Diversified Energy Share Discussion Threads

[bluemango] 15/2/2024 09:04

#1085 Whichever option shareholders take, receiving the dividend or accepting cash for their shares, the payment by the company for that shareholder remains the same.

From the RNS:

"This Return of Capital allows shareholders to be paid the same total amount of the previously declared Third Quarter Dividend while providing optionality for shareholders ..."

[imnotspartacus] 15/2/2024 09:01

Probably overlooked because of the tender offer but the 60,000 buyback is pretty significant; that’s 1.2 million shares pre consolidation.

[louis brandeis] 15/2/2024 09:01

Obviously the company no longer has the capital to pay the dividend AND partake in share buybacks AND purchase more assets to keep the whole business model working.

Now crazy schemes are being invented in order to hide the issue.

My advice is to sell on the market now.

[croasdalelfc] 15/2/2024 09:01

I fundamentally disagree if 50% take it up then the company will need ~£200m to buy them back having saving £20m on dividends . Where do they get the extra £180m from! Impossible - so they will pare back the waiver The £20m above would buy back around 2m shares - or 4% - instead buying back say 50% of your 10000 shares they would buyback 4% but you just lost half your dividend.

[bluemango] 15/2/2024 08:53

#1082 I fundamentally disagree.

It works, because if enough shareholders take up the buyback option (particularly some of the larger institutional investors) the savings on future outgoings by the company will be significant. The future ongoing dividend pot will be concentrated on a smaller number of shares, far smaller than via the traditional buybacks in the market, and will therefore greatly help preserve the level of that dividend, which in turn makes this far more attractive as a long term investment.

[croasdalelfc] 15/2/2024 08:46

The aggregate amount of funds the Company will utilise in relation to the Return of Capital will be approximately US$42 million, which is the approximate amount of the Third Quarter Dividend announced on 15 November 2023.....No extra funds .This doesn't work unless extra funds above dividend are allocated ~$50m imo

[croasdalelfc] 15/2/2024 08:41

Not really -. In everyone elects to keep 90% of shares for a divi payout but give up 10% of divi then it only frees up $4.2m for use in buybacks . 10% of $42m10% of 47.7m shares is 4.77m worth around $60m . So in my scenario they would only be able to buyback ~1/15th of the shares The whole thing is a waste of time and involves fees and costs .

[bluemango] 15/2/2024 08:39

#1074/#1075 Don't judge merits of this on a short term market reaction which could be unrelated anyway.

Imo market will see this as a potential significant saving on future outgoings (if enough shareholders take up the option; particularly institutional investors) and will see this as positive.

[nigelpm] 15/2/2024 08:38

I think that's right bounty - probably meant for institutions or those that want a quick exit without fiddling in market.

[sbb1x] 15/2/2024 08:38

Tender offer price should be at a nice premium:)

[sbb1x] 15/2/2024 08:37

Time to buy more

[bountyhunter] 15/2/2024 08:37

For the sake of argument if the share price is the same as now when tendered a UK ISA investment is due to receive ~7.5% dividend minus 15% withholding tax = 6.375% vs a 5% premium on the tender offer.

If liable to the full 30% witholding tax on the dividend then the shares would only have to be ~0.25% higher for the tender offer to be worth it as the yield as now would be 5.25% Could be attractive to M&G or other large institutional holders?

If the share price rises the extra 5% could beat the current 6.375%(ISA holders) or 5.25%(non ISA/sip holders) yield due to be received?

At least that is my understanding. Nai and dyor.

[blue square] 15/2/2024 08:33

What a Mess, if we had just
the RNS with 60 000 buyback
the share would of gone up.
All they have done is sown
confusion.

[tag57] 15/2/2024 08:32

Meanreverter - adding to your point, this could also be of interest to anyone holding shares in a non pension/Isa if paying tax.
Gets 5% share premium
Saves 15/30% withholding tax
Tax in divi income at potentially 20/40% tax.
On second thoughts I will be taking a look at this for my holding on my S&S accounts with HL. As could be quite attractive to sell and repurchase.

[blue square] 15/2/2024 08:30

They should of stuck to
buy backs, shares bought
back saved the dividend payout,
or have they run out of money
for buy backs?

[bountyhunter] 15/2/2024 08:22

I'm still trying to get my head around this.

1) Obviously if you do nothing you get the divi minus applicable withholding tax so 85% of the divi for most non sipp UK investors.

2) If you go for the tender offer you get a 5% premium on your sale so receive 105% for the shares tendered? How does that work as you would have the 5% bonus on your sale but have lost the dividend and the shares tendered? Surely I must be missing something! It may depend on the prevailing share price at the time of the tender offer.

[blue square] 15/2/2024 08:22

No one can understand the RNS
which does not help

[blue square] 15/2/2024 08:20

For something meant to boost
the share price, its had the
opposite effect,
I will hit my stop loss at
this rate.

[croasdalelfc] 15/2/2024 08:17

The total amount of the tender offer and divi is $42m ie the same as the full dividend.So no extra funds allocated for the tender offer. If you elect to waiver say 50% of your divi then you probably won't get full allocation in tender offer - that's how I see it

[bountyhunter] 15/2/2024 08:15

Hi Leon, re #1052 inclusion of notional "hedging losses" is normal practice (e.g. Serica as well) so not bizarre just misleading at first sight. You are right that when the hedged price is greater than spot as now the difference will look a lot more favourable in the results.

[kaos3] 15/2/2024 08:12

Market does not own shares to sell. Only willing shareholders do.

[laurence llewelyn binliner] 15/2/2024 08:10

#Lab305, so in effect this is a USD42M addition option to the buyback but direct from shareholders at a premium and not from the main market, you have been vocal on many times, ref more buybacks so why would this not appease..? :o)

[stevensupertrader] 15/2/2024 08:08

If opted for option 2 - os it all your DEC shareholdings or just shareholders can decide ? - so many questions still not mention . Option 1 is cleared but not Option 2 - vague

[tag57] 15/2/2024 08:08

Hopefully the tender will be fully taken up and take out ~10% of market cap.
I will be keeping mine