Aviva Share Discussion Threads

[salver2] 05/4/2021 22:01

What seems strange to me is how cheap Aviva is even after rising reasonably significantly undervalued-compare it to RSA -RSA market cap 7 billion -Aviva 16 Billion -RSA trades at 55 percent premium to book Aviva 25 percent discount -Aviva even taking out all its cash still will make 4 times RSA and yet its market cap is just over double -for parity Aviva should be around 7 pounds a share not 4?

[kenmitch] 05/4/2021 19:33

klotzak.

Though I agree with you that the logical time for a bid is when the share price was bombed out, bids then are rare. As with buybacks, bids so often happen at way above the bargain price they could have got or paid. So it’s still possible Aviva, which still looks good value, could tempt a bidder. ITV has often been touted as a very likely bid target for years, including by the excellent Naked Trader/Robbie Burns. Yet there was no bid when the share fell to around 50p. And though the ITV share price has way more than doubled from that low, a bid is still possible.

[harleymaxwell] 05/4/2021 18:54

did RSA do a cleansing if it's overseas business before it's sale? Italy , Mid East Chile maybe others were sold off?

[klotzak] 05/4/2021 15:51

Spud, I would have thought that if it was going to be snapped up it would of been when the share price began with a 2, the new owner could of split it up like Amanda Blanc and had the core for absolute peanuts.When the price started with ab2 there was no light at the end of the tunnel, and no money to do it.I think Spud is right, if you are going to do it you do it when there's a healthy cash balance to help you fund it. The next month May be interesting, or could actually be quite dull. Who knows!

[harleymaxwell] 03/4/2021 20:29

coincidentally chubb just got rebufffed trying to buy hartford in the usa.

[brilltrader] 03/4/2021 19:30

Well how many of us on this BB fancy giving it a go. If we can use the cash to buy it then maybe we should. We can then break it up and sell the core. At least that way we are working to put money in shareholders pockets not a bunch of faceless asset strippers!

[luzley] 03/4/2021 17:34

When the shareprice began with a 2 none of the divested businesses had been sold. The picture is now far clearer and the slimmed down core plus cash is far more attractive one would think.......interesting times ahead whatever the future holds.

[t 34] 03/4/2021 17:27

So the takeover is on the card . But not without the bidding war .

[father jack1] 03/4/2021 14:40

Being snapped up when there was a 2 in the front was never going to fly. The starting point for any board worth their salt is what was the price before the crash. It was around 420p so once you add on the requisite takeover premium, you are looking at 580p minimum.

[p0pper] 03/4/2021 13:51

Spud3 Apr '21 - 10:38 - 8017 of 8019
0 1 0
If it’s going to get snapped up, then it’s pretty much now or never.

spud

Spud, I would have thought that if it was going to be snapped up it would of been when the share price began with a 2, the new owner could of split it up like Amanda Blanc and had the core for absolute peanuts.

[salver2] 03/4/2021 12:40

I think the price would have to be 6 pounds plus ( about 24 million ) which would be about 12 times earnings-I can’t really understand why the shares are so cheap still

[whatsup32] 03/4/2021 12:06

Aviva current capitalisation £16 Billion
Aviva NAV £20.56Billion
Trading 20% below net asset value

With cash £7.5Billion coming in any interested party should be able to offer £20B and not have to put up any of their own money.

[spud] 03/4/2021 10:38

If it's going to get snapped up, then it's pretty much now or never. spud

[t 34] 03/4/2021 10:30

£7.5 bln ready to be distributed to shareholders. Good thing on principle but this cash can be invested with high return in any assets around the world.Someone must be tempted by this lump of cash . I also think about a takeover.

[harleymaxwell] 03/4/2021 10:01

just wonder whether the cleaning of its overseas biz leads to a buyer...

[cassini] 02/4/2021 22:20

T34,

To be fair, it looks like Aviva (or whatever it was called then) was floated in 1998 and that was an era of irrational exuberance and the dot.com boom.

Eyeballing the long term chart perhaps 700p is more like a long term average for Aviva. Not recently of course.

I'm still optimistic though that 500p is a possibility in the next 18 months.

[t 34] 02/4/2021 18:46

Year 1998 , the price above £12 .

[whatsup32] 02/4/2021 17:04

Flood insurance in USA will cost a lot more. Maybe here too and around the world ?

[whatsup32] 02/4/2021 15:46

X div. 14p next Thursday, I’m hopeful of 2 positive days before that.

