Diversified Energy Share Discussion Threads

[redsonning] 15/2/2024 14:51

Shareholders are deciding for themselves all the time whether or not to buy or sell at the existing share price. The company is using the opportunity of a very low price to suddenly achieve a much larger share repurchase at no additional cash cost to itself. From the company's point of view this is logical and is brought about by the unusual mix of parameters which combine at this particular time. Ongoing shareholders will hopefully see the benefits of the arrangement in due course.

[fordtin] 15/2/2024 14:41

scrwal- I've just checked the rules for ftse250 index review's and it depends on their position in the ftse all-share on 27th Feb. If they remain in today's position, they will remain in the ftse250.

[blue square] 15/2/2024 14:39

Freeport has been partially
down, that was due to come
full stream end of Feb

[justiceforthemany] 15/2/2024 14:27

Nat gas has bottomed.
+3%
Upside ahead.

[scrwal] 15/2/2024 14:06

Buy backs can be good but if the share price goes sideways then it's a problem for DEC. The market value has dropped significantly and a further drop of 10-15% is very likely putting it below the automatic exit point for the FTSE 250 - doesn't matter what nav etc people come up with, the poor price performance coupled with buybacks could relegate the company next quarter. It may be saved in the current quarter by the performance of PZC ORIT and EBOX but a concerted short attack could change all that.

[sbb1x] 15/2/2024 14:02

Still see this having a run up to 10 pound before exdividend date

[stevensupertrader] 15/2/2024 14:00

However Rusty never thinks after this scheme . Just look forward after this , share price will start to fall again as there is no more support , this is just a temporarily measure imo .

[bluemango] 15/2/2024 13:52

"Rusty says that the current share price doesn't reflect the quality of the company etc and it's in shareholders interests. So why do they think a holder wants to make a part disposal of a holding at a deeply undervalued price - "

Because it allows certain forced institutional investor sellers (eg M&G?) to dispose of shares in a more orderly fashion rather than dumping in the market as they've been doing until now.

I personally think it's a clever move by the company, but acknowledge there will be different opinions on this. FWIW I won't be accepting any offer on mine, instead I'll be taking the dividend in full.

[scrwal] 15/2/2024 13:47

Seems like desperation really. Rusty says that the current share price doesn't reflect the quality of the company etc and it's in shareholders interests. So why do they think a holder wants to make a part disposal of a holding at a deeply undervalued price - wouldn't the holder either sell out because of the underperformance or keep the holding, collect the dividends and wait for the price to rise to a point where it does reflect the quality.

Also any shares purchased by DEC form part of the total allocated for the buybacks so they are trying to use part of the dividend to offset against the buyback allocation.

It will be interesting to see how close the election date is to the 5 business days used to calculate the offer price - a nice window for shorts to attack possibly.

[marksp2011] 15/2/2024 13:15

This is really clever move. Very American - they like sneaky tender offers

Buy the shares, sell them back at a minor premium and get a 30% uplift in the return as you dont pay witholding tax.

Not a great issue for UK retail in a wrapper but a great deal for hedgies, pension funds etc.

[bountyhunter] 15/2/2024 13:13

Yes buybacks at this level make a lot of sense to me given that DEC are saving paying out ~30% p.a. dividend on the bought back shares (which are cancelled). Even if DEC borrowed some cash at say 5-10% specifically to buy back shares while the price is around this level they would be saving 20%+ p.a. after financing charges.

[redsonning] 15/2/2024 12:29

By my reckoning, one would have to be giving up (i.e. selling in the tender) approx 7.3% of one's holding in order to receive the cash equivalent of the dividend due (if one were instead to do nothing). Have ignored any tax implications in coming to this figure, as the tax depends on the individual circumstances. Would be interested to know if anyone calculates differently. No advice given or intended.

[zhenya21] 15/2/2024 12:22

Like the fact they have bought 120,000 shares over last few sessions. Hopefully a big seller takes up the tender offer.

[bountyhunter] 15/2/2024 11:40

No SS it has been mainly iis especially M&G selling off (probably a forced seller). The tender offer will help stop that especially as it's in the interests of the iis tendering shares to see the price rise, a masterstroke!

[blue square] 15/2/2024 11:35

Steven your entitlement is
around £483 so around
54 shares, it may be worth
doing, thats your decision

[stevensupertrader] 15/2/2024 11:32

👍🏻 thanks so if I got 700 shares - really no point at all sad

[blue square] 15/2/2024 11:28

Your Entitlement is what
you would receive in
dividends you can only
use the tender scheme up
to your entitlement

[blue square] 15/2/2024 11:26

My entitlement is £3372
So could use the tender
Scheme for 375 shares
From my total of 4887
But why would I?

[stevensupertrader] 15/2/2024 11:23

Do you meant , 7% of the entitlement ?
Take your example - your total dividend entitles you to get 375 shares if you took option 2 , so you be allowed 25 shares to sell out of your entitlement of 375 shares ! If this was the case - definitely many private shareholders are excluded 😞

[blue square] 15/2/2024 11:16

As the most shares you can
tender is about 7% of your holding
unless you have a massive
holding its pretty irrelevant

[plutonian] 15/2/2024 11:09

Sounds like a win-win-win then.

* Cash returned with valuable CGT loss.

* Not classed as income, so no income tax.

* No withholding tax (I am yet to be convinced how the IRS will deal with this as I do not understand US tax law).

[stevensupertrader] 15/2/2024 11:03

If blue square is right about tendering for large shareholders and institutions , in fact for the past few months , it was the small shoulder holders that were selling off . IMO , if this scheme exclude small shareholders, you can see them existing very soon and pushing down the share price .

[meanreverter] 15/2/2024 10:59

Plutonian:
(1) No. The US does not levy capital-gains (or income) tax on foreigners living outside the US. Dividend withholding tax is a tax on company payouts rather than on individuals, with some provisions for relief through double-taxation treaties.
(2) Yes. Selling your shares, outside a tax-sheltered account, would likely crystallize a UK CGT loss (because of the general downward trajectory of DEC shares).