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Real-Time news about National Grid (London Stock Exchange): 0 recent articles
|a0002577: Hmmm.... The share price is just slipping and sliding downwards now. Getting ever closer to my buy back in price. Any bets on how far it is going to fall?|
|gateside: #2 billion return of cash to shareholders
National Grid Transco plc ("National Grid Transco" or the "Company") announces
that it is posting a circular to its shareholders and convening an extraordinary
general meeting, to be held on 25 July 2005, to obtain shareholder approval for
the proposed return of #2 billion of cash to shareholders.
Return of cash to shareholders
On 1 June 2005 the Company announced the completion of the sales of four of its
gas distribution networks. As previously announced, #2 billion of the cash
proceeds from the sales will be used to fund a return of cash to shareholders of
65 pence per ordinary share. This return of cash is to be implemented through an
issue of B shares and a capital reorganisation and is subject to approval by
shareholders. Subject to such approval, shareholders will receive one B share
for every existing ordinary share, and will be able to elect between the
* Single B share dividend: to receive a single dividend of 65 pence per B
share for some or all of their B shares. Following this, the B shares for
which a shareholder has chosen to receive the single dividend payment will
automatically be converted into deferred shares which will have negligible
* Initial repurchase offer: to sell some or all of their B shares to
JPMorgan Cazenove for 65 pence per B share, free of all dealing expenses and
* Future repurchase offers: to retain some or all of their B shares and have
the opportunity to sell them on certain future dates for 65 pence per B
share, free of all dealing expenses and commissions.
Election forms in respect of these alternatives and the circular will be sent to
shareholders on or around 15 June 2005 along with the papers for the annual
general meeting to be held on 25 July 2005. Shareholders who do not elect for
any of these alternatives will by default receive the single B share dividend
for all of their B shares.
In conjunction with the return of cash, a capital reorganisation will be
undertaken. Existing ordinary shares will be subdivided and consolidated so that
shareholders will receive 43 new ordinary shares for every 49 existing ordinary
shares they own as at 5.00pm on 29 July 2005. The intention is that, subject to
normal market movements, the share price of one new ordinary share immediately
after listing should be approximately equal to the share price of one existing
ordinary share immediately beforehand. The ratio used for the capital
reorganisation has been set by reference to the closing price of 546 pence per
existing ordinary share on 3 June 2005 (being the latest practicable date prior
to the posting of documents to shareholders on 15 June 2005) after adjusting for
the proposed final dividend of 15.2 pence per existing ordinary share. New
ordinary shares will be traded on the London Stock Exchange in the same way as
existing ordinary shares and will be equivalent to the existing ordinary shares
in all material respects, including their dividend, voting and other rights. The
effect of the consolidation will be to reduce the number of issued ordinary
shares to reflect the return of 65 pence per B share to shareholders, but
shareholders will own the same proportion of National Grid Transco as they did
previously, subject to adjustments for fractional entitlements.
A number of changes to the articles of association of the Company are required
in order to implement the return of cash.
Full details of the return of cash and associated capital reorganisation are
contained in the circular.
A separate memorandum providing details of the return of cash will be sent to
holders of American Depositary Receipts ("ADRs") and shareholders with
registered addresses in the United States ("US Shareholders") to set out the
impact of the return of cash on their holdings in National Grid Transco. In
connection with the return of cash to holders of ADRs the Company will undertake
a tender offer pursuant to the United States Securities Exchange Act of 1934 (as
An extraordinary general meeting ("EGM") is being convened for 2.15pm or, if
later, immediately following the annual general meeting ("AGM") on 25 July 2005,
to seek shareholder approval for the return of cash to shareholders.
Expected timetable of principal events 2005
Ex-dividend date for the final dividend 8 June
Record date for the final dividend 10 June
Combined mailing of AGM and EGM papers 15 June
Latest time and date for receipt of form of proxy for EGM 2.15pm on 23 July
EGM 2.15pm on 25 July
Latest time and date for dealings in existing ordinary shares 4.30pm on 29 July
Record time and date for the capital reorganisation. Existing ordinary share 5.00pm on 29
register closed and existing ordinary shares disabled in CREST
New ordinary shares and B shares admitted to the Official List and admitted 8.00am on 1 August
to trading on the London Stock Exchange's market for listed securities
Dealings in the new ordinary shares and B shares commence and enablement in 8.00am on 1 August
CREST. New ordinary shares and B shares entered into CREST
Latest time for receipt of election forms and USE instructions from CREST 4.30pm on 5
holders in relation to the B share alternatives
B share record time and date 4.30pm on 5 August
Single B share dividend declared and B shares in respect of which the single 8 August
B share dividend is payable convert into deferred shares
JPMorgan Cazenove accepts B Shares for purchase under the initial repurchase 8 August
offer by means of an announcement on the Regulatory News Service of the
London Stock Exchange
Despatch of new ordinary share certificates, retained B share certificates, 22 August
sale advices, cheques in respect of the single B share dividend and/or B
shares purchased under the initial repurchase offer, as appropriate and
cheques for fractional entitlements, and CREST accounts credited
Final dividend payment date 24 August|
|clogue: The ratio for the share consolidation has not been announced.The split 87:100(above) would cap the share price at £5.
The ratio will depend on the share price at the time of the consolidation.|
|tiraider: gateside; thanks a lot, I was trying to work out an agenda for XD and X special D. I note that XD was 2/6 last year, and that special Div is probably due May / June also.
Those dates will have a big influence on the share price.
Would it be better to buy before or after I'm wondering...?|
|utyinv: Raj Bunta, Please see my comments from 15 Sept 04.
