Laird Share Discussion Threads

[bakunin] 01/3/2017 14:42

DR_SMITH
Don't worry about the details too much.
You can't do anything until your broker contacts you.
Mainly by email nowadays.
They'll give details on what to do.
If you want to take up the rights, you will need 85p x however many rights you will be given, which will be almost half of what you probably have already paid for the shares you will have.
Personally, I will take up my rights, assuming the stockbrokers that I use don't con me out of them.

[bakunin] 01/3/2017 14:37

DR_SMITH
Actually. it looks like the brokers have to get letters of acceptance in by April 3rd.
So, there will only be a few days available to instruct brokers.
Seems a bit unusual for me.
Convinces me even more that this rights issue is seen by the City boys as a give-away.
They want as many PIs as possible to mis out.
Always remember that the City of London is full of crooks and your trading/investing performance will be much better.

[bakunin] 01/3/2017 14:18

DR_SMITH
Without looking, I think it goes XR on Mar 17th
So, you won't receive anything before then.
The XR period then usually lasts about 4 weeks, obviously to give time to people on holiday etc to act.
Brokers with nominees will receive the bumpf on their nominees' behalf on say March 18th. They then have 4 weeks to send letters/emails to all affected nominees, asking them to tell them what they want to do. They will need to aggregate all of the nominees' instructions and send them off with the money to the registrar. So, let's say the 4 weeks gets contracted to 3 weeks for these brokers.
Most brokers give you the full 3 weeks to act. Charles Stanley is very good at this.
The broker that I speak about basically gives you a couple of days. I missed out on one rights issue because of their "expiry" date than was a full 10 days before the end of the XR period. No amount of complaining did any good, even though there was still 10 days left! I remember that Charles Stanley once did a special for me, even though they had already sent off all their nominees' money, when I was late but within a few hours of the XR period ending.
Obviously, you have to have some spare dosh to take up rights.
So, a lot of PIs miss out.
Also, if your shares are in an ISA, you have to free up money to take up your rights. Because you may not be able to add money to your ISA, this might be difficult. A good broker, like Charles Stanley, will sell some of your rights so that you can take up the remaining ones.
Not wanting to drool too much over Charles Stanley, their fees are quite a bit higher than most of the other brokers. They were recommended to me by a stockbroker friend. If you need specials or to discuss how you can execute a big order etc, the extra fees are worth it.

[dr_smith] 01/3/2017 14:01

Thank-you Bakunin for your detailed reply. I appreciate it, to digest.
I was checking earlier, my broker (Youinvest) hasn't put any messages on my account yet as with some (takeover bids) and checking the Laird timetable, I assume it is still too soon for holders to nominate.
As we are past "posting" date, and these things I expect to be electronic, I am not sure when my account will have the facility to take up rights.
Has anyone had comms from their broker saying rights are now redeemable?

As a seperate issue, I have some in an ISA for which I have used my input quota for this year, so will have to sell other (good) holdings, just to redeem.. or let pass and theoretically lose out.

[bakunin] 01/3/2017 13:28

DR_SMITH
When LRD goes X-Rights, your rights are tradable. Anybody can buy them.
The rights give you the right to buy at 85p.
If LRD is trading at around 180p on XR day, the share price will drop to circa 135p.
The initial value of the rights will, therefore, be 135-85= 50p
The price of the rights will fluctuate with the share price, but the share price could be expected to be stable during the XR period.
If you have your shares in a nominee a/c, the default option will be not to take up the rights. Keep in mind that stock markets are rigged. The stockbroker that I mentioned gives its nominees next to no time to elect to take up rights, deliberately. If you're on a business trip when the letter arrives, you miss out. They will not take instructions outside of their administrative set-up.
If a good portion of the rights are not being taken up (the stockbrokers running nominee accounts will know this), in my view they manipulate the share price down in the last few days of the XR period, thus lowering the price of the rights. Those rights not taken up can then be snapped up in the final minutes of trading or in the auction or whatever ensues afterwards. If the stockbroker in question has a wealth management division, it is easy to see how they stand to benefit from inside knowledge and making it difficult for nominees to take up rights.
It all assumes, of course, that the share price goes back up after the XR period.
In my experience, more often than not it does, especially with companies like LRD that have a long track record of stable and growing operating performance.
After all, there is a reason for raising equity finance: in this case to put it on a solid financial footing for its operations.

[bookbroker] 01/3/2017 07:05

Much of the benefit of taking up rights naturally mitigated by price realignment, , investors have no option but to take them up, however new investors could do well to buy the right to buy!

[bookbroker] 01/3/2017 07:02

No winners here, co will be valued at £630mln, raising net £175mln, doubling number of shares nearly, but of course it is raising under one third of its existing mkt cap at deeply discounted price, so you are looking at new price post fund raising around the £1.20 mark!

[dr_smith] 28/2/2017 20:14

Thank-you Bakunin for your detailed reply.

If current owner buys RI they pay 85p.
If outsider buys up rights, I would assume the price to be set by Lairds brokers commensurate with the estimated post issue share price after market has adjusted (stated as 134.86)
So I don't understand why you say:
>so that those who end up buying your rights off you get a bargain.

