F&C Asset Management

tsmiggy

I have 970 Friends Provident shares,and today i received a letter telling me i was getting 97 F & C shares.I have a option to keep them or sell them,but without sounding stupid i do not know what this is all about.Would a kind soul please enlighten me.

Kind Regards

maggiej_2

You are not alone!! Both my OH and I have received these details and do not know what it's all about. Am currently wading thru the bumph on their website and trying to find enlightenment???

As I understand it (?), it looks as though they are rearranging things and as such we'll be allocated some free F&C shares if the demerger goes thru. Recipients of less than 250 of the F&C shares have to complete the green form if they wish to retain the F&C share entitlement. If you don't do anything they are automatically sold and youll receive the cash instead. Don't know if my understanding is correct or not.

No doubt, someone else can advise.

tsmiggy

I have since posting also tried to work my way through the circular lol,and i have also come to the same conclusion as yourself.The thing that i cannot work out is the value if we decided to sell them as against keeping them.

I am slightly more enlightened than i was...... well i think so lol

jh2009

I have the same offer.

Over the past year, Friends Provident (FP) have been trying to sell a number of businesses. The main ones being i think lombard and F and C. Due to the economic situation no one wanted to buy these businesses. It decided to keep the lombard business, but to "distribute" its holding to its shareholders in F and C and let them decide what to do.

The company is also changing things around, changing the ways its set up, and not sure for the reasons but from FP Plc it will become something like FP Group. WE will all get newly named shares in the new FP company, with no difference in teh numbers of shares we hold. (so i hold 1398 FP Plc and will get 1398 FP group shares in exchange).

The company is therefore now at the point of deciding how to share out its F and C Stake.

They are giving out 1 share in F and C for each ten and anyone with more than 2500 FP shares will jsut get F and C Shares posted to them.

Anyone with less than 2500 will get the cash value of their entitlement...... when they are sold..... unless they fill the form in to say they'd prefer the shares.

The current share price is 80.5p at close of business tonight. So ive got 139 shares possibly promised which comes to £112. Or i can keep the shares.

Dilemma what to do. I notice from Hargreaves lansdowns website the shares have been as low as 30p in the last twelve months but could go back to £2, which is where they were pre credit crunch. They have peaked once at £5 a share a few years ago but looking at the last five years that seems a one off peak with no guarantee we will see that value soon.

FP owns 52% of this company, so I wonder whether opting for the cash options a wise idea as surely the share price will plummet with FP dumping its 52% stake on the market at that time (supply and demand), which means we may end up with less than the 80p per share cash value. (which once the dust settles may then rise back up to that amount).

But if I keep the shares, id face dealing charges to sell these at a future date and given the low value (expecting around £100 at current prices) i may need the share price to rise dramatically above 80 p to make this strategy worthwhile.

Nice interesting problem to think about the next few days though..... And i keep changing my mind whether to take the cash or shares......Interesting to see what others think.

vix2000

Thanks for the information. I understand whats happening now. I've been offered 65 new shares so I assume I have 650 FP shares. I will also be interested to see what others think about this.

jh2009

For each 10 shares you have in Friends provident you will get 1 FCAM Share. So if you have been offered 65 FCAM Shares you will have somewhere between 650 - 659 Freinds provident shares.

There is some more information on this link, including frequently asked questions.

http://www.friendsprovident.com/common/layouts/subSectionLayout.jhtml;jsessionid=DQTOJUUASUCPMCWCDY0CFGAKYIPDAIWA?pageId=fpcouk/SitePageSimple%3Ainvestor_fc_demerger#

daviedee

Just got back from holiday and found i'm getting 93 shares ,looking at what there worth think i'll just sell mine. whats anybody think there worth keeping ?

dave

jh2009

Ive been offered 139 of these.

If i take the cash, then assuming they sell for 80p a share, id get £112.

But... i've decided to keep the shares..... for the following reasons:

1, Shares are low value at the moment, and it seems looking back at the share price for FCAM it averages around the £1.60 to £2 mark over the last 5 years before the economic crisis.

2. Ive no desperate need for £112 at the moment, so im going to hang on and gamble that these will be double in value to £1.60 over the next 2 or 3 years. (Had there been £1120 at stake, i may have thought differently)

3. Also although they are 80p, what if i let them sell them now and in july/august when these are sold, the markets crash and i end up with £30 in total and then see them 6 months later recover to £1.20 a share? I personally would rather hold onto them and sell at a time of my choosing.

4. The one thing id have to take account of would be costs, as if i sell them myself id have to pay the selling costs, and to do this id have to see the share price rise 10p i estimate over whatever price Friends provident can seel them for (based on my 139 shares) to break even. If you hold less shares than 139, this break even point increases.

5. I would also note that FCAM are paying a divi, worth 6p a share at the moment (this 6p is split between interim and final dividend). So while i hold them im probably getting a small income. (around £8 a year on 139 shares).

6. Also, friends provident were trying to sell their 52% at a bad time, late last year. When the markets recover there is the chance of takeovers which could see the share price rise from its current 80p level.

---

Of course theres risks involved here with my decision.

1. The share price may be hammered when Friends Provident pull out, although they have still got lots of investment agreements with FCAM,

2. The company could sink, etc like some have (NEw Star) and the shares end up worthless (although as ive no desperate need for £112 at the moment i could live with this)

3. A higher price may be paid when the shares are sold by friends provident as companies rush to get a bigger market share when Friends provident starts dumping its stake. (and so the gains from holding them are diminished).

4. The share price may not recover for years and remain stagnant, and they may stop paying their dividend.

5. FCAM may be a bad company, and Friends provident selling up have a similar effect to FCAM to flushing the toilet.

But ive made my decision........................

The above is obviously based on my own thoughts, and financial situation, and so will differ to anyone else who has this offer and so should not be considered advice to anyone to do the same as me. Basically Its up to anyone else who gets this offer to give it some thought given their own personal circumstances and come to their own decision as to their own entitlements.