Aviva Share Discussion Threads

[wadders5] 10/1/2021 09:24

Can you expand on this please. What are the different tax implications for the various options?

[dr biotech] 10/1/2021 09:04

Last year I made more in capital gains than I did with dividends and would prefer a special (admittedly given my AV are with my ISA it makes little difference). But there will be plenty like me too, plus a whole army of small holders from the Norwhich union days - I seem to recall that’s 450,000 (there are 540000 private investors that hold 6% of the company). Having to offer a tender to them would be a nightmare.

But tbh, I just want these to go up or be sold as after holding them for c10 years with no capital gain I’m a little fed up.

[wskill] 10/1/2021 08:39

Cjac39 I thought this is the plan anyway and the reason we are moving at pace ,I am sure that the institution have given AB her orders how long can they keep banging their heads against the wall with Aviva it's time it was broken up and sold.

[dekle] 10/1/2021 08:30

Good point if you haven't got them in an ISA or SIPP and the dividend tax free allowance has been exceeded

[cjac39] 10/1/2021 08:27

I do wonder how they get to hold together the post sale business. Canada is an oddity to the U.K. Ireland business providing zero synergistic value. It had bad couple of years pre covid so I suspect they are only holding till it normalises and then that gets chop. In any case it’s not that material to overall value.

So the qn is does a composite U.K. business still make sense or ultimately should the U.K. also be broken into 2 separate businesses with phnx buying the heritage.

There aren’t many who could swing at 75bln of annuities but it might be in reach of Rothesay in time.

With 100mln of bloated head office costs it strikes me that once Europe and Asia is gone aviva looks more vulnerable for break up which is of course the best outcome for shareholders

[mountpleasant] 10/1/2021 08:14

Unfair to higher income tax rate payers,
would be fairer to make tender offer.

[dekle] 10/1/2021 07:05

In my opinion buy backs only work if the share price does not reflect the true net worth of the business. Since the enterprise is now smaller due to the sale of subsidiaries it would seem to me a special dividend to be the fairest distribution of the funds. Naturally the price will fall after going ex-div but the special dividend should compensate. The confidence of good yield going forward from future dividends will underpin the share price. This is just how I see it, you are welcome to your own views.

[1wenty] 09/1/2021 23:37

This rather interesting exchange highlights the shortcomings of the current AV strategy in that the long term goal is unclear. Is the aim long term value for shareholders or just fatten the pig ready for market.

[1robbob] 09/1/2021 18:09

Even though announcements on disposals will be made in Q1 and Q2 - It is highly unlikely that these deals will be fully completed before Q4, thus any material proceeds from Asset sales will not be received until Q4 at the earliest

As long as AB makes the Special Dividend policy clear as soon as possible, the prospect will substatially underwrite/support the share price until the Special(s) are paid perhaps in Q2 2022

[whatsup32] 09/1/2021 17:28

Point is it’s worked fine, MSFT buying their shares back from $50 odds to $200 worked out a bonanza for all shareholders both in dividends and capital gains.

I agree it’s not right for Aviva.

[1robbob] 09/1/2021 17:26

Spud....agreed

[1robbob] 09/1/2021 17:24

Lloyds Bank managed to buy back and the share price continued to fall.

Subsequently passed the div...so no dividends saved!!!

[spud] 09/1/2021 17:23

I would hazard a guess that Microsoft's stock would have skyrocketed (as per all big American tech) even without buybacks. spud

[whatsup32] 09/1/2021 17:17

Microsoft have been buying their shares back for over 10 years and over those years share price has multiplied. So buy backs can and do work.
However Kingfisher have done same and it’s been a disaster for them. In Aviva’s case i don’t believe board are looking for long term gain (buy backs are long term gains), boards intentions in my view is an exit strategy ASAP

[spud] 09/1/2021 17:02

Exactly! Buying back shares in a mega cap never translates back into the shareholders pocket. spud

[1robbob] 09/1/2021 16:43

1wenty I love your supreme optimism. Unfortunately it will never work out like that

How long would it take to buy in 25% of the equity without ramping up the share price against the buy in?
You suggest buying in 1bn shares. .I would suggest it would take years

What would be the average purchase price end up being?

I think your average purchase price would negate all the advantages you suggest

....Also I think there may be a Tax or Stock Exchange limit to the amount repurchased in a year at 5% (That could be wrong).

DON'T ENCOURAGE THEM TO DO IT.......PLEASE

[1wenty] 09/1/2021 16:18

I know that buy backs are an anathema to many so apologies in advance but it’s obvious that AV will have a lot of excess capital to return to long suffering shareholders. A special dividend will just march the share price up to the top of the hill and then march it down again. I know about the problems associated with buybacks in the past but if the shares offer outstanding value to investors then they should be even more attractive to the company itself. If AV were to reduce the number of shares by 25% the new rebased dividend would jump from 21p to 28p per share. They would yield 6.5% at £4.30. If they use their heads they could do this for £3.75bn or less and still have money to pay down debt.

[wba1] 09/1/2021 14:10

3.2bn sounds decent, although it will be interesting to see if this drives others away. If not 3.5 may be the take out price. As to what it is really worth, I take cjac's comment about own funds, but would be looking quite closely at a few things in due diligence;

* the value of the Aviva France 71% shareholding in UFF. Since this is quoted it is pretty easy to say it has a market value of at least 220m euro. Is it worth more since, in taking over Aviva France, a bidder will also get control of a bank?

* how much hidden value (or black holes) are in the GI reserves? Aviva France writes about 1.2 bn euro NWP per year so they will have substantial claims reserves (2-3 bn?). If they take the usual approach to reserving it would suggest 100m euro plus is in surplus claims reserves.

* how does a MACIF takeover sit with AFER? I assume this is not an issue given the importance of the AFER relationship.

* can MACIF (or any other bidders) leverage the Aviva France distribution channels (or the Aviva France products for their own channels)? This is usually where real benefit can be generated rather than in expense savings.

I can see such issues easily giving rise to benefits in excess of the 200m premium to own funds being offered.

[eurofox] 09/1/2021 13:13

what a busy board for a change - hope we're not disappointed if it takes a bit longer than this article might imply

[ianood] 09/1/2021 13:13

Thank you DR B.

[whatsup32] 09/1/2021 12:49

Good news, looks like my latest purchase at 4:27 PM yesterday may have been well timed.

Also in the news(The Times) new government in America is looking to inject $3.7 Trillion (yes trillion) into the economy to get it moving forward. This may be seen positive by markets in USA and here.

Roll on Monday, fully invested here.

[dr biotech] 09/1/2021 12:33

Initial estimates were for 2.5-3bn so this would be a decent sale. Will be interesting to see if anything pops up in the uk press tomorrow

[wskill] 09/1/2021 11:31

Think that the market will like this offer good to see a bidder has thrown their hat in the ring at a respectable price.

[cjac39] 09/1/2021 11:25

I thought own funds for France was £3bln - with all the messy stuff in here and unions and difficult regulators I’d take own funds all day long