National Grid Share Discussion Threads

[pierre oreilly] 26/4/2017 14:00

We know for certain the mechanical effects of the cash return. NG have told us, they wrote it down and we read it. It isn't a secret. The mechanics of the special divi and consolidation are nothing to do with the market, nothing to do with our view, nothing to do with anything except how ng have structured the capital reorganisation. And they've done that to keep the price the same over xd.

Any price changes over that period will be to do with normal market movements and nothing to do with the mechanics of the reorganisation. I'm not really sure why you seem to have trouble with this.

[velod] 26/4/2017 13:17

Pierre- Oh well in that case what the herd agrees to by consensus on a forum is obviously the way to invest as the market will snap to the herd's view. Let's just wait and see. Who knows for certain?

[arf dysg] 26/4/2017 11:45

The other possibility is that on the morning after the consolidation, the entire market chooses that as the ideal time to buy (or sell!) and the price could go absolutely anywhere.

I'm pondering buying a multiple of 12 shares before the consolidation, so I don't lose out on any rounding error when Gaxit happens, or Gasmageddon for those with a biblical cast of mind.

[pierre oreilly] 26/4/2017 10:52

vELOD, most of the last 10/15 posts have been explaining why the price won't change much due to the special divi and onsolidation.

I suggest you reread them all.

[bountyhunter] 26/4/2017 07:30

the intrinsic value barring market forces at the time should remain the same due to the 11 for 12 consolidation taking effect on the same date as the shares go ex special dividend

[velod] 25/4/2017 21:57

Okay pierre (4578). Fair enough, you disagree with my guesstimate :)

. . . Now be brave and stop beating about the bush and post the actual share price range you say investors will see after the conversion is done and dusted.

. . . Edit: Or might it turn out to be the exact opposite of 916p and instead be 1084p?

[bountyhunter] 25/4/2017 20:39

thanks jonox - that makes sense and as I suspected is the same date as the XD date for the special divi so that the share price remains comparable across that date - I just couldn't find anything written down in the RNS statements to confirm that

...added to the header

[pierre oreilly] 25/4/2017 19:48

velod, 4574, errr no. The price xd will be very close to the price cd.

[jonox] 25/4/2017 18:28

Share consolidation date is 22nd May.

See page 3 for timeline:
hxxp://investors.nationalgrid.com/~/media/Files/N/National-Grid-IR/presentations/2017/Return%20of%20Capital%20Mechanics%20-%20vFinal%20-%20Copy.pdf

[redartbmud] 25/4/2017 17:50

National Grid plc (the "Company") announces that its Board has approved a special interim dividend of 84.375 pence per existing ordinary share or US$5.4224 per American Depository Share1 (the "Special Dividend") following completion of the sale of a majority interest in National Grid Gas Distribution. The Special Dividend will be paid on 2 June 2017 to those shareholders who are on the Company's register of members at 6:00pm (BST) on 19 May 2017.

In order to maintain the comparability of the Company's share price before and after the Special Dividend, National Grid plans to undertake a share consolidation. The share consolidation will replace every 12 existing ordinary shares with 11 new ordinary shares. National Grid has published a Notice of General Meeting and explanatory circular (the "Circular") to shareholders regarding the share consolidation and related resolutions which will be put to shareholders at the General Meeting of the Company.

The General Meeting will be held at 9:00am (BST) on Friday 19 May 2017 at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ.


This is all of the information issued to date.

[bountyhunter] 25/4/2017 17:14

anyone have a link confirming the date of the 11 for 12 consolidation?

[velod] 25/4/2017 15:39

And if you're brand new to NG. and invest after the divi has gone XD and therefore excluded from receiving the divi, then it's 916p or thereabouts as an entry point (based on 11/12th's of £10 averge share price pre-conversion). . . Less than 916p-ish and I'll be topping-up myself.

[septimus quaid] 23/4/2017 13:59

At the risk of flogging this to death, is the whole point of the exercise to issue enough of a special dividend to exactly cover the purchase of any shares that went "missing" as a result of the consolidation?

So, by exercising share purchases using the special dividend monies, you end up with with the same number of shares as before.

The benefit being that, overall, there are now less shares in circulation.

What about the "innocents" in all this, i.e. shorters, they will have sold stock, with no entitlement to the special dividend, and now need to buy back same at a (hopefully) increased price?

Is an indirect benefit of this exercise one that allows a squeeze to be put on the shorters?

[daveofdevon] 23/4/2017 12:02

Many thanks Pierre, that confirms what I had suspected but I got so bogged down in the detail and timing I failed to see the overview.

[pierre oreilly] 23/4/2017 10:43

Ignoring all costs and any price movements not associated with the consolidation, you'll be able to buy back 1 share for each sold. The price won't change (much) due to the consolidation. In practical terms, selling 1000 will give you cash to buy back 960/970/980 depending on the commissions you'll pay. If you're subject to cgt, then less.If the price just before xd is way different from the price used last week to set the consolidation terms, then there may be an effect on the price going xd, but I'm finding it difficult to work out what that effect would be, if any.

[atlantic57] 23/4/2017 09:30

This has been covered in previous posts
Scroll back got the detail .

[daveofdevon] 23/4/2017 09:27

I would welcome the help of those with sharper minds than me if you would help me with the maths of my plan.

The plan is to sell my NG holding before the XD date and avoid the special dividend and the subsequent consolidation. The cash will be moved to my ISA and all used to buy NG shares in time for the next normal dividend.

For simplicity lets say I have 1200 shares and I sell for £10 (ignore dealing costs). I move £12000 to my ISA and use the whole lot to buy NG back (ignore dealing and stamp). The key question is this :- What will the share price be when I buy back and thus how many shares will I be able to buy ?

Ignore day to day price fluctuations and focus on the the two key events, firstly the effect of the XD and secondly the effect of the consolidation.

I look forward to what I hope will be reasoned answers to the problem and any other thoughts on the wisdom of my plan.

[gateside] 23/4/2017 08:30

Glad mine are all in an ISA. Keeps the tax issue simple.

[atlantic57] 23/4/2017 08:05

There is absolutely nothing in the public announcements to suggest that this is anything other than a special dividend which is liable to pay income tax if it is not in a tax sheltered vehicle.

However if you want certainty the company should be able to at the least give you a steer.

[utyinv] 22/4/2017 23:50

As mentioned some posters may be contacting the Company Sec. Alison Kay...Good luck guys, I know Alison well and all she will do is refer you to HMRC! Hope I am wrong but good luck anyway!

[jeffian] 22/4/2017 12:13

#4555,

UtyINV,

Well spotted, thank you. The perils of c&p! The article mentioned 2 stocks and I posted the wrong one. I've amended the post now.

[bountyhunter] 22/4/2017 10:56

Good to see the dividend policy reiterated there given that the yield is already at 4.3%:

"The Board believes that the expected growth and performance of the current portfolio of assets will continue to support the Group’s dividend policy, which is to grow the dividend per ordinary share at least in line with the rate of annual RPI inflation in the UK each year for the foreseeable future."

[skinny] 22/4/2017 10:35

Page 2 on of the is fairly explanatory.

[bountyhunter] 22/4/2017 10:03

yes often with a special dividend there is a 'B share' alternative to provide the option of avoiding dividend tax implications however unless I've missed something that is not the case on this occasion