Segro Share Discussion Threads

[aspers] 29/3/2009 19:39

fancy buying these to top up my ISA before next week.....are they worth picking up Monday or wait till ex div day later in week???

[r0n] 27/3/2009 15:35

Lotta shorting going on , got this from Self trade

14:07 Loeb Partners Corp. - Disclosure of Short Position
Thu Segro PLC - Annual Information Update
Wed Segro PLC - Holding(s) in Company
Wed SG Option Europe - Disclosure of Short Position
Wed Elgin Capital LLP - Discl. short position - Segro PLC
Wed SG Option Europe - Disclosure of Short Position
Wed HBK Master Fund LP - Disclosure of Short Position - SGRO LN
Tue Guevoura Fund Ltd - Disclosure of Short Position
Tue Trafalgar Asset - Disclosure of Short Position
Tue Bennelong Asset Mgmt - Disclosure of Short Position in company undertaking a Rights Issue

[gill17] 27/3/2009 15:18

Judging by the article in Money Week, its the small companies that will go bankrupt leaving lots of bargains for the big boys. This should be a good long term investment. On reflection I may buy on the falls.

[hooley] 27/3/2009 14:48

49 Bxtn has an equity market value of £53m, a portfolio valued at £1.7bn and a net worth of £0.7bn - L/V of 240%. There's no quick solution, as a rescue rights is hardly credible. Segro had an EMC of about £500m and raised the same amount of equity by way of a deep discount. Bxtn's best bet is a bid, at a discount large enough to attract a predator. Their bankers should be seeking a buyer to cover their loans. My guess is that they will go on supporting their client until a mutually agreeble deal can be done. The price should be well north of 20p.

[hooley] 27/3/2009 14:27

48 Just based on the arithmetic of adjusting the divis declared. The 5.4p final reflects two-thirds of what would have been paid given the rapidly deteriorating circumstances. Had the value of their commercial property portfolio not dropped, an unchanged final would have been about twice the interim of 8.3p. Assuming the 5.4p final is unchanged this year, before adjusting for the rights dilution, implying an interim of 2.9p, the indicated total payment this year would be 1.63p a share - I have been cautious in estimating 1.3p. The yield basis of 6% is approximately what you can get in Land, British Land and Hammerson now that they have been recapitalised.

[typo56] 27/3/2009 12:57

It's not that easy to short SGRO. They are generally unborrowable. If they were easier to short I supect the gap between SGRN and SGRO would be tighter.

[gill17] 27/3/2009 12:04

Thanks for that Hooley. On reflection I might get out if I get the chance and buy back when they are ex div. I like the commercial property sector depite a pretty awful review in Money Week this week. I bought 100k TAP shares a few months ago which have been a pretty solid buy. What do you think about BXTN instead?

[dyllda] 27/3/2009 11:59

Thanks Hooley for the insight. Useful. Just a quick question though: Where did you get your forecasts (divi of 1.3p and yield of 6%)? Probably a stupid question but . . . I do think there is an opportunity for the long term (1-2 years)here and it seems you agree.

[hooley] 27/3/2009 11:29

The underwriters and subs are likely to be left with plenty of stock they don't want. The 12 for 1 rights @ has created 5.24bn new shares. The holders of the old are being asked to cough-up 120p for every share held - a tall order. Current selling is a combination of shorters and those who are selling sufficient shares to take up some of their rights. Payment of 10p for each new share is I believe 6th April. The shorters are likely to continue borrowing and then selling, the u/w may try to support the shares a little above 10p. The old shares ex the divi of 5.4p on the 1st April. With the offer price at 23p, the yield is a juicy 21.7%. Once the divi is out of the equation, my guess is that the shares will weaken further. At some point over the next few months the net asset value of about 44p, adjusted for the rights issue, and and a dividend yield based on a payment of 1.3p for next year should see a rise in the stock, especially as the shorters will need to buy back the shares sold. A 6% yield basis indicates a price 22p and a discount to nav of 50%. Cheap on a 12 month view?

[gill17] 27/3/2009 07:50

Skyship can I pick your brains please as I'm pretty new to this. I have bought 15000 shares at 24p. I expect the price to fall once its ex div by about 5p, but do you think the shorters are trying to make the fall greater than 5p as people loose interest in this share? So, if there is a rise before this date should I sell and buy back and forego the dividend?

[tonysss13] 26/3/2009 17:20

closed the gap a fair bit this afternoon so closed the Arb I took out earlier, will look to reopen should it widen again.

[typo56] 26/3/2009 10:46

3p premium now.

Why not arb long SGRN, short SGRO? 3p profit in 10 days. Okay, "only" about 10% on total position but looks virtually risk free.

Ah, I think the answer may be that it's difficult to short SGRO.

[typo56] 25/3/2009 18:40

SGRO closed at 24.25p. That's almost a 2p premium to buying SGRN at 6.95p Why the big difference?

(I'm assuming offset should be rights of 10p plus dividend of 5.4p)

[dyllda] 25/3/2009 17:45

thats' not quite what I meant. If everybody is selling short at some point they have to buy to close their positions. If everybody closes their positions at the same time then there are too few shares to buy and the price rises - at least that is what I think is meant by a short squeeze. Couple this with the experience of similar post rights issue performances in the sector and there may be a buying opportunity soon - perhaps?

[r0n] 25/3/2009 14:11

Dyllda , I guess if there's enough shorting sentiment the share price will go down as it seems to be doing .This is what the government was stopping recently as it does not indicate a companies worth .A big buy will freighten them off.

[dyllda] 25/3/2009 13:30

Can someone who knows about these things tell me if they think, given the recent spate of declarations of short positions in SGRO we may see a 'short squeeze' as investors unwind these positions? Or is that just wishful thinking? ;-)

[typo56] 23/3/2009 13:06

vision88, that's what I've just said above, but note the payment date is 6 May.

That's why SGRO are trading about 15.5p higher than SGRN, not 10p.

[vision88] 23/3/2009 12:49

am i to assume that any one buying sgro today will be entitled to the dividen on the 1 st April, Payed out on 6 APRIL can some one confirm

[typo56] 23/3/2009 12:34

Sounds complicated.

I don't think that the SGRO/SGRN tracking is precise enough to reliably scalp a tax advantage, and I think the 5.4p is net of basic rate income tax.

[gramsci] 23/3/2009 12:24

So, since the UK govt taxes divis even if received within an ISA, one is better-off foregoing the divi in the SGRO, buying the SGRN within an ISA at the current "track" and selling it after the divi date, taking the full cap gain tax free, rather than buying the SGRO and having part of your divi stolen by HMRC, yeah?

[typo56] 23/3/2009 11:55

Yes, SGRO will still be paying a dividend of 5.4p for all SGRO shares held at close on Tue, 31 March, but not on the nil paid SGRN shares. Payment date is 6 May.

In theory SGRN should track about 15.4p below SGRO until SGRO go ex-div on 1 Apr, then track about 10p below.

SGRN are paid up on Mon, 6 April

[fo77y] 23/3/2009 11:15

forgive my ignorance, but does that mean they will still be paying the 5.4p dividend

[typo56] 23/3/2009 10:41

I make ex-rights parity prices from 136.5p close yesterday as:

24.7p for SGRO
9.3p for SGRN (nil paid rights)

Remember, SGRO go ex-div 5.4p on 1 Apr. The dividend does not get applied to the SGRN shares.

[brando69] 23/3/2009 09:48

what's happened here? it's gone ex rights?

[matthewa] 23/3/2009 08:43

any idea of sgro ex right price should be please?