Phoenix Share Discussion Threads

[jonwig] 24/6/2018 18:08

This week's IC tells us that the "shares will go xr on 21 June".

[hvs] 23/6/2018 12:33

What point is that ?

[edmundshaw] 23/6/2018 08:36

If you take up all your entitlement you keep the same proportion of voting rights whatever the "discount". Given that you can sell some/all of your rights, you can also spend as much as you like to keep a proportion of your rights. Psychological trickery is not going to work on pro investors. I still don't see the point...

[zangdook] 23/6/2018 01:08

How do they "decide on the discount to the prevailing share price they have to set on the issue to get it away"? Is there a way of calculating that so precisely that 7 for 15 (1 for 2.14) is really preferable to 1 for 2? Presumably the advisors will pretend there's some dark art of complex calculations to justify their fees, but is there really?

I can see that they want there to be a bit of a discount - if they proposed one new share at £2420 for every thousand shares held no-one would take it up.

[grahamburn] 22/6/2018 20:48

With all due respect, "why should I care" is an illogical response, although you are correct about "forking out" the same amount of cash if you take up the full entitlement.

Apart from many other considerations in the company's mind, the larger the discount to the pre-rights market price creates a negative psychology amongst investors which discourages many to take up their rights. After all, the resultant ex-rights market price is indirectly connected to the resultant total number of shares in issue - in your preferred scenario of 1:1 there would be double the number of shares after the rights issue. This does matter to shareholders and the market generally as well as perceptions of the company.

[jonwig] 22/6/2018 20:21

nobbyx - they have to raise £950m, which is about £2.42 per existing share. So if I know that's the amount they want from me, why should I care whether it's 1:1 at 242p, or 1:2 at 484p, or 7:15 at 518p? I'll still be forking out the same money.

In what sense is the price discount relevant? The only thing I can think of is that the more new shares issued (ie. the lower the price) the more voting rights are garnered.

I'm not trying to contradict you, but common sense makes me agree with edmundshaw.

[nobbyx] 22/6/2018 19:46

Companies wish to raise a certain sum and then decide on the discount to the prevailing share price they have to set on the issue to get it away. That determines the number of shares at that price they must create, and the ratio is what falls out of this. They don't ask themselves what would be a nice round number ratio to make the calculations of some small shareholders easier and then adjust the number of shares in the issue and the issue price accordingly. Horses before carts, please!

[edmundshaw] 22/6/2018 15:36

Rights issues often have strange x for y ratios - 7 for 11, 3 for 10, etc. I have no idea why, but it seems to be almost de rigeur...

[hvs] 22/6/2018 14:07

Looking forward to the ex-rights price action. I have no idea at all what it's going to do.

This is something you hold long term. The deal they have just done will work wonders for share price in due time.

Meanwhile enjoy the juicy yield.

Meanwhile the prospect of PHNX joining the FTSE 100. Patience is needed not patients.

[zangdook] 22/6/2018 11:41

I just want to get the full amount of rights I'm entitled to, so I had to round up to a multiple of 15. I've stretched myself a little as a result, so if all goes well I'll dump a few after and get the numbers rounded then. 1210 isn't very round! Nor is 7 for 15 - what are they playing at? Why not 1 for 2 at 484p?

[stun12] 22/6/2018 09:11

Lol, no, but I want to end up with a round number. For e.g., my son has 535 in his Lifetime ISA and also had some spare cash. Buying 290 takes it to 825. 7 for 15 is 385 => 1210. Pleases my OCD.

[hvs] 22/6/2018 08:43

lol !!!!

Did you fail maths ?

[stun12] 22/6/2018 08:16

Topped up the accounts to make nice round numbers after the rights. Could do with an Excel spreadsheet. 7 for 15, FFS.

[hvs] 21/6/2018 16:47

Just asking. I'm certainly going to take up my full entitlement on my present holding.

Me as well its a bargain with the next divi not far away.

[nobbyx] 21/6/2018 14:12

Last week's 'Chronic Investor' was in its inimitable style telling the world that 'ex rights' was June 21st. Looks like they simply picked up on the June 22nd 'On-Record' date and went back a day as in the case of 'ex-div'.

[nobbyx] 21/6/2018 14:04

From my broker:

Phoenix Group is proposing a Rights Issue on the following basis:
7 Nil Paid Rights for every 15 Ordinary shares held on the Ex-entitlement Date of 26th June 2018.

This ties in with Grahamburn's post 2182 where his broker states: "The ex-entitlement date is 26th June 2018".

Yet as ianood posts "Pursuant to the Rights Issue, the Company is proposing to offer 183,522,385 New Shares by way of rights to Qualifying Shareholders as at the close of business on 22 June 2018 (the “Record Date”.

