|mf - Price action is saying no deal IMO, but I still don't understand the logic of selling the shares as still a long way below NAV, and likely more so come the next update. As I've said, I'll live with the discount.|
|I'm not seeing much logic in the share price here. I thought I'd seems most things but am a bit stumped for an explanation.|
|Kennedy Wilson in USA due an update on May 4th. Probably a meeting with annalists will then get there shareprice back on track.|
|Drop Mary Ricks an email. I think a lot of holders don't want to end up with US shares and I imagine the US shareholders are not that happy with the effect of the announcement on the US share price.|
|Strong t/s, not sure if they're just rubbing our noses in it? Eg:
"KWE DELIVERS 270,000 SQ FT OF LEASE TRANSACTIONS AT RENTS
17% AHEAD OF PREVIOUS PASSING
Kennedy Wilson Europe Real Estate Plc (LSE: KWE) an LSE listed property company that invests in real estate across the UK, Ireland, Spain and Italy, announces strong leasing momentum across key investments, completing significant rent reviews at 111 Buckingham Palace Road, London, SW1 and new leases across Leavesden Park, Watford and Stillorgan Shopping Centre, Dublin 18 in Ireland, covering c. 270,000 sq ft and delivering an uplift of 17% ahead of previous passing rents and 3% ahead of valuers' ERVs."|
|I only just realised the AGM was today, might have been worth turning up. I'm not sure it is a fait accompli. I know a few of the board personally and may try to bump into them to discuss. The discount to NAV is intolerable but ultimately the solution is to sell properties and return the proceeds to investors. As it is, the 1170 that was the strike price on Monday has already dropped by £1. The trading update next week may be interesting, but I am not sure KW are committed to the scheme of arrangement, I suspect they just want to see the market recognise the value in the company.|
|Be interesting to see what the major shareholders make of it, but considering THE major shareholder, suspect it's a fait accompli.|
|I'll be honest, I'm voting against if the nominal exchange is too large a discount to the GBP NAV. I can quite happily live with the discount on the market as I am being paid whilst I wait.|
|Back to 1065, still a good result for you being on the receiving end of a bid - long time since I've had that.
Also a very good result for us both at UAI; and LSR too doing well YTD.
Now just need PCA to pick up on the May Update and June finals. The 5% Yield and 16.3% discount provides obvious value, especially as the stats may be better than that on both counts...|
|Also, the US share price has dropped a bit the last couple of days and the strike price is now closer to 1100p. I am not sure why we would want to agree a deal at a discount to NAV: surely realising the property is a better bet?|
|Thanks hpcg ........ The other consideration is that REITS in the USA tend to trade close to NAV , so by accepting the KW paper we lose a pre bid 5% UK div yield @960p , or 4.3% at todays price of 1110p in exchange for a pre witholding tax yield of 3.5% on KW Holdgs . I prefer holding UK / European Propcos , as the discount to NAV provides a margin of safety . Reading the offer document we have a long wait as the deal will not close until Q3 2017|
|bench2 - an ISA can hold any stock from any recognised exchange anywhere in the world. To all intents and purposes this is just about all exchanges as even TSX-V is allowed, and that has the shonkiest corporate governance going. The downside of an ISA is that for the US dividends get stung by 15% withholding tax (lots of countries have a withholding tax on divis, Norway, Spain, France, Germany). On the other hand because a SIPP is a retirement account no withholding tax is charged. So you have no need to sell, but it may change your calculus.
As you say currency becomes a consideration, and stronger Sterling is a possibility IMO, but by no means a certainty.|
|Also see hpcg (220) US withholding tax of 15% will apply to divs.|
|If like me your KWE is held in a self select ISA and we stay with KWE , collect the div and accept the all share offer then I think we have about 3 months to sell out of KW Holdings ... as I do not think we will be allowed to keep a US listed stock in an ISA .... Any views ? ... We also move to a dollar based holding and so have an FX risk if sterling goes up|
|Was feeling really smug this morning as this shot up, as I had only topped-up into my isa on Thursday. But after the dust has settled I am now not so sure about how I feel about having the dividend drop by 2%.
I think we are being sold a bit cheap with estimated NAV currently at 1,233p.
Need to get my head around this, KT.|
|KW Holdings have opened down about 3.5%. So somewhere in the middle effectively.|
|I understand that KWe was more or less an outreach of Kw,I already own shares in KW.I think they (kW) are getting KWe on the cheap.I want more!|
|So the speculation came to fruition:-
Jeff H4 Mar '17 - 15:22 - 200 of 222
|Not long before we find out anyway. ;-)
Certainly KWH are getting KWE for less than the NAV but for more than "the market" thought it was worth.
If the market prices/caps before the deal were meaningful then KWE shareholders are getting a bigger slice of the pie than they "deserved" on the other hand KWH shareholders are getting less.
1110 could well be a good buy price (I honestly don't know) but I think that would be because either one or both companies were undervalued in the first place or because there are actually good synergies/efficiencies to be had. I honestly don't think it's because there is an arb between the market price and offer price, but as I say we'll find out soon!|
|@kazoom - doesn't it come down to the NAVs, and the relative discounts they trade at? KW Holdings are getting KWE at less than NAV, at a deemed offer price of 1174p.|
|kazoom - like mf I have added some at 1111. I actually think KW can move higher on the open. Don't forget that the deal is at a discount to NAV, and for KW unit holders there is a chunky increase in the dividend, even if it drops for KWE holders. The discount allows for a 5% currency swing, to 1.344. I think a purchase at around the 1110 mark has a small potential upside and a remote chance of downside. Currency risk is if anything a positive for dollar holders, especially as for the time being the EUR looks like it can strengthen.
I happen to have quite a lot of cash at the moment so that is part of my motivation, I wouldn't be trading out to move in, but I think it is a good short term home. I will ponder long term once I've looked through the KW portfolio. Looking forward, for those who don't know, there is no US withholding tax on dividends paid into a SIPP, 15% other accounts.|
|I'm pretty sure that there is NOT actually an arbitrage opportunity between the current price (c.1110) and the apparent merger price (1174).
Until and unless any synergies etc. kick in then the merger is a zero sum game.
So if the KWE shares have risen (effectively because they are getting the "better" end of the deal) then the KW Holdings shares will fall to balance - and if you do the sums it comes out to around 6%.
So expect the KW Holdings shares to open later in the states at around 6% down. and the revise KWE value in the merger will be c. 1110.
Maybe a little higher if the market has some faith in the value add of the merger, but I doubt it will be 6% at this early stage.|
|Specto,In a previous life I did corporate law in Jersey and it is nailed on, especially as KW own so many of the shares in KWE. The only risk would be if the shareholders didn't want it, which isn't likely|
|@mf - surprised it's not trading nearer the terms too. OK, no counter-bid, some currency risk, and vagaries of US quote. But agreed merger so looks fairly nailed on.|
|I've actually topped up at 1110. Still a 6% discount on the final takeover price and a dividend to come in a couple of weeks. When the market is high that is a good deal for somewhere to park money.|