Original 913 shares and doing nothing

[LaggyBand]

Hi

Can someone in simple terms explain to me (and the rest of my DO) what the possible outcomes are of a postie who only has their original 913 shares, has done nothing about them, and is intending to do nothing about them?

Thanks in advance

[NWpostie]

I believe if the shareholding threshold is above 95% under City rules Kretinsky has to compulsory purchase the shares off you, if he has controlling interest above 75% but under 95%, he doesn't have to buy them and your shares is essentially worthless.

[Jefferson Starfish]

Hi

Can someone in simple terms explain to me (and the rest of my DO) what the possible outcomes are of a postie who only has their original 913 shares, has done nothing about them, and is intending to do nothing about them?

Thanks in advance

Read this: viewtopic.php?f=38&t=115004

[LaggyBand]

Thank you both.

So does this mean that - in terms of personal financial gain only - there is no reason at all to do nothing?

In other words, selling at the offer price is the best case scenario?

[posted]

I believe if the shareholding threshold is above 95% under City rules Kretinsky has to compulsory purchase the shares off you, if he has controlling interest above 75% but under 95%, he doesn't have to buy them and your shares is essentially worthless.

Significantly incorrect information.

I've summarised below, with quotes from the actual Q&A document.

If the votes comes in above 75%
You will be notified and given an additional 14 days grace to accept the offer, if you wish.

EP Group will be required to keep the offer open for
at least 14 days before the offer is closed. EP Group will give 14 days’ notice before the offer is
closed for acceptance

If EP Group deicide to delist from the Stock Exchange (which they have said they intend to) then you become a minority shareholder - which makes it much harder to find a buyer for your shares in the future.

EP Group intends to delist IDS from the London Stock Exchange and re-register it as a private
company if it attains the 75% threshold.
• If IDS delists from the London Stock Exchange, any remaining shareholders who have not accepted
the offer will be ‘minority’ shareholders in a private limited company and it will be more difficult
to sell their shares.

If the votes come in above 90%
All of the above apply but then EP Group also have the right to purchase the remaining 10% of shares, even if you didn't choose to sell them.

If EP Group acquires more than 90% of the shares to which the offer relates, EP Group will have
the right to compulsorily purchase the remaining shares at the same price. For shareholders who
have not accepted the offer, this means that their shares can be compulsorily purchased as a
matter of law.

[LaggyBand]

Thank you posted

So there’s a risk of them being difficult to sell if delisted - any gain in doing nothing with them? For example a situation where they are somehow worth more than the offer price?

[RobertT]

It is possible the shares could be worth more than the offer price before the sale completes, which might mean a higher sale price being offered.
That might happen if the markets think the company is under valued or someone else makes a better offer. But if that was going to happen, it probably would have done by now.
Bearing in mind, the offer price is effectively £3.68.

Who knows what they might be worth in the future once IDS is a private company?

The financial information of the company going forward will be harder to find, as they won't have to publish their results as they do now.

There isn't a risk the shares will be difficult to sell, they WILL be difficult to sell, and even if you can, there's good chance it'll be at a reduced rate.

A bit of info: https://moneyweek.com/investments/stock ... ck-delists

[LaggyBand]

Thank you RobertT

But I don’t understand the mechanics behind the share price going up. For them to go up, someone must be willing to buy them. Who would be buying shares at this point if they could be forced to sell them at a fixed price soon?

[RobertT]

Not many small investors will be buying now because the potential for profit is very small.

At the time of writing the share price is £3.62, meaning only big investors will make any worthwhile profit if they then sell at £3.60 + 8p dividend when/if the takeover happens.
Some of them deal in millions of shares at a time, so even a 6p gain could equate to a decent profit.

However when the original offer was made back in April the share price was only £2.14, so people buying then will see a much bigger percentage gain.

[LaggyBand]

Thank you for making it clear. Seems there’s no reason to not sell the original shares right now then?

[RobertT]

Whether you sell now or sell under the terms of the takeover(assuming it happens) is up to you.
But if you want to wait until the takeover completes, you'll have to make your intentions known beforehand.
You should have received details on how to do that a few months ago, and I'm sure there's info online somewhere.

I still have the 913 free shares and have already opted to sell at the £3.60 + 8p offer price.
I see no logical reason to hold onto them when/if IDS becomes a private company.

[posted]

Thank you posted

So there’s a risk of them being difficult to sell if delisted - any gain in doing nothing with them? For example a situation where they are somehow worth more than the offer price?

so as a minority shareholder, in a private/delisted company, they are worth whatever somebody wishes to pay you for them... be it Daniel Kretinsky or your Nan or Joe down the pub.

At least on the stock market you a) know what they're worth at any given time and b) there's liquidity in the market to match buyers and sellers.

So it's entirely possible that somebody may want your shares for a lot more than £3.68 but it's also entirely possible that nobody at all wants them. In the latter case they have a paper value of 0 but you still get your voting rights and any dividend payable.

[clashcityrocker]

...but you still get your voting rights and any dividend payable.

I'm not sure that is factually correct.

[posted]

...but you still get your voting rights and any dividend payable.

I'm not sure that is factually correct.

if the voting Class doesn't change then why wouldn't you? But what you can vote on - if there is indeed anything put forward to vote on in a private limited company- is probably the case being made.
But something significant - like should the company be sold (again) - or whatever is in the articles of association/shareholder's agreement, you would get a vote on, if you share class allows it.

[clashcityrocker]

And what dividend is going to be paid?