Nat.west 9%pf Discussion Threads

[nisbet] 15/6/2021 11:26

Stamp duty is a half of 1%, so approximately 0.88p. Any accrued interest in a “dirty” share price is theoretical. In this instance the last half-yearly dividend was paid in the middle of April, so the implied accrued within the “dirty” price is 2 months worth, so around 1.5% (1/3rd of 4.5%).

[nicholasblake] 15/6/2021 11:14

Is there any stamp to consider?

[greyingsurfer] 15/6/2021 11:12

But they will be paying accrued on top of the price anyway to buy

[kirkie001] 15/6/2021 10:58

If you're buying at 176p, and selling into a tender at 175p plus accrued (of c 2-2.25p), then there's a 1p risk free profit there. That's what the big boys are doing just now.

[nicholasblake] 15/6/2021 10:56

Arbitrageurs buy in just above offer price when they adjudge that the price of a tender offer will need to be increased in order to succeed.

[nisbet] 15/6/2021 09:35

I can’t see where any arbitraging would add value. But what is apparent is the considerable buying at prices above 175p, and you can be pretty certain that the purchasers will not be tendering at 175p.

[makinbuks] 15/6/2021 09:16

Very interesting situation following the Aviva debacle. We could end up all over the Sundays here

[nicholasblake] 14/6/2021 22:40

Arbitrageurs?

[nisbet] 14/6/2021 20:23

Just in case you have not seen the reported volume after the market closed. Many large 5 figure purchases at 177p, and a considerable number of trades at prices between 176p-177p. I would speculate that those just above 176p are sells and just below 177p are purchases. Obviously they can’t be all purchases.

With the parent company currently involved in a tender at 175p, I don’t believe the rules would allow market purchases by them. Furthermore, any market purchases would be subject to immediate reporting via an RNS.

[makinbuks] 14/6/2021 19:39

I apologise Nisbet, I got muddled over dates

[jaf111] 14/6/2021 19:30

It will certainly be interesting to see how much institutional support the tender gets......one would have thought some unofficial discussions would have taken place pre-tender which suggests it will get some support.

But hopefully I am wrong and the institutions will not accept such a low ball offer....

[nisbet] 14/6/2021 17:17

Institutional offer closes at 1pm tomorrow and the result will be announced on Wednesday 16th June.

I suspect that the reason for the additional time for "non institutional" is one of dissemination of information to shareholders. Clearly, getting the offer terms to shareholders who have their shares registered in a nominee name and getting replies is a more onerous task. Nat West is almost certainly hoping that there will be overwhelming acquiescence by institutions and that this will influence/provoke retail investors into accepting.

The offer terms represent no premium to fundamental worth as evidenced by prevailing yields in the preference market generally. In theory, the level of acceptances by institutions should be minimal to non-existent and we should then see a more appropriate offer being made, which, based on present yields at the longer end of the market is around 4.25%. This gives a price of 212p.

With £140m nominal outsatanding, this will cost an extra £52m.

[makinbuks] 14/6/2021 16:19

Instituational offer closed, will we be told the result? Why is there a different timescale for the retail tender? Seems to unfairly prejudice the institutions, LOL!!

[dbadvn] 14/6/2021 13:02

Just found this board.

I have held for 10nyrs +

NW chancing their arm here imo.

Offer has to start with a 2 to be able to buy the equivalent risk/reward in the market.

More if you are a retail investor with tax to pay .

Not tendering.

[davidosh] 10/6/2021 15:40

kinbasket...thanks

This show may be of interest to those looking for good yields and one of the sessions will be looking at that within funds rather than a pure one company dividend.



If any of you would like to be my guest just use this code for a complimentary ticket....MTFGuest1506

[kinbasket] 10/6/2021 15:32

Or rather it's 175 + accrued.

[kinbasket] 10/6/2021 15:31

Yes. Tender includes accrued.

[davidosh] 10/6/2021 15:11

Will those who tender receive the accrued interest on the day the payments are made?

[kirkie001] 10/6/2021 14:44

(edit - although not through the offer price plus the accrued interest - I make it that would roughly be 177.6p)

[nisbet] 09/6/2021 17:44

Can’t see why anyone would tender their shares on the implied yield basis of 5.14%. It offers virtually no premium to fundamental worth based on current interest rate structures within the yield curve. They’re trying to pull a fast one.

The current offer is saying let’s see what we can buy on these terms and then come back and make an offer that incorporates a proper premium, and that, in my opinion would be down to a yield of 4.25%

A yield of 4.25% would give a price of around 212p.

[kinbasket] 09/6/2021 16:16

Thanks. I read it twice earlier, specifically looking for that and still managed to miss it.

[nicholasblake] 09/6/2021 16:05

‘Securities repurchased by the Issuer pursuant to the Offers will be immediately cancelled.’. Every time share purchased the absolute level of pref capital which can BLOCK cancellation REDUCES. The second tender will need to be at £2+.

[kinbasket] 09/6/2021 14:05

It's 75% of prefs "then in issue". Which could be pretty flexible. Maybe they could vote them somehow. It's also worth noting the institutional offer and therefore the rump size will be known before the retail offer closes. If the institutional offer sweeps something like 60%, remaining retail may be encouraged to tender as the risk of it reaching 75% looks higher. It's unlikely they haven't spoken to bigger holders and may have pitched the price accordingly.

If for some reason it ends up in court, they'd also be in a decent position legally to argue they made a fair and reasonable offer, especially if institutional acceptance is high.

[zangdook] 09/6/2021 13:52

I no longer hold, but if I did I'd probably hold on. My thinking is, yes, it may become a small illiquid rump, but there's a certain demand for securities like these, and if they become scarcer the price should hold up?