Imprint Share Discussion Threads

[jeffian] 14/4/2008 18:47

Understood, Des. Someone is going to have to get off the fence!

Regards, Ian

[deswalker] 14/4/2008 18:46

There's the RNS to confirm the auction has ended.

Ian, I meant it looked like the possibility of revised bids in the auction was all over. Obviously the rest isn't decided yet.

[jeffian] 14/4/2008 18:41

In what way is it "all over", Des? If no revised bids are forthcoming, then we're still no further forward are we? The 'front runner', Premier, still appears to be committed to a Scheme of Arrangement which it almost certainly can't carry through unless their competitors drop out so we still have stalemate. Not "all over" yet as far as I can see.

Regards, Ian

[apatel21] 14/4/2008 18:31

Ding! Ding! Looks like its all over with regards to any higher offers from HYDG, OPD or Premier ; (

[apatel21] 14/4/2008 17:58

Hydrogen have just issued this rns. Strange timing given we were expecting something a bit more important from them ?



Correction to Voting Rights and Capital

[deswalker] 14/4/2008 17:41

Looks like it's all over to me.

[apatel21] 14/4/2008 16:31

Can we expect an rns @ about 5.oo like last time or will it go to the final bell with 3 parties this time? edit - looks like there going to leave it late if they bid at all.

[jeffian] 14/4/2008 12:49

Doesn't the point I made in post #2912 still apply? Unless one of the 3 contestants gets off the fence and eases the conditions of their bids, stalemate could continue indefinitely. OPD and HYDG may not speak for enough shares to achieve a 'win' but they speak for enough to stymie Premier. It seems unlikely that any of them can come up with the %age vote required to achieve a deal via Scheme of Arrangement (is that still proposed? I've been away and haven't checked the latest situation) so unless one of them goes for an outright bid via a bare majority (50%) the underdogs can continue to frustrate the front runner. In fact, it is possible that one of the underdogs could win if they put up an unconditional offer on the basis that many IMP shareholders may grasp the opportunity of something now rather than the prospect of something theoretically better which may, or may not, be achieved in the future.

Regards, Ian

[jockblue] 14/4/2008 11:03

Thanks Gengulphus #2976.

I was, of course, being slightly sarcastic about it all being sorted today:-)

To be honest, my holiding in IMP is not worth the hassle of complaining formally, but obviously if this saga drags out for months more, their behaviour in keeping the shares in escrow becomes less and less tenable. However, it does interest me that some of the current inertia could be as a result of the brokers' unwillingness to offer their clients the right to revisit their choices if events change. It would be interesting to see how many IMP shares are held in escrow due to decisions taken many weeks and months ago....

Should also add that HSBC brokerage have also upset me in other ways and I'm going to desert them soon.....for example refusing to issue letter of representation to allow me to attend the WNG AGM this morning.

jb

[nigelpm] 14/4/2008 10:10

well there's 70k now on the bid side with little on the offer.

Looks odd from recent days so it's either sawbuck looking to buy or RAB or AN other. Most likely sawbuck I'd think to guarantee the £1.15 for them.

[nickcduk] 14/4/2008 10:07

Not sure we will get any interest in todays auction. Although considering how it has dragged on for another couple of months we could argue that another couple of pence in earnings that IMP have generated should wing its back to us.

[nigelpm] 14/4/2008 09:20

Bit of interest here this morning.

I'm guessing there'll be some more excitement to come.

Sit back, relax and enjoy ;-)

[gengulphus] 12/4/2008 21:53

Anyway, it'll all be sorted on Monday.....won't it?

No!

Premier's stake is a very important factor. Unless either of OPD and Hydrogen bids enough to induce them to sell it, it is a clear blocker to:

* Any scheme of arrangement by either OPD or Hydrogen succeeding at all.

* Any normal offer by either OPD or Hydrogen succeeding beyond the "operational control" level.

That could be enough to stop OPD and Hydrogen coming back at all, though my guess is not: the fact that they haven't given up so far suggests that they're not going to go without making at least one attempt in the auction. (On the other hand, OPD's behaviour in the last auction does suggest that it might be a very feeble attempt...)