[bakunin] 28/2/2017 19:37

Rights issues are "usually" a give-away to existing shareholders.
That's why there is such a big discount.
Given that, in the case of LRD, the reason for the RI is to shore up the B/S, debt is basically being replaced by equity, interest payments by dividend payments.
If the company is well-run, the outcome should be neutral for shareholders, apart from the fact that the cost of equity is usually higher than the cost of debt.
Hence the company will still need to "grow into" its higher market cap afterwards.
In my experience, if you don't take up your rights the share price gets manipulated downwards during the ex-rights period, so that those who end up buying your rights off you get a bargain. One of my stockbrokers games this by giving you a window of a couple of days in which to instruct them to take up rights. I have complained about this, but they carry on doing it. Often, their letter arrives too late and they even send out their email just before "their" expiration date for taking up rights. They are the only stockbroker who do this. The others give you 2-3 weeks at least. They are also a stockbroker that appears to run a dark pool and has a potential conflict of interest with its wealth management activity.
Fortunately, the current market cap is undervaluing the company imo, even if one were to assume no growth (£450m mcap for £50m underlying PBT post interest payments).
So, whether the share price rises will depend on the company's operating performance, as should always be the case.

[dr_smith] 28/2/2017 16:48

In my limited experience with rights issues, there is usually no free money, and if anything it is a way to increase holding without incuring stamp duty/brokers fees.

With the proposed issue:
--------------------------------------------
The issue price of 85 pence per New Share represents:

o a discount of 51.4% to the Closing Price on 27 February 2017 (being the last Business Day prior to the date of this announcement); and

o a 37.0% discount to the theoretical ex-rights price of 134.86 pence per New Share calculated by reference to the Closing Price on the same basis.
--------------------------------------------
I can't believe a buyer of rights can gain 37%.
Someone has to be a loser and if the loser is the company itself, then that means the retained shares will have lower value, so no net gain.

1) Is it therefore true to say, other things equal, there is no net gain to be had from buying in to rights, other than increasing holding at zero cost of duty/commission?

...except that:
2) Possibly any current holder who does not take up rights will likely incur a loss, by virtue of lower SP, being the balancing factor in any rights issue buyers gains?

My idle thoughts. DYOR. Other folks thoughts with previous experience of such issues appreciated.

[sutherlh] 28/2/2017 11:35

Nice partial recovery in the share price after the shock of the results, made less with more turnover. However the rights issue looks good value to me. I too have 1000 shares so will be picking up 800 more.

[analyzer] 28/2/2017 08:45

I know ... just wanted to clear them out and having made the right decision, missed the opportunity .... never had it where a whole order was not executed before !

[bookbroker] 28/2/2017 08:38

Don't worry, you are not exactly breaking the bank with 985 shares!

[analyzer] 28/2/2017 08:30

Bum ! I placed an order to sell my 1000 Laird last week, but only 15 were sold at 182.50 .... still sitting on 985 .... wish I wasn't !

[bookbroker] 28/2/2017 07:39

Might as well have offered 1 for 1!

[technowiz] 28/2/2017 07:28

RNS - rights issue

4 for 5 fully underwritten Rights Issue of 217,156,300 New Shares to raise gross proceeds of approximately £185 million (approximately £175 million net of expenses).

Issue price of 85 pence per New Share. oh dear!

[gordo58] 24/2/2017 09:16

hmmmm looks like I might have been a tad over optimistic.

[timothyjones2010] 23/2/2017 14:03

next tuesday results day

[gordo58] 22/2/2017 11:24

188p by friday close ? hmmmmm...... maybe :)

[bakunin] 20/2/2017 13:08

Still very surprised that nobody has moved to take them out. Putting the CFO in charge kind of led me to believe that those pulling the strings wanted the ship righted for that purpose.

[bakunin] 20/2/2017 13:04

Agreed. He does seem to have left a mess at Laird. And now we have the bean-counter (I mean CFO) in charge. Not looking brilliant from the strategic point of view, but the last TU did seem to suggest they were more or less back to normal, putting aside the acquisition-fed debt.

[bakunin] 20/2/2017 12:22

meijman
I think you'll find it was the previous American in charge at Cobham who screwed things up, signing glory contracts that weren't technically feasible. Or so I have been told by somebody in the know.
The fact still remains that virtually all UK CEOs are incompetent. They tend to get the job based on their contacts/ability to deceive and not the managerial expertise that they have acquired.
Have you noticed the trend in the major US tech companies to put Indians in the top jobs? They generally have very impressive academic qualifications and have acquired significant expertise within various echelons of management.
I'm not Indian, by the way. Just admire the way they strive to achieve, whereas the UK/west have stagnated in nepotism/lack of incentives to achieve.

[meijiman] 16/2/2017 08:34

I note the ex ceo is now bringing his own brand of magic to his new company-Cobham. Huge profits warning. Remind me to avoid any shares this person is involved with.

[meijiman] 13/2/2017 21:14

Disposal of division might mean no fund raising necessary? Or more modest rights issue than originally envisaged.