Chesnara Share Discussion Threads

[bonnard] 06/8/2007 21:17

nwb,

CSN has more or less all its holdings in bonds and cash. It shouldn't really track the stock market - but is pulled about a bit by sentiment. The dividend is secure and there is spare cash in the bank which could result in a special additional dividend. Tipped as a buy in Inv Chron last week.

[nwb] 06/8/2007 20:14

Any observations on how secure the income and dividend on this is? I dont really understand what pressures apply to managing closed life funds. But with a current yield of over 7.5%, and an my understanding they are relatively sheltered from economic pressures it appears a good yield stock.

[tole] 30/7/2007 16:39

Nice bounce back and closing price equalling its last move up - reckon someone is quietly picking up stock here with that 75k buy :))

[tole] 29/7/2007 12:06

Well good to see Pearl on the hunt with Resolution...hopefully they will both be taking a look here in time :)


Pearl-Resolution zombie fund showdown
Ben Marlow and Andrew Foxwell, Financial Mail
29 July 2007, 11:09am

Rival entrepreneurs Hugh Osmond and Clive Cowdery will meet this week for crunch talks over who will control Britain's zombie fund sector - insurance funds that are closed to new business.

Talks are expected after Osmond's Pearl Assurance emerged as a 16% stakeholder in Cowdery's Resolution Life. Merger discussions are expected to follow.
Osmond's daring move last week all but scuppered Resolution's £8.6bn merger with insurer Friends Provident, agreed a day earlier.

It is understood the controversial pizza-to-pubs entrepreneur would like to combine Pearl and Resolution, which he thinks would generate more shareholder value than the Friends deal.

Resolution intends to pursue a deal with Friends, but sources close to Cowdery said he would listen to any proposal to create more value for shareholders.

Cowdery's stake in the business is worth about £130m.

Resolution's agreement with Friends Provident has raised questions among shareholders of both firms.

Resolution has focused on buying zombie funds, but the Friends deal has been interpreted by many as signalling that the business model has run its course.

Meanwhile, Pearl and Resolution have dropped out of bidding for Abbey Life, the closed life fund. Swiss Re is the frontrunner against Deutsche Bank.

[tole] 28/7/2007 12:20

Market wobble giving a nice dip - back to where it started pre IC tip.

[tole] 23/7/2007 12:24

Merger sees insurance stocks rise
23 July 2007

Consolidation hopes for the insurance sector drove the London market forward as Friends Provident and Resolution confirmed merger talks.

Friends Provident soared more than 7%, with news of the potential £8.3 billion merger also lifting Legal & General, Prudential and Standard Life.

The FTSE 100 Index rallied 25.7 points to 6610.9 with the insurance sector accounting for three of the top four risers



Zombie merger talks may spark bidding war

Graeme Wearden and Phillip Inman
Monday July 23, 2007
Guardian Unlimited

Shares in UK insurance companies opened higher this morning amid speculation of a bidding war for Friends Provident.

Resolution, the insurer that specialises in closed life insurance funds, known as 'zombie funds', announced this morning that it is in merger talks with Friends.

In a short statement to the stock exchange, it said the two companies believe "a merger would create significant value for both sets of shareholders".

Resolution's shareholders would own 50.9% of the combined business, with Friends' investors owning 49.1%.

Friends Provident's shares rose by over 7% this morning, gaining 13.6p to 200p. This fuelled speculation that another insurer could try and steal Resolution's prize by launching a rival bid.

Shares in Standard Life, which is known to be interested in Friends, gained 4.5p to 328p, a rise of 1.39%. Shares in Resolution itself were up 2.38% to 644p, gaining 15p.

It is understood that senior executives from Friends and Resolution met over the weekend to discuss the terms of a possible merger, and hope to hammer out an outline agreement within two weeks. The combined company would be worth more than £8bn.

Tim Young, analyst at Collins Stewart, believes a merger would transform the sector.

"This creates a group larger than Standard Life and only marginally smaller than Legal & General. Friends Provident was going nowhere at a rapid pace and Resolution will - as it did with Britannic and Royal & SunAlliance's UK life business - deliver significant value to shareholders," said Mr Young.

Resolution is Britain's biggest manager of closed life insurance or zombie funds. People who have invested in them cannot escape without paying high exit penalties, while their returns will probably be below average if they stay in the fund.

In the last two years Resolution has quadrupled in size by acquiring zombie funds, and through buying Abbey's life business last year. It recently agreed an outsourcing deal with Capita, which starts in August.

Today, it said there were significant potential synergies from combining the Capita deal with the "already highly efficient nature of Friends Provident's back office processing".

[tole] 23/7/2007 08:30

Got to also think that this one must be a takeover target from the larger two - Pearl and Resolution.

I remember this being muted about at the beginning of the year...



