Acquiring more Share Plc shares or not?

[garindan]

Members,

As you know - The Share Centre is in the process of being acquired by a competitor. This has been approved and today confirmation has been sent through that we will obtain 41p per share for our current holding of 500 shares, as we have less than 1197 shares. If we had 1197 shares we'd get a part cash, part shareholding as follows:

4.1 pence in cash and 0.0008355599837 new Anter Holdco A ordinary shares of £0.0001 for each Share Plc share held at the close of business on 30 June 2020.

Added to the above it has been recently communicated to me that the discount on share purchases will be carried over, at least for a while, if a shareholding is maintained. i.e. we have at least 1197 shares on close of business 30 June 2020

This means we essentially have three option on the table, as follows:

• leave everything as it is and take the 41p per share for our 500 share holding

• invest further in company before the 30 June 2020 to take our holding to at least 1197 shares to maintain our discount and receive the partial cash payment of 4.1p per share and the applicable amount of new Anter Holdco A ordinary shares

• invest in a further 696 shares to increase our holding to 1196 shares, just below the threshold and receive 41p a share for all our shares

Some thoughts about these options....

• there was a caveat of a certain pot of money available for the cash element of the deal, so I wonder if this will effect us - it is impossible to tell until actual calculations are done when trading of SHRE shares cease

• the current share price for the company is only 30p, so if we bought another 696 shares it would cost us ~£210 and potentially give us a profit of ~£75 when converted at 41p a share

• the discount we receive on share trades saves us 30% on the commission charged per trade, which is about £3 on our current ~£1000 purchases

So what does everyone think? There may be an element of risk involved if we do buy more shares and the total cash required to complete the takeover exceeds the limit set but the email I received today doesn't explicitly mention it. Everyone should read the offer document here again and share any thoughts with us all.

I'm also not sure exactly how much cash we have available at the moment, but it should be nearing the amount needed to action the second and third options. Maybe Rich can do the valuation soon and we'll know where we stand.

Thanks for your attention.

[pieman]

Interesting post.

If we get 41p per share, does that mean we need to rebuy new shares in order to keep the benefits?

Is there any indication of how many shares we would need to keep in order to keep the current benefits?

If there is an opportunity to effectively make a quick profit, with those points above, it seems logical to me to do so.

[Boro Boy]

I received that same email and it also says that if your account is large enough to warrant the allocation of ii Shares that they will continue discounted share purchase/sales for the present time. Risk management is the case that ii Shares are currently untradeable (as unlisted) but ii's owners have indicated that it may list the company but would not consider this until after it has cleared some company debt notes in 2021. Of course they may decide to never list them but your holding (if you decide that route) of ii shares would qualify for company dividends.

By the way I indicated there was money to be made on the back of this deal some weeks ago but as always not without risk as ii have indicated that once the pot allocated for cash payments of fractional holdings has run out it will not be increased.

I am surprised that your poll doesn't have the option of "sell holding now" as a share holder you qualify for commission free Share.com sales/purchase and a sale would be at no risk at all. I recall you have risk adverse members who may want that option and have their voice heard...

[BeautifulSunshine]

It is important to note that we have done, so far, OK. We used to invest ~£500 per holding and we now invest ~£1,000 per holding; which is double.

I would welcome some details on the commissions for different buy thresholds so imutual Cashback Investment Club investors can make an informed choice and crunch some numbers.

[Boro Boy]

It is important to note that we have done, so far, OK. We used to invest ~£500 per holding and we now invest ~£1,000 per holding; which is double.

I would welcome some details on the commissions for different buy thresholds so imutual Cashback Investment Club investors can make an informed choice and crunch some numbers.

That's all available on the Share.com web site and there are a number of routes there to follow in normal circumstances and the examples are on the basis of not being a Share.com shareholder. How these may differ after the takeover with new ii structure I am unsure (other than the promise on further discounts as a ii shareholder).

[garindan]

I will reply shortly....but I can answer all the questions, I think!

[garindan]

If we get 41p per share, does that mean we need to rebuy new shares in order to keep the benefits?