Though nothing is yet confirmed, National Grid have stated that there is intent to carry out a share consolidation. This may follow a similar strategy adopted when they last issued a special dividend from the part sale (£1 Billion worth)of Energis.
Esmeralda is right, this is intended to off-set a drop in share price but don't hold your breath. Initially, the price could go down as well, so you are hit with a double whammy. However, with the consolidation the share price should recover fast.
There are other ways of reducing the number of shares in circulation, like a share buy back, but that costs money, and National Grid still want to pursue other acquisitions.
Analysts see NGT as an income generating, long term investment.|
|dr agon: NGT is heading for the Wild West
National Grid Transco's CEO wants to expand in the risky US market. Andrew Murray-Watson asks him why
Roger Urwin, the chief executive of National Grid Transco, is perturbed that his company's share price did not rise by a single penny after it announced the successful £5.8bn sale of four of its regional gas distribution businesses.
Not only did NGT apparently get a good price, but the deals showed the world that the value of assets retained is rather more than the market had thought. What's more, NGT is to hand back £2bn to shareholders.
Roger Urwin and Steve Holliday
So, all things considered, the news wasn't bad. However, the disposal had been mooted for months.
And when it was announced, the hedge funds - the bane of CEOs' lives - cashed in their profits, which put something of a dampener on the share price.
Perhaps more importantly, not all investors are enamoured of NGT's plans to expand in the US, regarded as the Wild West for energy companies, compared with the staid, reliable UK.
Anyway, the price to be received by NGT for the quartet of businesses represents a premium of 14 per cent to their so-called regulated asset value (or what the energy watchdog, Ofgem, thinks they are worth).
Fraser McLaren, an analyst at ING, the bank, says: "NGT has exceeded our expectations by delivering an additional £760m of value from the sales . . . We maintain our 'buy' stance."
Talking to The Telegraph, Urwin insists that NGT as the seller was a clear winner: "Not every one of the bidders got their preferred choice," he says.
"But we chose the exact scenario that for us made the most sense."
Credit Suisse First Boston and Cazenove both raised their targets on NGT by 15p to 482p and 505p respectively, compared with the current share price of 467.25p.
So what about the concern that NGT is reducing the size of its safe UK regulated core business to devote time and money pursuing unspecified US acquisitions?
"At a time when the market is in love with utility stocks because they are so predictable, NGT appears to be off big-game hunting in the US," says an analyst.
McLaren says: "The market should be relieved that £2bn of the proceeds [65p per share] is being returned to shareholders rather than being deployed for acquisitions in the US."
Urwin is not impressed with the negative implication of that view. He believes that NGT would be mad to ignore the superior returns available in the US: "We are already in the top 10 of the 160 investor-owned power companies in the US," he points out.
"The returns we get from the US are going to increase. In the medium-term, there is not a shadow of a doubt that the US represents a very good proposition."
And he cites the "the obvious benefits of consolidation in a very fragmented market".
NGT's businesses in the US include Niagara Mohawk Holdings, Massachusetts Eletric, Narragansett Electric, Granite State Electric and Nantucket Electric. They generate a third of NGT's group operating profit.
NGT has failed to augment this list of US businesses in New England and New York over the last two years, despite looking at a number of possible takeovers and making the occasional offer.
"You have to do it [a takeover] on an agreed basis," Unwin says, before launching into an unfortunate analogy. "In these companies, an enormous amount of stick is held by small shareholders that will follow management around like lemmings."
McLaren says that the US regulatory climate (which limits incentives to becoming more efficient) and the high price of target companies has held back NGT's US expansion.
By contrast, Urwin is a fan of US regulation. He says that US energy groups are less reactive in their respective relationships with the local regulator than their British rivals are with Ofgem.
Urwin believes that it's also a great boon that the US regulator sets prices for up to 20 years. This, he says, allows energy companies to squeeze better long-term returns than is possible in the UK, where the regulator sets prices every five years.
So why are British shareholders so nervous? Well, many UK companies have gone to the US with a strategy that seemed brilliant on paper but ended in painful losses. Urwin has proved that he can sell well, but has still to demonstrate his purchasing prowess.|
|verynervy: Everybody seems to be interested in the pipelines - should mean a good price will be obtaained - can only be good for NGT share price!!!!!|
If they sell the ldz's for the correct price they will not need 'Transco' anymore. Whether NGT will still have a role in maintaining the pipelines nationally I am not sure. They may maintain the safety function (at a cost to the ldz's). Anything is possible. Whilst I respect your concerns over safety I don't think the issue is a show stopper. After all, not all things in life are run as 'monopolies' and we still survive :)
The question is: if the ldz's are sold what will it do the NGT share price? My own view is that NGT will be on a nice little earner, and, they will be better positioned to return value to shareholders.
Are you saying that only BG and now NGT are capable of dealing with gas escapes? And how does this affect NGT share price once ldz's are sold?|
|sniffer333: The sale of these 'regional' gas networks takes them out of the hands of a monopoly and puts them into the hands of 'multiple' monopolies. If Ofgem didn't have a problem with NGT running them I can't see Ofgem having a problem with the proposed new ownership structure. Why would Ofgem now want more 'safeguards' other than to ensure the new owners are financially sound?
This looks like good news for the NGT share price. As an ex BG employee I am saddened at how much my old company has changed and has been broken up into diverse segments but there is no room for sentiment in business or the stock market. Each company has to prosper or it fails. NGT needs to shift up a gear and divesting itself of the gas networks will provide the funds it desperately needs.
National Grid share price data is direct from the London Stock Exchange