Seven shares to watch in 2007
By Nick Louth
December 28 2006


Chesnara

Chesnara was floated in May 2004 to hold the 110,000 mortgage endowment policies of the Countrywide estate agency. The life book is closed, with no new endowment customers taken on, though the firm still has a small business selling guaranteed bonds. The existing with-profits policies which are now almost exclusively in safe assets like cash and gilt-edged stocks, generate heaps of cash.

It does this by releasing capital and provisions as policies either mature or are cashed in by customers. That allows the firm to offer a massive dividend yield of 7.2% with an expected growth in payouts of 3% a year. Chesnara has been growing strongly by acquisition, but it is actually more likely to be bought up by a larger outfit such as Hugh Osmond's Pearl Group. If this doesn't happen, there won't be much upside in the share price, but the dividend payout is a nice income stream anyway.


Anyway interest today with the sector news with the potential Resolution/Friends Provident Merger.

[tole] 20/7/2007 11:54

Thx Ian.

Still believe they are looking at around 20 potential opportunities on the life business as previously commented...however what is a circa 8% yield is attractive in my eyes.

June 15 (Bloomberg) -- Chesnara Plc, a U.K. administrator of closed life-insurance funds, is ``patient'' for deals to emerge and forecasts it may be able to consider acquisitions from about 20 companies in the U.K., Chief Executive Officer Graham Kettleborough said.

On Chesnara's prospects for buying an insurance company or unit:

``We are still on the look-out for deals. It is rather quiet but we are being patient. We still believe there are companies who will come to market. It is very hard to make money from new life insurance and pensions business. It is a shrinking market with declining margins. There will be some small companies that realize they are not making enough returns for their customers and decide to close up the business and sell themselves. There are about 20 companies out there.''

[ianbrewster] 20/7/2007 11:44

'As long as Chesnara can find closed life funds, its shares are the ultimate income stock'

'Overall, though, it's the tempting yield that really makes Chesnara's shares worth buying'

[tole] 20/7/2007 11:11

Anything interesting in the IC BUY commentary today?

Last update I had from them was in April after Chesnara's FY results.

Commenting "new opportunities to buy closed-life books within its £50m-£200m target range reduced considerably during the year due to increased buying interest and an easing of pressure on sellers as equity values improved. If no suitable buying opportunities now arise, Chesnara may return excess capital to shareholders."

"Chesnara is cash-rich, with a group solvency ratio up from 158 per cent to 225 per cent. It also boasts a mouth-watering yield so, trading in line with embedded value, the shares are good value"

[tole] 20/7/2007 08:24

Friday Papers: tips and comment Printable Version
Published: 06:51 Friday 20 July 2007

INVESTORS CHRONICLE
Tips: Buy Chesnara at 169p

[iwillbe] 16/7/2007 13:26

i did the same thinking it was a stable share price. it hasn't really moved much since i bought them. albeit slightly down.

[2tomtom] 16/7/2007 12:48

I bought csn for my wife's pension fund as the long term yield looks good, certainly better than tthe yield on the cash deposit. Any comments whether this was a wise move?

[chairman2] 09/7/2007 10:30

Surprised the sharp upturn in the long bond yield
hasn't worked through to the share price

[iwillbe] 20/6/2007 21:26

Couldn't understand the fall in share price I presume loss of voting rights means it's a sell.

[luderitz] 20/6/2007 17:28

Trying to gage if today's RNS is a Buy or sell (and not for the first time with these releases), share price down so assume an AXA sell.

Whats the feeling here please?

[chairman2] 14/6/2007 17:31

who was it said recently there are no more deals being done?

The long bond rate drop will affect the valuations quite dramatically

[bonzophil] 14/6/2007 15:15

I would expect the long term trend to continue unless the company did something different, like buy another chunk of policies from somewhere, or interest rates rose more than expected as it is basically an income generator.

[chairman2] 12/6/2007 10:31

looking to bounce??

[markie7] 30/5/2007 10:40

agreed, got it written all over it - just need to wait.

[mctmct] 30/5/2007 10:40

CSN has more cash than it's market capitalisation - so private equity could buy the company and repay itself out of the cash pile. That seems anomalous to me.

[chairman2] 21/5/2007 16:13

Did anyone go to the agm???

[bonzophil] 16/4/2007 13:38

Thankyou Tole

[meadow50] 13/4/2007 16:36

topped up today in my PEP.Helluva yield ,over 7% ,and maybe cash back to shareholders as well.I wonder who is selling?DYOR

[tole] 13/4/2007 15:11

A final dividend of 8.05p per share in respect of the year ended 31 December
2006 payable on 14 May 2007 to equity shareholders of the parent company
registered at the date of business 10 April 2007, the dividend record date, was
approved by the Directors after the balance sheet date. The resulting total
dividend of £8.4m has not been provided for in these financial statements and
there are no income tax consequences.