbtrader] 25/11/2016 12:38

58.2% of shares are "not in public hands" and they require 75% of shareholders to approve this. So it would seem the directors will still need to persuade a significant number of shareholders for this to go ahead. Right now I am opposed to the proposal but I will wait to see what emerges in the comings weeks.

It has been badly handled - again - and I'd be very interested to hear if they respond to any contact from shareholders. I may write to them as well expressing my disquiet and concern that they are making a right pigs ear of the whole affair at our expense.

[nocton] 25/11/2016 12:26

I've sold in the market and taken a modest loss. I needed to speak to my broker to get a larger than average sale through though.
My only previous experience of this is that after a share leaves AIM you have limited options and the only buyers are likely to be the main/family owners who will only offer a low price. It is poor practice, but when a company or family owns all or most of the shares they can get away with this sort of thing. It is certainly not in the interest of the smaller shareholders.

[garbetklb] 25/11/2016 12:23

What % approval do they need to push this through? Harrison family appear toown 54.3% - and may have been buying today?
Am v disappointed with the mid trading timing of the announcement.
Company hold £10m+ of cash - not being released at the moment.
For us, suspect it could be difficult & expensive to move these outside SIPP / ISAs
After a bit of reflection, I might write to the directors.

[cockerhoop] 25/11/2016 12:09

Sounds like the sale of Ellard is pretty close to being done & dusted, Woods on the other hand appears not to have received a decent offer so the Harrison's will have it on the cheap rather than let someone else have it on the cheap.

[tiswas] 25/11/2016 12:08

So what happens to shares held in an ISA, I suppose they will have to be taken outside if no longer have a listing. Wonder how idealing will handle this?

[zimbtrader] 25/11/2016 12:06

Me neither and I'm still not sure what it will all mean for us. I have a feeling this is all a little on the fishy side!

[tiswas] 25/11/2016 12:01

Didn't see that coming!

[tiswas] 14/10/2016 08:27

Show me the money!

[gengulphus] 29/9/2016 19:19

I don't know the procedure for getting formal HMRC approval, but I'd be pretty certain that it too costs! Even if HMRC don't charge for it, the advisers needed to prepare the application will...

The point being that on the assumption that finishing winding up the company is only months away, waiting until then and distributing the cash under well-established rules may well be the cheapest option. If it's years away, some other plan is probably called for. And while we're very uncertain about how far away it is and the directors cannot be entirely certain either, they have to take some sort of view on the question when deciding what to do with the cash in the company...

Gengulphus

[dangersimpson2] 27/9/2016 11:23

There's no problem with them paying it out as dividends just that large shareholders holding outside tax shelters tend to prefer capital distributions because their effective tax rate tends to be lower for capital gains. I think we are all surprised that HMRC have not given approval for an interim capital distribution here since selling businesses and property as part of a business wind up is pretty clearly not profits from normal trading but that is where we are.

I still think a tender offer would be an effective way of managing the situation.

[gengulphus] 27/9/2016 09:34

That only works if the company also gets the 'B' shares listed - which is fairly expensive! Not all that significant compared with the amount of cash involved for a big company, potentially a lot more so for a small company.

Also, the attraction of the usual type of B share scheme used to be that it gave UK shareholders the choice of receiving their cash as a dividend payment (taxed by Income Tax) or a capital payment (taxed by CGT). Depending on the shareholder's tax situation, either could be better, so giving shareholders the choice rather than the company making a single decision that would apply to all shareholders was of overall benefit to the shareholders collectively - which could justify using a more expensive method of distributing the cash.

But the government stopped such schemes (IIRC when the 2015/2016 tax year started in April 2015) by adding tax rules that essentially say that if a company offers its shareholders a choice of dividend or capital payments, the payment will be taxed by Income Tax regardless. B share schemes have become a lot less popular since then!

Gengulphus

[grannyboy] 22/9/2016 15:02

Some companies go for a 'B' share where the holders can then sell at their convenience.

[zimbtrader] 19/9/2016 15:26

Thank you guys. Really appreciate your time and wisdom.

Zim

[gengulphus] 16/9/2016 09:50

... One last thing that springs to mind is that even if not, would it be an issue for holdings within an ISA / SIPP. ...

Provided you're only a taxpayer in the UK and not anywhere else, only very indirectly - tax issues affect what the company does, which affects you... But there won't be any Income Tax or CGT to pay inside an ISA or SIPP, no matter what the company does.

If by any chance you're a taxpayer in some other country, either instead of or as well as the UK, holdings in an ISA almost certainly will be subject to whatever of that country's taxes apply - I don't know of any other country that regards ISAs as a shelter from its taxes. There's a better chance of a SIPP doing so - other countries have pension tax shelters and may recognise a SIPP (or other UK pension) as the equivalent of one of them.

