Hansteen Share Discussion Threads

[pj fozzie] 04/10/2017 11:43

Yvonne, for Tax reasons. CGT is generally easier to manage than income, in finding tax efficient solutions. Also - as CGT - you'll be dealing with a lower figure. Suppose I bought 100 shares at a pound each, a couple of years back. With 70p dividend, I'll have £70 div income to pay tax on. With the 140 buy back, I'll have £40 to pay capital gains tax on.

Cheers,
PJ

[poacher45] 04/10/2017 11:42

If they pay a dividend there would be more tax to pay better for everybody to have a capital gain.

[yvonne] 04/10/2017 11:30

But then one questions why not just give a special dividend why do they want to buy back shares??

[rustle2] 04/10/2017 10:59

Thanks pj, always good to have someone spell it out. That's my understanding too.

[pj fozzie] 04/10/2017 10:42

And I've just checked my share holding - I have an even number of shares - that's good then, no complications there. :-)

[pj fozzie] 04/10/2017 10:40

My take on it is as follows: You will have the option to sell half your holding, at 140 per share, as a corporate action - and those shares will be cancelled.

That is, in effect, the same as paying a 70 dividend per share.

The difference being that with a buy back, you end up with 70p per share as CGT and half the number of shares you had previously vs. getting 70p per share as dividend and keeping the same number of shares, which will be worth half as much as the CGT plan. Except, the 70p per share you get back will not all be CGT - as you'll actually have paid something for them in the first place - so just your notional profit will be subject to CGT. On reflection, this seems quite a tax efficient way to handle the return of cash.

My shares are all in an ISA - so doesn't really make any difference which way they go.

This announcement does give shareholders another option of course - don't take up the offer. In which case, after the dust settles you'll be effectively doubling the percentage of Hansteen that you own (although it will be Hansteen lite at that point.)

Personally, I'll sell my 50% at £1.40 and then mull over what to do with the cash. Possibly even buy some of the new Hansteen with it. We'll see.

Cheers,
PJ

[ugandalad] 04/10/2017 09:13

If I understand this right my left hand walks away with cash at a premium 😁 Leaving my right hand with shares to the same number now worth less. Brilliant lowish cost method of acheiving the buy back.

[ridicule] 04/10/2017 09:03

I am having problems getting my head around this? Does anyone have a handle on it?

[pillion] 04/10/2017 08:57

Under the terms of the Tender Offer being announced today, Qualifying Shareholders are offered the opportunity for at least 1 in every 2 Ordinary Shares held by Qualifying Shareholders to be purchased at a price of 140p per Ordinary Share

[pillion] 30/8/2017 09:57

The price we achieved is 25% above our December 2016 valuation


Excellent news !

[pj fozzie] 24/8/2017 15:34

ugandalad,

Thanks for the comment. Mine are in an ISA too - so no diff to me either - I was just curious about the mechanism for the return as capital rather than income.

Cheers,
PJ

[pillion] 24/8/2017 09:52

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[ugandalad] 23/8/2017 16:01

Pj good question in the past B shares were issued and bought back but my understanding is that this has been disallowed by HRMC. I suppose the Board will have to obtain permission from Mr Taxman for whatever arrangements they wish to make. Hopefully as the funds clearly come from an asset sale the tax guys will play ball. As my holding is in an ISA I don't think it will make any difference to me which way it goes.

[badtime] 23/8/2017 13:26

I'll carry on holding for now...EI maybe it'll be a Autumn one?

[essentialinvestor] 23/8/2017 11:59

Always try to admit mistakes, provided I remember!,
and sold too early here.

HLCL did turn out nicely which I focussed on following HSTN,
getting some below 2.90.

Congrats to those holding.

My reading on wider market direction has been poor of late,
as remained pretty convinced of a Summer correction which never came.

[pillion] 23/8/2017 11:54

The Board's intention is to ensure that the GBP580 million is treated as a capital return and not an income return

This may be to save us some tax -- depending on our respective capital gains tax allowances

EI may still be watching this thread and could cast some light

[pj fozzie] 23/8/2017 11:44

And as a follow up question to my previous post - I've not had a share where a return of cash was done as a capital return before, rather than dividend. How does that typically work?

Cheers,
PJ

[pj fozzie] 23/8/2017 11:42

Good results IMHO, although I'm not too sure how to react to the 70p a share return to shareholders, presumably the share price will drop 70p and I'll just end up with £5120 cash and a shareholding worth £4380 rather than a shareholding of £9500. About a 54% drop in share price

If £580 million is returned to the shareholders, and the current market cap is £1040 million. Then it seems one would assume the new market cap to be about £460 million(1040 - 580). About a 56% drop in share price.

However, post return of cash, the remaining Property/Land will be worth about £805 million, debt of approx £320 million, cash on hand of about £70 million. NAV will be about £555 million. Therefore, if the share price were to drop to 60p, it would value HSTN at about £495 million - just over a 10% discount to NAV. I guess with brexit and uncertainty etc, a 10% discount might be fair value - but looking over the past five years, it seems to me that HSTN has normally traded at a premium to NAV. At £1.30 - could be a worth buying a few more.

Thoughts anyone?

Cheers,
PJ

[pillion] 23/8/2017 09:10

The Board proposes to return up to GBP580 million in aggregate to Shareholders which is the equivalent of 70p per share.

[pillion] 02/8/2017 10:06

Half-year results for the period ended 30 June 2017

Wednesday 23 August 2017

[badtime] 13/7/2017 18:39

Yes..probably right ..nice to see the share price up

[pillion] 13/7/2017 17:48

bt
Will they wait until August announcement of interims ?

HSTN a well run company imho

[badtime] 13/7/2017 15:04

Thought we might hav had announcement by now re cash distribution