Severn Trent Share Discussion Threads

[redartbmud] 10/6/2013 09:15

MIATA

Agreed on the turkeys comment.

red

[miata] 10/6/2013 09:02

I can (per post 527) turkeys don't vote for Christmas.

[redartbmud] 10/6/2013 08:59

Trader

Thanks. i cannot understand the arrogance of the board.

Best of luck with the CGT.

red

[tradermichael] 10/6/2013 08:50

red, its disappointing that the Consortium couldn't raise the level of funding required by the Board to make the offer viable. Its also disappointing that there will probably be a slow drift back down to the 1700's as the market will not value the company as much as the board. Accordingly, I have SOLD my long standing holding and intend to buy back cheaper in due course (probably on 21 June on xd day).

Now I am faced with the tax man's paperwork for CGT. If anyone held their shares before the BIFFA demerger in October 2006 (like me), here's how to determine the base cost of the consolidated SVT shares:

12 Oct 2006

Demerger of Biffa Plc - Capital Gains Tax

For the purpose of Capital Gains Tax calculations the base cost of the old Severn Trent Plc (?Severn Trent?) shares you held immediately prior to the demerger and share consolidation must be apportioned between your new Severn Trent shares and the Biffa shares received in the following ratio: new Severn Trent shares 78.7%, Biffa shares 21.3%. This is based on:

* the dividend ratio of one Biffa share for each old Severn Trent share held;

* the consolidation of the Severn Trent shares in the ratio of two new Severn Trent shares for every three old Severn Trent shares held;

* a fractional entitlement, by way of cash, for any fraction of a new Severn Trent share as a result of the consolidation; and

* the respective market values on 9 October 2006, determined according to normal CGT rules, of 1440.00 pence for new Severn Trent shares and 259.88 pence for Biffa shares.

For example if you owned 1,000 old Severn Trent shares immediately before the demerger and share consolidation, with a previous base cost of ?5.00 per share (a total base cost of ?5,000) the base cost for CGT purposes of the 666 new Severn Trent shares held after the demerger and share consolidation would be ?3,935 (less the fractional entitlement payment) and the base cost of the 1,000 Biffa shares you received in the demerger would be ?1,065. For CGT purposes the base cost of the new Severn Trent shares is adjusted to reflect any fractional payments received.

Please note that if your Severn Trent shares were acquired in a number of transactions at different prices or if you also own other Biffa shares, the determination of the base cost of the shares you sell will also depend on the CGT matching rules. If you are in any doubt about your taxation position you should obtain professional advice.

[redartbmud] 10/6/2013 08:41

Nobody jumping up & down then.
I must be the only SVT shareholder around, or the one still alive I supppose.

red

[redartbmud] 09/6/2013 22:14

Share price headed south tomorrow?

[redartbmud] 09/6/2013 22:11

The £5.3 billion bid, valuing Severn at £22 a share, was dismissed by the firm's board within hours of being tabled on Friday.

Severn, which supplies 4.2 million customers across the Midlands and parts of Wales, said it failed to recognise the long-term value or future potential of the company.

It means the LongRiver consortium must decide whether to put in a new, fourth offer before the expiry of Tuesday's "put up or shut up" deadline or to walk away.

The bidders, comprised of Canadian investment group Borealis, the Kuwait Investment Office and Universities Superannuation scheme, previously had a
The £5.3 billion bid, valuing Severn at £22 a share, was dismissed by the firm's board within hours of being tabled on Friday.

Severn, which supplies 4.2 million customers across the Midlands and parts of Wales, said it failed to recognise the long-term value or future potential of the company.

It means the LongRiver consortium must decide whether to put in a new, fourth offer before the expiry of Tuesday's "put up or shut up" deadline or to walk away.

The bidders, comprised of Canadian investment group Borealis, the Kuwait Investment Office and Universities Superannuation scheme, previously had a £4.96 billion bid rejected.

It is thought that the consortium has grown increasingly concerned at what it perceives as the water company's lack of engagement with it.