There are however an awful lot of countries the other country could be, and my knowledge of their tax systems ranges from non-existent to minimal, so I won't be able to answer any specific questions about them - basically all I know about the issue is the above generalities and that if the issue of foreign tax were to start to apply to me, I would need to get specialist tax advice!

Gengulphus

[cockerhoop] 16/9/2016 08:45

Zimtrader,

My impression was the board was being very cautious, sought assurances from HMRC (which weren't forthcoming). There would be no tax issues with holdings in ISA's (subject to Gengulphus clarication :-)) but I think potential issues with the family stake (54% of company) caused them to take a step back. All the work has been done regarding a distribution so it could be resurrected quickly if/when confidence on tax treatment obtained.

[dangersimpson2] 15/9/2016 15:39

A tender offer definitely makes sense. I think they should just keep it simple. Pitch it at Net Cash + what they think is a conservative value of the remaining businesses/property. Everybody has an incentive to tender now unless it negatively impacts their tax situation, everyone is scaled back, achieves exactly the same as a capital distribution.

[gengulphus] 15/9/2016 15:17

Zimbtrader,

Yes, a tender offer is basically a form of buying back shares - but one where the purchases are done off-market by a corporate action.

The simplest form of tender offer is a corporate action in which a company makes a general offer to all of its shareholders to buy back their shares at a given price, using up to a specified amount of cash. Each shareholder can choose to accept the offer with regard to any number of shares up to their full holding, or not to accept it (which they do basically just by not responding to the offer at all). If the company doesn't get enough acceptances to use up the cash available for the offer, or only just gets enough, it buys all the shares for which acceptances were received. If it gets more than enough, it buys as many shares as the available cash will buy, typically scaling back the number of shares it buys from each shareholder by a factor of (shares it can buy)/(shares for which acceptances were received).

There are more complex forms - e.g. a company like Ensor might offer to buy at any whole number of pence from 70p to 80p, giving shareholders the choice of which price they're willing to sell at (or even multiple prices - e.g. a shareholder who is inclined to hold out for 80p but wants to hedge their bets might choose to accept with regard to half their shareholding at 75p and the other half at 80p). That one would be processed by first looking to see whether it has received enough acceptances at 70p to spend all the money buying shares at 70p - if so, it does that (scaling back if necessary), so some or all of the shares tendered at 70p are bought at 70p and none of the shares tendered at 71p or above are bought. If not, the company then looks to see whether it has received enough acceptances at 70p or 71p to spend all the money buying shares at 71p - if so, it buys all the shares tendered at 70p and some or all of the shares tendered at 71p, in both cases at 71p/share (all shares bought are bought at the same price, regardless of what price they were tendered at), and shares tendered at 72p or above are not bought. If not, the same process is done for acceptances at 70-72p; if that still doesn't allow the company to spend all the available cash, then acceptances at 70-73p are looked at, and so on. Finally, if it gets up to looking at acceptances at the full range of 70-80p and there still aren't enough acceptances to spend all the available cash buying them all at 80p/share, then the company buys all the shares that it had any sort of acceptance for at 80p each, and is left holding the remaining cash.

As with many other types of corporate action, there are doubtless many minor variations on the theme. For instance, I think I remember seeing one in the past where the scaling-back provisions said the company would favour fully purchasing small shareholdings that had been fully tendered, presumably in the hope of reducing their number of shareholders and thus their shareholder communication costs.

Tender offers are IMHO a very fair way of distributing surplus cash to shareholders, as they treat all shareholders as equally as possible without compelling any of them to sell if they don't want to. But they are unfortunately also one of the more expensive forms of doing so, due to the need to inform all the shareholders and get individual responses from them - at a guess, costs are likely to be of the same order of magnitude as those for a rights issue, excluding underwriting costs in the case of an underwritten rights issue.

Gengulphus

[meijiman] 15/9/2016 15:02

Clearly if potential buyers know you are desperate to sell then offers are more than likely to be lowball.......

[cockerhoop] 15/9/2016 14:08

Hi guys,

I decided to head across to the Agm today (pretty much at the last minute), I was treated very well especially considering I was 10 minutes late due to a accident on the M60.

I can confirm the issue with the interim distribution relates to HMRC failing to give assurances that the tender offer arranged would be treated as a capital return rather than a dividend. It was pulled at the very last minute which is why the paragraph in the interim statement doesn't read to well (imo). The company were taken by surprise by the HMRC lack of assurance which conflicted with there own advisors.

The impression I got chatting after the formal business over tea and biscuits was that the 2 remaining divisions are performing well currently, parties are interested in them but aren't yet willing to pay what Ensor consider a decent price. The Brackley land I think is closer to being sold.

If a sale isn't forthcoming in the short term the company would be comfortable operating Ellards and Woods until a suitable offer materialises.

My understanding was that David had arranged to speak to Roger this afternoon so he may well be able to add some further detail.