It also means that if they do come back, it will almost certainly be with normal offers with a fairly low acceptance condition - quite possibly just wanting a bare majority of the shares. The fact that they can probably only get operational control of the company must make it less attractive to them - though of course they might hope that if they can get operational control and so make it clear to Premier that they're not going to take over the company at all, Premier might decide they prefer to accept the offer and get back into cash with a profit rather than hanging on to a minority stake that is never going to give them control.

Even if no increased offers emerge on Monday and the auction procedure closes at that point, there will then be a significant delay before the EGM for the Premier offer - it's still nearly 3 weeks away. That's probably the earliest it could all end up finally being settled...

As regards what brokers do, I've checked the FSA Handbook to find out what regulations required, and what it says is basically that the broker's terms and conditions must tell you how they deal with takeovers and similar situations. ( Specifically, see point (5) of CASS 2.3.2 in .) The ones I've looked at aren't specific about putting shares into escrow, and I suspect rely to some extent on common sense being applied. But I would have thought that keeping shares in escrow for long periods when there is no actual need to do so doesn't count as common sense, and would be a valid cause for a complaint.

Withdrawals of elections for the cash alternative are being accepted by the company, and as a general rule, voting instructions for company meetings can be changed up to 48 hours before the meeting, with nominee brokers wanting instructions in from customers a week before the meeting.

As a result, I suspect that you can instruct your broker to withdraw your votes and/or cash alternative elections, and make a formal complaint against them if they don't act on your instructions (*), and take that complaint to the Ombudsman if they don't act on it. But check exactly what their terms & conditions say first about takeovers and escrow first. And of course, such a course of action does involve some work - possibly more than is really justified...

(*) Such a complaint should be addressed to their compliance department, and would incidentally at least make certain that your case was seen by a different pair of eyes!

Gengulphus

[jockblue] 11/4/2008 21:09

Thanks Gengulphus.

I can see why they've done it, it's just there seems no flexibility in the system to allow for unusual corporate actions such as this one. Effectively, I've voted on a scheme that was originally due to be heard months ago and the liklihood is that it will never be heard, as they know that under current holdings they'll never get it through. As a result, my shares are in escrow and should I wish to sell on the open market, I can't do so. What's slightly galling is the fact that you and some others have clearly been able to use such an argument to reverse the brokers' handling of this, but mine refuse to listen and accuse me of not understanding! (although they could be right!)

Anyway, it'll all be sorted on Monday.....won't it?

[arthur_lame_stocks] 11/4/2008 18:29

Surely if Premier already own 25% of IMP the other pair are p*ssing up a rope unless they come up with a knockout deal that tempts Premier to pocket a quick profit?

I can't see it myself.

[apatel21] 11/4/2008 14:47

Based on past form I'm guessing OPD will up their offer to 95p even though there is 115p on the table ; )

[deswalker] 11/4/2008 14:21

Gengulphus

Many thanks for your reply. I shall wait for the outcome of the auction and then make my decision. The most recent HYDG RNS makes it absolutely clear that the PCA elections only count if the Scheme becomes effective. Since this is no longer possible it means that my election is worthless. However I shall wait until after the auction when I know exactly what I want to do before asking my broker to effect this instead of making two calls, one asking them to undo something and then another asking them to do something else, thus risking p*ssing them off.

Thks again,

Des

[gengulphus] 11/4/2008 14:07

DesWalker,

Must admit I don't fully understand when brokers put shares into escrow. I do understand when they need to do so, which is:

* For an offer, from the time the shareholder accepts the offer until the offer goes unconditional (when the shares are transferred to the offeror), or the offer lapses or the acceptance is validly withdrawn (when the shares are released back to their owner).

* If the broker holds the shares in a "pooled" nominee account (i.e. one that holds many clients' shares), from the time shareholder elections (e.g. for cash alternatives) are communicated to the company's registrars to the time that they are validly withdrawn or become irrelevant. That's to prevent sales causing mismatches between the number of shares the election should apply to and the number the company's registrars have been told about. I don't see any reason for it to be necessary when the shares in the account belong to one investor only (i.e. CREST account or individually-designated nominee account) - the shareholder will simply get the election applied to the number of shares they made the election for or the number they own when the election takes effect, whichever is less, just as they would for a certificated holding.

