Please explain the Invensys Schneider deal

loofer

Hi, just received the documentation deal through the post and I'm confused as to what to do
There's a Mix n Match offer and I want to make sure I've understood it correctly.
Here's how I understand it based on 2 options.
I have 152 shares
Option A:
Receive £3.72 cash per share and 0.029555 new shares per existing share.
So that's roughly (£3.72x152) £565 cash and 4.5 new shares (let's assume part shares are allowed). The current share price for Schneider is about £48 so that's £215 worth. Total cash and shares worth £780.
Have I understood that correctly?

option B:
Receive 0.029555 new shares for every £1.30 due under the basic offer (I assume that's the offer above)
So by my calculations that would be
£565/£1.30=£435
£435 x 0.029555= 12.85 shares valued today at ~£48 each
Total £616

Have I got any of this right
A link to the actual deal is here on page 2

Old_Slaphead

My comment may not be of much help but if you don't want to hold a few foreign shares you could always sell your Invensys shares.The value of the offer is around 502p per share and the shares are currently trading at around that level.
Basically option b is offering cash in lieu of Schneider shares ie 502p total

loofer

Old_Slaphead wrote: »

My comment may not be of much help but if you don't want to hold a few foreign shares you could always sell your Invensys shares.The value of the offer is around 502p per share and the shares are currently trading at around that level.
Basically option b is offering cash in lieu of Schneider shares ie 502p total

Thanks. I've no intention to sell my original shares. It's not a huge mount and I've no need for the money.
It's just that option A seems a better deal getting all the cash but I would have thought a company would prefer to issue shares rather than pay can.
Wanted to make sure I made the right decision. Again I don't need the money from the £3.72 per share payment. It would only get spent on something insignificant. Rather re-invest it.

Old_Slaphead

You will get 372p no matter what - youve no choice there. Question is do you want balance as a few foreign shares worth around 25% of you current investment. Divs may be in euros and it may cost you a relatively high broker cost to sell.

Ark_Welder

Don't think of the 435 as £435 - it isn't. It merely represents the number of times that 1.3 will go into 565. In Option B, you are also forgetting to add in the basic entitlement of 152 x 0.029555 shares from Option A (which the form describes as the Basic Offer).

What you have described as Option B is 'Box 3' on the form, i.e. less cash and more shares. There is also 'Box 2', which is to sell each 0.029555 entitlement for 130p cash, i.e. more cash and less shares.

But the outcome of your elections in either boxes 2 or 3 is not guaranteed, it will depend upon what other investors want to do to. Your only certainty at this point - especially if you do want to take only the cash - would be to do as Old Slaphead has suggested and sell Invensys in the market now.

At 48 quid a share, it is also dangerous to think in anything other than whole numbers of shares - not unless there is certainty that fractional entitlements are allowable.

loofer

Old_Slaphead wrote: »

You will get 372p no matter what - youve no choice there. Question is do you want balance as a few foreign shares worth around 25% of you current investment. Divs may be in euros and it may cost you a relatively high broker cost to sell.

Are you sure? That sounds too good to be true and a bit of a no-brainer if I've understood it correctly. It would make the Mix & Match offer an enhanced one where I get the benefit of the Basic Offer plus some additional shares

loofer

Ark_Welder wrote: »

Don't think of the 435 as £435 - it isn't. It merely represents the number of times that 1.3 will go into 565. In Option B, you are also forgetting to add in the basic entitlement of 152 x 0.029555 shares from Option A (which the form describes as the Basic Offer).

What you have described as Option B is 'Box 3' on the form, i.e. less cash and more shares. There is also 'Box 2', which is to sell each 0.029555 entitlement for 130p cash, i.e. more cash and less shares.

But the outcome of your elections in either boxes 2 or 3 is not guaranteed, it will depend upon what other investors want to do to. Your only certainty at this point - especially if you do want to take only the cash - would be to do as Old Slaphead has suggested and sell Invensys in the market now.

At 48 quid a share, it is also dangerous to think in anything other than whole numbers of shares - not unless there is certainty that fractional entitlements are allowable.

Thanks.
I wasn't really interested in Box 2 hence only whittled it down to 2 options.
That amount of cash is negligible so I was more inclined to let them roll over into shares for the long term.
So in my option B I get:
Money & Shares from the Basic Offer
and then some more shares as part of the Box 3 deal

Ark_Welder

loofer wrote: »

So in my option B I get:
Money & Shares from the Basic Offer
and then some more shares as part of the Box 3 deal

If you do take extra shares in Box 3 then this will reduce the amount of cash that you receive as part of the Basic Offer: you lose 130p of cash for every 0.029555 shares gained.

Section 1.2 in the notes on page 3 of the form describes this option.

Old_Slaphead

loofer wrote: »

Are you sure? That sounds too good to be true and a bit of a no-brainer if I've understood it correctly. It would make the Mix & Match offer an enhanced one where I get the benefit of the Basic Offer plus some additional shares

No. I'm sorry I didn't read the offer doc properly (as I've sold my shares recently). It appears you can use some of the 372p cash to buy more Schneider shares, if available