[thetrotsky] 02/4/2021 15:02

scrwal, As I said previously, DGOC is a UK incorporated plc (it was incorporated on 31 July 2014 with company registration number 09156132) so you don't need to complete a W-8BEN because the dividend is being declared and paid by a UK plc. A W-8BEN is a US Internal Reveue Service tax form and is required to be completed by an entity, or an indiviudal, that is in receipt of US income. As such, it's DGOC that is in receipt of US income (dividends from its US subsidiaries), not its shareholders, and therefore DGOC would be required to complete the requisite forms, not its shareholders. If you needed a W-8BEN for DGOC, then you'd need a W-8BEN for most of the FTSE constituents that have US subsidiaries! If ii is not charging SDRT and requires you to complete a W-8BEN then it would appear that ii has just assumed, incorrectly, that DGOC is a US incorporated company without actually checking. Since DGOC moved from AIM to the main market SDRT is payable on any DGOC shares you buy because it's a UK plc (as an aside, you'd also have to pay SDRT if it was US company with a share register in the UK). To be honest it's an easy mistake to make, I would have assumed for all the world that DGOC was a US incorporated company if I hadn't first checked. I checked because I was charged SDRT by AJ Bell, which I hadn't expected - thinking it was a US company ;-)

PS. If you haven't completed a W-8BEN (in my experience both ii and AJ Bell oblige you to do so before allowing you to buy US shares) and your broker is witholding tax on your DGOC dividends then I believe they have erred (for the reasons outlined above) and you should tell them to go and double check with their internal compliance team.

[scrwal] 02/4/2021 13:46

TheTrotsky - the problem with DGOC is that you need the W-8BEN to mitigate the US withholding tax. Also the stock is treated differently by brokers as to whether you can buy it without the W-8BEN and whether or nor you get charged stamp duty on the purchase ,ii don't others do.

[thetrotsky] 02/4/2021 08:01

Cassini/scrwal, It's been my experience that ii (and AJ Bell) won't allow you to purchase a US corporate entity listed on the LSE unless you have completed a W-8BEN questionnaire. However, just because a company pays dividends in a foreign currency, one shouldn't just assume that it's necessarily overseas incorporated. DGOC and Vodafone are cases in point. Both are UK incporporated companies that have elected to prepare their accounts, and pay dividends, in foreign currency because their businesses are predominantly based overseas. So, DGOC prepares its accounts and pays dividends in US$ whilst Vodafone (now) prepares its accounts and pays dividends in euros (it derives over 50% of its income from the EU, primarily Germany).

[thetrotsky] 02/4/2021 07:48

Cassini, You may be overthinking the problem. Although DGOC's trading subsidiaries are US-based, DGOC is itself actually a UK incorporated company (its accounts can be found at Companies House). It's not, as far as I am aware, an LSE requirement but it would seem that DGOC underwent a corporate restructuring, with a new UK incorporated parent company, prior to its original listing on AIM (since transferred to the main market).

[cassini] 02/4/2021 03:30

scrwal1 Apr '21 - 12:32 - 8004 of 8005

scrwal,

Thanks for that tip. I had a look and no, I have not filled out a W-8BEN in my SIPP - at least, I can get the form up on ii via the route you suggest but it says 'no data'.

I think I may have an explanation for why I think I own a US stock, apparently have no W-8BEN and am getting the full untaxed dividend (3.75c, for instance for the August divi for DGOC - Diversified Gas and Oil).

It may be because DGOC, although a US domiciled company that pays dividends in USD, is listed on the LSE (FTSE 250).

The ii 'useful forms' page says that I need a W-8BEN to buy US listed stocks. Well then, despite being as American as apple pie, by being listed on the LSE perhaps it actually isn't US listed. It's all I can think of.

[rmillaree] 01/4/2021 20:17

1robbob

"I am certainly no Tax expert, especially on ‘Special Dividends’ but could it be that if AV distributes £4bn as a Special Dividend that they will have to pay additional Corporation Tax of £1.23bn? rest assured that HMRC will want to have it’s ‘pound of flesh’?"

Thats simply not the case 1robbob there is no extra pound of flesh needed.

the company simply pays corporation tax on profits generated as has always been the case - there is categorically no extra corpration due in addition to that amount that is generated by making the later decision to pay out a huge wad as a special dividend.

thankfully most savvy investors pay very little by way of "dividend tax" unless they have have sufficient income that they can afford to pay it.