BG Group Share Discussion Threads

[spob] 24/12/2015 08:02

I'm guessing shell will not want to give any indication whatsoever of a dividend cut until after this deal completes

They may even promise to maintain it to appease shell shareholders and then stab them in the back afterwards LOL


It's a bit of a moral dilemma at the moment for the Shell board

They know at current oil prices the dividend payments are unsustainable

[karateboy] 24/12/2015 07:45

Thank you spob. So insentive should be to complete the take over before the next ex dividends date.

[spob] 24/12/2015 07:36

Current shell forecast yield is 123.4/1565 = 7.9%

I wouldn't bet the farm on that being maintained

[spob] 24/12/2015 07:21

No I mean any ex dividends declared by shell between now and the close of this deal.

Last year the Shell fourth quarter dividend went ex div on Thursday 12 Feb 2015 (approx 31p)




So if the deal has not been finalised before that approximate date this year then you would need to account for that dividend in your calculations


so for example 383 + [0.4454*(1565-31)] = 1066

discount = 1066/990 = 7.68%


This is just an example. Shell may decide that paying such a generous dividend in the current climate is totally NUTS! :)

[karateboy] 23/12/2015 21:56

Thank you spob. I assume (RDSB-dives) means , these initial RSDB shares do not attract any dividend until after a year. Is that correct? Using current SDSB share price, BG share currently worth £10.80.

[spob] 23/12/2015 18:06

Offer = 383p + [0.4454 * (RDSB - divs)]

[karateboy] 23/12/2015 17:45

With share price increased by 10% last two days, what is the discount to the Shell take over offer now ?

[spob] 23/12/2015 16:10

FT blog today


11:28AM
BE

BG-Shell then?
PM

Sure
BG Group PLC (BG.:LSE): Last: 974.20, up 44.5 (+4.79%), High: 974.30, Low: 933.80, Volume: 3.02m
BE

The usual slew of press coverage, which I’ll ignore for the moment.
BE

Because there’s something much more interesting out of Olivetree this morning.
BE

Olivetree sent over a 5mb spreadsheet of RDS/BG holders and their trading patterns over the past year.
BE

As in, ~10,000 transactions mapped through the life of the transaction.
PM

sheesh
BE

The conclusion — as you’d expect, they’re an arb — is that the deal goes through. But the working involved in reaching that conclusion is heroic.
PM

(there. gif gone. sorry)
BE

The current spread suggests that the market remains paranoid about risk of Royal Dutch Shell failing to win support from 50% of voting shareholders. Even ignoring our own first-hand feedback from this shareholder base (which makes us comfortable with the dynamics of the vote) – pure statistical analysis suggests that this risk should be modelled as a low probability event. We currently have break prices for BG and RDS of 704 and 1703 respectively, suggesting that the market is ascribing a 73% chance of the transaction completing. Clearly stating the obvious, but whichever way we approach the concept of shareholder risk, the chances of a successful deal are materially higher than the market currently models.

BE

And in terms of what the data say ….
BE

· 70% (18 of the top 26) of shareholders have increased their weighting in BG relative to Shell since the announcement of the deal.

· The relative weight of BG to RDS in the FTSE has gone from 22% to 33% over the life of the deal and 9 of these top 26 shareholders (35%) have upped their weight in BG in excess of this.

· The RDS votes owned by those disclosed holders who have increased their exposure to BG amount to 34%. Those that have increased in excess of the index reweighting amount to 5.7% of RDS votes.

· Modelling a 65% turnout at the forthcoming RDS EGM would suggest a voting power of 68% and 11.4% respectively of these groups.

· We can look at the behaviour of the top 5 RDS shareholders: Capital we discuss below, but Blackrock, as the largest RDS holder have increased their BG position (# shares) by 2%, and in RDS by an identical percentage. Legal & General have decreased BG by 1% and decreased RDS by 0.3%. State Street have decreased BG by 10% and RDS by 6.5%. Aberdeen have decreased their BG holding by 10% and decreased their RDS position by 8%.

· Of those that have NOT increased their BG weighting, we only have Qatar (1.36% of RDS, and the press lead us to believe are supportive), T Rowe (81bps), Capital (3.87%), Wellington (17bps) and Threadneedle (94bps). Summing these entities gives 7.15% of the Shell register, obviously heavily skewed towards Capital and Qatar. Threadneedle have added materially to RDS positions since the start of the transaction.

BE

Contact Olivetree directly for the full spreadsheet.

[badtime] 23/12/2015 13:23

Lovely rise

[gary1966] 22/12/2015 10:08

Or their trying to get Shell shares even cheaper by driving down BG share price with these stories and picking them up at the lows.

[choktaw] 22/12/2015 09:24

Probably, you know these brokers haven't got a clue :-)

[emptyend] 22/12/2015 09:13

.....is that why BG's share price is rising this morning, choktaw?

[choktaw] 22/12/2015 09:09

BG Group (+3.13%); It has been reported this morning that the Shell/ BG merger deal may collapse (AlphaValue says). Shell would only have to pay $800m to stop the deal as opposed to the merger price of $13bn. Given the price of oil is now half of where it was when the deal was struck last April, some investors are selling BG and buying Shell in order to play the bid collapse theory.

[gary1966] 22/12/2015 08:40

Monty,

It won't be around in 12 months if Shell walk away. BG have attractive assets that will help diversify other majors. Shell needs BG as much as BG needs Shell. As the note in post 37 says too much time and energy spent on this deal for it to be tinkered with or collapse now. Nothing in the announcements from the companies suggests anything going on behind the scenes to change the terms of the deal. Prospectus out in the next few days to re-affirm the terms of the deal. I guess there is a chance of institutions that will decide the fete of the deal could be working in concert and heavily shorting BG and going long Shell but I am sure there are rules about this.

ATB whatever anyone decides to do.

[montyhedge] 22/12/2015 07:39

Shell should walk away, BG falls to 650p, then come back in 12 months buy them cheaper.In the meantime Shell shares trading around 2000p.

[badtime] 21/12/2015 20:55

22? In your dreams

[montyhedge] 21/12/2015 20:41

I hope deal off, Shell will to bounce to £22 if they call it off.

[gary1966] 21/12/2015 19:56

Deal will go through. Re-read spob post 37. This deal has taken an awful lot of time, effort and money to get it to this point. Companies of this size do not pull out of deals like this. Take the opportunity that the market is offering.

GLA

[84stewart] 21/12/2015 19:01

No thumbs down fund bought 12.4 months shares ,what sorry no can do

[essentialinvestor] 21/12/2015 18:31

I meant on RDSB mick, apologies on the ambiguity of the post.

[mick] 21/12/2015 18:15

Query to Essentialinvestor, presumable if the deal is not approved by Shell share holders the BG price will plummet rather than increase? I agree the Shell price is likely to increase in that eventuality.

Am I missing something?

Thanks

[essentialinvestor] 21/12/2015 17:33

Well if they walk you are looking at 6-7% up on that announcement imv.

In terms of the commodity low agree Q1-Q2 '16 may be an interesting
timeframe.

Would expect SP's to begin to bounce before the ultimate commodity lows.

[wipo1] 21/12/2015 17:04

I am watching with interest, very high volume today. I am still not sure if the merger will go ahead or not, the market giving it thumbs down by the looks of it!