Rejecting the latest offer on Friday, Severn's chairman Andrew Duff said: "We have held private conversations with LongRiver and made clear that we have no objections to fuller discussions in the event that LongRiver puts forward a proposal which properly reflects the long term value and future potential of Severn Trent."

But he added that the board unanimously agreed that the bid was not high enough.

It was reported that an increase of around 40p a share would be enough to bring Severn to the table. But LongRiver is thought to be determined that there must be a meeting with the water firm's board before any move can take place.

British water companies are prized by investors such as pension funds, sovereign wealth groups and private equity firms for their monopoly over customers and relatively stable earnings, which are tied to inflation.

Extracted from the Express & Star newspaper, a publication based in Wolverhampton.

[holts] 07/6/2013 18:50

What are they paying above the price at the beginning of the year , a few years divis, might as well keep the shares, only fly maybe is ofwat .

[linhur] 07/6/2013 18:11

I think BOD should reject this offer.

There is a proposal from OFWAT which I believe is still a consultation and not regulation that water should be able to travel around the country in order that water companies could compete for commercial business in their non geographical area. As SVT is centrally based in England and they have the ability to move water from north to south, they should benefit from their geographical position and be able to charge other organisations for the costs of moving water around and a possible royalty for use of their pipes and waterways similar to movements in other liquids in other industries. I do think this possibility has been factored into the bid price.

Linhur

[miata] 07/6/2013 16:01

Not. Clearly insufficient.

Just possible we might get another offer on Monday but I'm not holding my breath.

[redartbmud] 07/6/2013 15:34

Is this thread dead?

Joy or not at latest offer?

red

[jeffian] 04/6/2013 17:48

You're being a bit harsh. I've been in this position (OK - a bit smaller!) and there are pretty strict takeover rules for FTSE companies. The Directors can't just act on a whim, or personal opinion; they have to be advised by Nomads and Merchant Bankers regarding the value of the approach and whether it should be recommended or rejected.


Rothschild (financial adviser to Severn Trent)
Crispin Wright [phone]

Citi (financial adviser to Severn Trent)
Simon Lindsay [phone]

Barclays (financial adviser and corporate broker to Severn Trent)
Alisdair Gayne [phone]

Morgan Stanley (financial adviser and corporate broker to Severn Trent)

[funtimejonny] 04/6/2013 17:38

Emm. That is always a condideration and a potential problem. Guys hanging on to very highly paid jobs. Chances are that if they were in there sixties and had plenty of options, they would sell out at the drop of a hat.

[funtimejonny] 04/6/2013 15:25

That is what I am expecting as well. Perhaps around the £23 mark? Have been topping up a bit.

[miata] 04/6/2013 15:07

My grasp is that someone else will bid sooner or later.

[funtimejonny] 04/6/2013 15:04

She has indeed. Institutional Investors still showing interest here though. Mind you, I am always struggling to understand their positions in these type of scenarios, With buys/ sells / shorts / longs / cfds all showing up, it tends to baffle me a little bit. More sophisticated types may be able to grasp this better tham I.

[miata] 04/6/2013 14:47

She has only a week to produce another song.

[funtimejonny] 04/6/2013 14:42

It's never over until the fat lady sings!

[redartbmud] 04/6/2013 14:19

Looks like this deal is dead.

[miata] 03/6/2013 13:26

Presumably they are not interested in paying down the debt while it is a cheaper source of capital than raising additional equity funding.

[mroalan] 03/6/2013 13:18

Miata, yes i fully understand what you are saying, but the debt keeps growing as does the interest to pay on the debt, why are they not interested in paying dowwn the debt, it looks like a ponzi scheme to me.

[tradermichael] 03/6/2013 12:04

It seems like the dividend is getting in the way of the valuation/bid.

2079.5p is the offer.

[funtimejonny] 03/6/2013 10:55

The revised offer certainly fell short of expectations.

[alchemy30] 03/6/2013 09:52

will they walk now