* Again if the broker hholds the shares in a "pooled" nominee account, from the time proxy votes by shareholders are communicated to the company's registrars to the time the proxy votes are validly cancelled. For the same reason basically: to prevent sales causing mismatches between the number of votes the shareholder gets to cast and the number they're entitled to.

* Somewhat longer periods than the above to allow for administration.

However, it does appear that brokers are tending to do more than that - for instance, I discovered that my shares in my CREST account had been put into escrow for electing for the Hydrogen cash alternative. I got them out within a day or so just by asking to withdraw the election - but as stated above, I don't see any reason why they should have been placed in escrow in the first place.

I suspect that the staff in many brokers' corporate actions departments are not especially knowledgable about the different types of corporate action and simply follow a standard "shareholder has done something about this corporate action, so put the shares into escrow" procedure. Likewise for computer systems designed to take customer's responses to corporate actions online...

If your broker's corporate actions department is refusing to try to withdraw elections for partial cash alternatives and won't budge, it may be necessary to lodge a formal complaint with the broker's compliance department. It's IMHO not reasonable for them to "freeze" your shares over an election that the company's registrars will allow to be withdrawn for longer than it takes to withdraw the election, or to refuse to withdraw the election if you instruct them to.

I very much doubt that a broker would want to exercise shareholder rights over your shares that you haven't specifically authorised them to - things like voting when you've only elected for a cash alternative. There's nothing in it for them, and they could get into a lot of trouble, such as having to compensate customers for losses incurred as a result. If you're worried though that they've made a mistake, such as misinterpreting instructions to elect for the cash alternative as instructions to vote for the scheme, the simplest thing to do is just to ask them to confirm whether they've cast proxy votes about the scheme for your shares, and if so, which way they've voted.

Gengulphus

[deswalker] 11/4/2008 13:32

Hi jockblue,

Yes a quandry indeed. My plan is to wait for the outcome of the auction and if Premier is still the best deal then I'll kick up a fuss with my broker to get my shares back to vote for the Premier Scheme/Offer as HYDG cannot then come back with an improvement. I'll also make it quite clear that they have no authority to sell my shares to HYDG without the full terms of the Scheme doc coming into effect and that they have no right to vote my shares in favour of any modified HYDG Offer (a HYDG Scheme is obviously busted now) because I elected to receive the PCA on that particular Scheme. My wishes do not transfer to HYDG moving over to an Offer for instance, trying to buy as many shares as possible.

I haven't tried to get my shares back yet as I can't be sure I want to rescind my PCA election whilst HYDG might come back with a better deal. The broker could then be really bolshy (particularly as I was a few days late in meeting their self-imposed deadline for the PCA anyway and they finally agreed to fit me in) and say that I'm messing them around too much should I then wish to re-accept another HYDG PCA.

A bloody nightmare.

Des

[jockblue] 11/4/2008 12:23

Des, that's right, I am in exactly the same situation as you. HSBC swear that I have accepted an offer, and as such have moved my shares into limbo. My protestations that I was merely casting my vote at an EGM that has been twice-postponed and that, should the deal be agreed, accepted one of the two proposals going forward was not accepted by the broker.

From their pov, its the same as accepting an offer to buy my shares. As such, I've not been offered a say on Premier's offer because in their opinion, my shares have been sold to Hydrogen.

I am sure some of the impasse is down to brokers - they've filled in their form saying what they want to do with the nominees' holdings and that's that.
Even if Premier come back and offer £10, I can't say yes or no in HSBC's eyes. Clearly, I'd get the £10 as only one scheme of arrangement can work, but I worry that if HYDG change from a Scheme of arrangement to a normal bid, whether HSBC will sell my shares regardless.....

I can see it from their pov with regards to admin - the whole point of nominee accounts being that you lose the rights to anything but a basic buy/sell role - something like corporate actions should be handled better with regard to the nominees wishes.

As I said on TMF, unless someone really throws in a much-improved offer, I cant see this new auction solving the issues any more than the last one did.