It sounds like there will be no way of buying back into this share perk/benefit if we sell the shares, not unless we sell and then buy back before the 30th June date when the shares get delisted. The question is how much of a benefit it is to have the discount, which I will cover below.

Is there any indication of how many shares we would need to keep in order to keep the current benefits?

Yes, I did mention this but for sake of clarity here it is again:

• ...at least 1197 shares to maintain our discount and receive the partial cash payment of 4.1p per share and the applicable amount of new Anter Holdco A ordinary shares

I received that same email and it also says that if your account is large enough to warrant the allocation of ii Shares that they will continue discounted share purchase/sales for the present time.

The key here is they have not committed any timeframe to this statement, so it might last a few months, a year or whatever. This is a factor.

ii have indicated that once the pot allocated for cash payments of fractional holdings has run out it will not be increased

I haven't seen this statement - can you let us know where you have seen this please? I have seen that they have not committed to providing any extra monies but have not ruled it out either. They have said that an alternative to running out of cash could be to reduce the amount of shares allocated in ii.

I am surprised that your poll doesn't have the option of "sell holding now" as a share holder you qualify for commission free Share.com sales/purchase and a sale would be at no risk at all. I recall you have risk adverse members who may want that option and have their voice heard...

This would currently mean an 11p per share loss on our purchase price when we started the club, so whilst you are right there would be no risk in selling them and no commission, we'd also be giving up the offer of 41p in favour of 30p. Again, how much risk there is in keeping the shares is not clear. I have asked the question of TSC to check whether the 41p is now guaranteed or not, as the wording of the email suggests it is.

I would welcome some details on the commissions for different buy thresholds so imutual Cashback Investment Club investors can make an informed choice and crunch some numbers.

Commission is £7.50 or 1% above £750 per investment. Our discount is 30% on this commission. Therefore, the difference on commissions is as follows:

£500 investment - £7.50 or £5.25 with perk (saving £2.25 or 0.45%)
£1000 investment - £10 or £7.00 with perk (saving £3.00 or 0.3%)
£3000 investment - £30 or £21.00 with perk (saving £9.00 or 0.3%)

So the reason we always started with at least £525 investments was to ensure we only paid ~1% commission charge (after discount), as it would have been 1.5% at the full commission price. If we hadn't done that we'd had to have invested at least £750 per purchase to replicate the 1% commission, which was beyond our means at the time. This didn't include the additional cost of 0.5% stamp duty on purchases.

Now we invest larger chunks at a time we are only paying ~0.7% after commission rather than 1%, so the percentage saving has been reduced but so has the overall cost.

The long and short of this is if we continue investing £1000 lump sums and didn't have the commission discount perk we'd still be paying 1% like we used to when investing only half as much.

I hope that all makes sense. If not let me know.

[Boro Boy]

ii have indicated that once the pot allocated for cash payments of fractional holdings has run out it will not be increased

I haven't seen this statement - can you let us know where you have seen this please? I have seen that they have not committed to providing any extra monies but have not ruled it out either. They have said that an alternative to running out of cash could be to reduce the amount of shares allocated in ii.

Have you not read/understood the Recommended Offer document? It says quite clearly in there:

Fractions of entitlements to New ii Shares will be rounded down to the nearest whole number of New ii Shares and Share plc Shareholders will receive cash in respect of fractional entitlements to New ii Shares on the basis of the Agreed New ii Shares Valuation, rounded down to the nearest penny, provided that the total amount of cash required to satisfy the cash entitlement of the Offer Consideration under the Offer (including the Share plc Share Schemes Offer Consideration) and such fractional entitlements does not exceed £16.2 million.

You voted For/Against (or abstained) this as part of the conditions at the time of agreeing the takeover...

[BeautifulSunshine]

In my humble opinion, the long-term advantage would be to:

Purchase additional shares to take us to the threshold required to maintain our discount.

[Boro Boy]

In my humble opinion, the long-term advantage would be to:

Purchase additional shares to take us to the threshold required to maintain our discount.

...so be in a position to acquire 1 New ii Share?