Saga share offer

Be_Happy

Well I've taken the plunge and gone for the minimum £1000 just as a 'novelty'. However part of the wording confuses me.


On the invitation to apply it emphasises the closing date and deadline for applications. I had the impression it would be like Royal Mail and if over-subscribed, you got a proportion allocated. However the small print on the application confirmation says "Please note the offer period can close at any time if the limit of required investment is reached."


Does this mean that they could suddenly stop accepting applications even though the deadline has not been reached?

le_loup

Be_Happy wrote: »

Does this mean that they could suddenly stop accepting applications even though the deadline has not been reached?

Well, it probably means:


"Please note the offer period can close at any time if the limit of required investment is reached."


It really couldn't be clearer!

2010

FAT CATS

Bosses at over-50s insurance group Saga will enjoy a multi-million-pound pay day as a reward for presiding over a float set to value the company’s shares at up to £2.5bn.
Saga priced its offer at between £1.85 and £2.45 a share yesterday, in a long-awaited float that will see between 25 per cent and 58.7 per cent of the company sold to new investors.
It aims to raise £550m by issuing new shares while Acromas, which owns 100 per cent of Saga, could sell up to £717m of stock.
Saga’s float prospectus – a door-stopping sheaf of information for potential investors – revealed that executives are in line for huge payouts upon listing.
Chief executive Lance Batchelor will get £1m in cash as soon as the shares start trading, thanks to an agreement signed when he joined from Domino’s Pizza, and a further £1m a year later if he does not resign or get sacked. He will get a further £2m the following year if he stays with the company. Both payments are on top of a pay-and-bonuses package worth up to £2.9m a year.
Executive chairman Andrew Goodsell will be handed shares worth £5m as soon as the company starts trading.

Loaded with debt.

The group said that new money of £550m will be used to reduce the net debt of the company to £700m.

Royal Mail it is not.

Be_Happy

Thanks Le Loup!. My main concern was that in the invitation to apply letter the deadline is prominently highlighted, but there is no mention of the offer closing early.

bowlhead99

2010 wrote: »

FAT CATS
Loaded with debt.

The group said that new money of £550m will be used to reduce the net debt of the company to £700m.

Royal Mail it is not.

That's correct, it is not Royal Mail. If we are looking at absolute pounds of debt, to generate shock value for the readership of the tabloid from whom you're quoting: Royal Mail has 1.4bn of debt and this business only has half that. Debt is used to invest in business and maximise returns for shareholders. It would be ridiculous if Saga didn't have any. As Saga made over 220m of EBITDA last year they can probably afford the interest bill on the 700m.

This is not an investment recommendation, just sayin'....

Tabloid journalism should not be the basis of anyone deciding whether or not Saga represents a good investment opportunity. The 328 page prospectus combined with a sound knowledge of the market valuations of comparable companies, would be a better basis.

The Daily Mail would play this for laughs and describe the prospectus as a 'door-stopping sheaf' of information for potential investors. And highlight to their readership that the current owners of the business (who have hundreds of millions tied up in it) offered some valuable incentives to the CEO to lead the business to, through, and beyond, a successful IPO and allow them to realise those hundreds of millions of proceeds in a multi-stage exit for them. Whether the business will thrive, or merely survive, for its new investor base is unknown, but what they are doing is not at all unusual.

But I would assume the existing owners have greater financial discipline than the Government when it comes to delivering a stage-by-stage exit of their holdings onto the public markets, and will have sought to maximise their own value. This potentially leaves less on the table for the people who buy in. In that sense, the Daily Mail is right that this is not a Royal Mail situation.

However, it has to be remembered that the existing owners are backed by institutional investors who need to get their money back at some point. So the fact they are selling today does not mean there is no more profit to be made. Charterhouse and co originally bought Saga in 2004 on behalf of their own investors. Ten years is more than long enough for an institutional investor like a pension fund or insurance company to have their cash locked up in one private investment. It was inevitable that they would seek an exit when market conditions were sufficiently bouyant, but that shouldn't imply there is no point succeeding them as owner, if it fits with the rest of your portfolio.

2010

The point I`m making is that this IPO won`t be vastly underpriced as was RMG and hence no fast buck.(see post #2)

If people want to buy and hold that`s for them to decide but there won`t be any buying at 330p and selling within weeks for 600p.

yangptangkipperbang

bowlhead99 wrote: »

Tabloid journalism should not be the basis of anyone deciding whether or not Saga represents a good investment opportunity. The 328 page prospectus combined with a sound knowledge of the market valuations of comparable companies, would be a better basis.

I would hazard a guess that the vast majority of the comments in this thread are made with absolutely NO detailed knowledge of this particular offer.

They are based solely on the Sun/Mirror/Mail and "Fred down the Pub" comments .............

Royal Mail was a freak in share offers, the Govt HAD to ensure they all sold, hence the low price - Saga will be exactly the same as the vast majority of share offers - you pays your money and.......................

dealsearcher

2010 wrote: »

The point I`m making is that this IPO won`t be vastly underpriced as was RMG and hence no fast buck.(see post #2)

If people want to buy and hold that`s for them to decide but there won`t be any buying at 330p and selling within weeks for 600p.

In fact the IPO price is not yet known. All that is known at present is a share price between 185p to 245p. That is a wide spread! And a wide spread of a possible dividend payout after a year.


That's quite a punt for investors to make! To pay in advance for shares where you have little idea of the price, how many you would receive and no idea of the performance of the company over the next year.


Some say the stock market is a gamble. This share offer is certainly a gamble! At least some shares have a predicted performance and dividend payout.

2010

dealsearcher wrote: »

In fact the IPO price is not yet known. All that is known at present is a share price between 185p to 245p. That is a wide spread!

In fact not as wide as RMG was originally!

260p to 330p.

christineperseus

Rhymsta wrote: »

SAGA = Suckers And Grandparents Apply

I agree with above comments, not one for a quick killing.

I thought it stood for Sex And Games for the Aged