[deswalker] 11/4/2008 11:53

It looks like JockBlue on TMF has the same quandry. I'm now wondering whether the impasse is being created by all these online brokers actually voting in favour of the HYDG Scheme when they were only asked to register for the PCA. Does registering for the PCA amount to voting for HYDG's Scheme ?? (the documents are so confusing that I'm now totally lost).

If so then any refusal by brokers to rescind the HYDG PCA request should not be allowed as it is likely creating the impasse.

If it does not, then if brokers have incorrectly understood clients' requests and have voted for the Scheme when they were only asked to register for the PCA then they have also incorrectly created this impasse.

Can anyone clarify the situation please.

Des

[deswalker] 11/4/2008 11:40

Gengulphus,

My shares remain tied up with Selftrade after accepting HYDG's PCA. I'm in two minds as to whether to push to rescind my decision and thus get my shares back or to keep them there for the time being to avoid any admin issues should HYDG end up moving over to an Offer and upping their offer over that of Premier in next week's auction. Do you see any risk in the latter strategy ?

Sorry for the daft question but my brain aches so much with all this stuff that I just want someone to hold my hand whilst I get my money out :-)

Many TIA,

Des

[williebiz] 11/4/2008 11:32

Thanks Gengulphus.

[gengulphus] 11/4/2008 11:25

williebiz,

Now don't call me Mr Thicko too loudly but what are the basic differences between these different takeover routes if you had to express it fairly succinctly? TIA.

Scheme of arrangement:

* Involves the company re-arranging its share capital - basically, a combination of issuing new shares to the acquirer in exchange for cash and/or shares in the acquirer and redeeming its existing shares for that cash / shares. ("Scheme of arrangement" is in fact a general term for companies re-arranging their share capital in the more complex ways that require court approval - there are schemes of arrangement that aren't takeovers.)

* Settled by a shareholder vote on a special resolution, requires a 75% vote in favour, that percentage cannot be changed by the offeror.

* An "all or nothing" deal: if the vote passes, the changes to the share capital automatically affect every shareholder; if it doesn't, nothing happens.

Offer:

* Involves the offeror buying the existing shares off their owners - the offer is a general offer made to all existing shareholders (apart from the offeror themselves if they own shares already) to buy their shares off them. A shareholder accepting the offer creates a contract to sell the shares to the offeror - that contract is a conditional contract up to the time that the offer goes unconditional. (And if it never goes unconditional, the contracts don't come into effect.)

* Settled by individual shareholders accepting the offer or not. The offeror chooses the "acceptance condition" to use - i.e. what level of acceptances is required before the offer can go unconditional - subject only to the requirement that it must be enough to give the offeror more than 50% of the shares (i.e. it cannot go ahead unless the offeror is going to get at least operational control of the company). And they usually reserve the right to reduce the acceptance condition if they feel like it, subject to that same requirement.

* Not necessarily an "all or nothing" deal: it can only affect all shareholders if the company law procedure for compulsory purchase of the remaining shares becomes available, which is if they get 90% of the shareholders to whom the offer was made (i.e. excluding themselves) to accept.

There are broadly speaking four categories of outcome from an offer:

"All" - the offeror gets enough acceptances to compulsorily acquire the remaining shares, and so ends up with 100% of the shares.

"Full control" - the offeror gets enough acceptances to give them ownership of more than 75% of the shares, but not enough to compulsorily acquire the remaining shares. The offeror can then vote any resolution they like through at company meetings. Usually results in them delisting the company and the remaining shareholders becoming minority shareholders in an unlisted company. (Which is not very desirable, so this is a rare outcome - usually the offeror going over 75% induces enough extra acceptances to move to the "all" outcome.)

"Operational control" - the offeror gets enough acceptances to give them ownership of between 50% and 75% of the shares. The offeror can then vote ordinary resolutions through at company meetings, but not special resolutions (and in particular cannot delist the company, as that requires a special resolution).

"Nothing" - the offeror's acceptance condition isn't met, so the offer never goes unconditional and eventually lapses. (Note that the offeror can exclude the "full control" and "operational control" outcomes in favour of this one by setting their acceptance condition high enough.)

Gengulphus

[apatel21] 11/4/2008 10:58

What chances of another bidder appearing after the auction process finishes ; )