Would appear to be a contradiction. Reading this legalese I wonder if the thing being placed on 'Record' 22 June is not the identity of the qualifying shareholders, which will not be known until the 26th, but the agreed number of shares in the offer, namely 183,522,385. A legal requirement perhaps to make clear that the number of new shares to be issued can not be altered at the last moment through some chicanery?

Just asking. I'm certainly going to take up my full entitlement on my present holding.

[ianood] 21/6/2018 11:17

Definitive Details of the Rights Issue:

Pursuant to the Rights Issue, the Company is proposing to offer 183,522,385 New Shares by way of rights to Qualifying Shareholders as at the close of business on 22 June 2018 (the “Record Date”). The offer is to be made at 518 pence per New Share (the “Issue Price”), payable in full on acceptance by no later than 11.00 a.m. on 9 July 2018. The Rights Issue is expected to raise gross proceeds of approximately £950 million.
The Issue Price represents a 25.1 per cent. discount to the theoretical ex-rights price of 691 pence per Share

Phoenix Group Holdings: Rights Issue Announcement 30 May 2018
calculated by reference to the Closing Price on 29 May 2018.

hxxp://www.thephoenixgroup.com/~/media/files/p/phoenix-group-v3/attachments/pdf-disclaimer/rights-issue-announcement.pdf

[nobbyx] 21/6/2018 10:49

If this share goes ex-rights on Tue 26th then presumably PHNX shares bought on Fri 22nd and Mon 25 are entitled to the rights. How does this square with the Record Day being on the 22nd? What is being 'recorded' on the 22nd if that is not the day when the exact record of who is entitled to the rights has been finalised?

[ianood] 21/6/2018 08:14

It's the same only with a rights issue, it is the date by reference to which entitlements of shareholders to nil paid rights are calculated.

[zangdook] 21/6/2018 08:01

Thanks but that's just an explanation of ex- and record dates for dividends, which I understand. It doesn't explain the inversion of the dates we see with rights issues. That's what puzzles me.

[ianood] 20/6/2018 18:37

Z - courtesy of Investopedia.com

"Record Date
The record date is set by the board of directors of a corporation and refers to the date by which investors must be on the company's books in order to receive dividends for a particular stock. Record dates basically serve as notice to the board of directors of the people to whom they should send stock reports and other financial information relating to the investment.

Ex-Dividend Date
An ex-dividend date is dictated by stock exchange rules and is usually set to be two business days before the record date. In order for an investor to receive a dividend payment on the listed payment date, he would have to have his stock purchase completed by the ex-dividend date. If the stock sale has not been completed by the ex-dividend date, then the seller on record is the one who receives the dividend for that stock. So, for example, if a record date is set for May 30th, the ex-dividend date would typically be set for the 28th of May. However, if May 30th is a Monday, the ex-dividend date would then be Thursday, May 26th. If the buyer has not completed his purchase of the stock by May 28th, he will not receive a dividend."

[zangdook] 20/6/2018 13:06

I would, some day, be interested to learn why RI record dates are before the ex-dates while dividend record dates are after them. It's always puzzled me and there must be a simple explanation. But the advice that you should pay attention to the ex-date and not the record date stands.

[grahamburn] 20/6/2018 12:00

Just to kill off this interminable discussion about record dates and ex-rights dates, here is a definitive statement from my broker (II):

PHOENIX GROUP HOLDINGS
Event Type
Corporate Action Status Update
Description
The Board of Phoenix Group Holdings have announced a Rights Issue to raise gross proceeds of approximately GBP950 million. The ex-entitlement date is 26th June 2018.

Entitled shareholders will be issued with 7 rights for every 15 existing shares held. Each right will entitle the holder to purchase 1 share in Phoenix Group Holdings at GBP5.18 per share.

Please note, we will only start accepting instructions when the rights have been issued into entitled shareholder accounts; this is expected to be on or just after 26th June 2018. We will contact all entitled holders on or just after 26th June 2018 with full confirmed details of the Corporate Action.

The options are expected to be:

Option 1: Rights to Lapse (Default)
Option 2: Rights to Exercise
Alternatively holders can sell some or all of their rights online should a market exist

The default option will apply to all holders whose instructions are not received by the deadline date.

Selling the Rights:
If a market exists holders may also choose to sell their rights online, or sell enough of your rights to cover the cost to exercise the remainder, this is known as tail swallowing.

Lapsed Rights:
Holders who allow their rights to lapse may receive a cash payment from the Company up to 4 weeks after the close of the Offer. Any such funds will be credited to your account upon receipt.

[miti 1000] 20/6/2018 07:30

jonwig...point taken !!