Another takeover?

C_Mababejive

redmalc wrote: »

Guys all so complicated,I have a substantial number of Bg shares and also Centrica.
I keep seeing Centrica mentioned in the deal but surely that is a separate entity and not part of the sale

Centrica (CNA) has nothing whatsoever to do with it. In fact it might be a good time to stock up on centrica as its share price has been wrecked by Red Eds comments on energy prices but once he is beaten in the election, things will pick up.

Motormad

Can anyone tell me why the BG share price has slipped back to £11.50 ish when the bid is worth £13 ish.Thanks.

nobblyned

Glen_Clark wrote: »

In which case it would benefit both sets of shareholders in the combined company equally without one paying the other a 52% premium.
So I am still none the wiser ...

Lego is worth 2p per piece. You have a nearly complete Star Wars millennium Falcon lego set, but you are missing one piece. Complete it is worth £50, incomplete £40. I have the missing piece, few people have it. On its own it is only worth 2p, I know that, but what would I charge you? Even if I charged you £5 the situation is still mutually beneficial.

wastedtalent

Motormad wrote: »

Can anyone tell me why the BG share price has slipped back to £11.50 ish when the bid is worth £13 ish.Thanks.

There's always a risk the deal wont go through, so some people will sell off now at slightly lower than the offer price.

TakeCareOfThePennies_2

Motormad wrote: »

Can anyone tell me why the BG share price has slipped back to £11.50 ish when the bid is worth £13 ish.Thanks.

You are confusing talk with action.

When there's talk or announcements of bids, the usual effect is that the price increases in the market.

cloud_dog

Glen_Clark wrote: »

Thanks for the link. 52% - over twice the average, seems a hell of a premium to pay for the dubious benefit of it all being controlled by Shell management - when BG management have shown themselves to be the better negotiators by getting such a high premium.

You need to remember that the Board of Directors are there to serve the shareholders.

Usually this means running and growing a company to the benefit of shareholders (SP growth / divi).

So as a shareholder in BG why would you sell your shares if they are only offering the going price? You wouldn't. The 'selling your house' analogy is very good. If you weren't looking to sell, i.e. you liked the area / street / neighbours / school etc etc but someone wanted to buy your house, was desperate to buy your house you would feel entitled to ask a premium to the going rate for a comparable house.

And it is exactly the same in these types of mergers.

The questions around why Shell feel comfortable offering such a premium and why their large shareholders would feel comfortable doing so are wide and many.

Same with BG (on the other side of the fence). There are instances where the BG company feel the offer undervalues them and they can gain better shareholder value by continuing with their existing growth strategy.

Again, its all in the shareholders interest (usually), or at least the large institutions / holders.

cloud_dog

Motormad wrote: »

Can anyone tell me why the BG share price has slipped back to £11.50 ish when the bid is worth £13 ish.Thanks.

The Shell / BG offer has a relative element to it, i.e. £3.83 plus 0.4454 RSDB shares for each BG share.

The £13ish you quote is based on 90 trading day volume weighted average price of 2,170.3p (It's all in the RNS). If you feed it all through you'll come out with just under £13.50.

If you base it on the current SP you'll get about £12.74.

And, as someone's already said there is the risk it won't go through (regulators etc).