TSB Share offer

Scott_Grant

TSB have agreed a takeover bid from a Spanish bank and all shareholders have been offered £3.40 per share. my choices are 1. take the offer or 2. do nothing and do not participate in the offer.

Any advice on what I should do or can anyone tell me what will happen if I do nothing.

bowlhead99

Scott_Grant wrote: »

Any advice on what I should do or can anyone tell me what will happen if I do nothing.

What did you conclude after reading the offer documentation?

Basically if they get 90% acceptance they can do a compulsory purchase to squeeze out the minority shareholders. If they don't get that level of support (and they have already got it from directors and will likely get it from all major shareholders), they can't force you out, but assuming they have 75% control they have said they will delist it.

As a tiny minority holder in an unlisted company you will receive much less information about your holdings going forward and without a liquid market to trade your shares, would find it difficult to sell out in the future (except to the majority owners, and not necessarily at a price you think is at all fair).

If you don't really read the info they send you at the moment maybe you wouldn't miss the reduced frequency and transparency of reporting. However with one massive majority shareholder always voting in their own interests, you should presume they won't make decisions that you like, and any votes you have will be meaningless.

Advising on investment decisions is a regulated activity in the UK so you won't get "advice" here. However, my friendly suggestion would be, accept the offer, unless you are mad.

Zippeh

I am in the same boat. I have a small number of shares. I have accepted the offer. Again though, its up to you

Steve_Foster

According to Laith Khalaf, senior analyst at Hargreaves Lansdown. He reckons that if you are inline for the bonus shares its worth a punt at keeping them. I would google the link but as a new member its forbidden.

bowlhead99

Maybe he wrote that before Lloyds said they would pay out anyway. Google that instead.

Zippeh

The documentation says that if youre inline to receive the bonus shares, then you'll get them at the 340p price on offer (if that is accepted by the required amount of holders).

Paul_1977

I am accepting the offer, I have more money than I put in, happy.

Steve_Foster

Zippeh wrote: »

The documentation says that if youre inline to receive the bonus shares, then you'll get them at the 340p price on offer (if that is accepted by the required amount of holders).

If thats the case then I might as well sell. There was that much to read it confused a luddite like me.

fifeken

bowlhead99 wrote: »

Maybe he wrote that before Lloyds said they would pay out anyway. Google that instead.

I was curious about this too. I wrote in another thread that the offer document says that if the offer becomes unconditional before June 25th, the I'll get the equivalent of my 5%. From what I read, the offer at the moment is recommended, but not unconditional.


Does this change things or am I thinking too much?

bowlhead99

fifeken wrote: »

I was curious about this too. I wrote in another thread that the offer document says that if the offer becomes unconditional before June 25th, the I'll get the equivalent of my 5%. From what I read, the offer at the moment is recommended, but not unconditional.

You are right, it is not unconditional yet. It is conditional on them getting a satisfactory amount of acceptances, various regulatory stuff etc etc,

If it goes unconditional before 25 June, when you would have got your free bonus shares, but instead the fact of it going unconditional means they will take your shares and give you cash so you're no longer a shareholder, Lloyds will pay you out the bonus in cash, calculated on the offer price.

If the offer period extends beyond 25 June and is not unconditional at that point, you won't have transferred your shares to Sabadell (because they could still return them to you if the offer never goes unconditional), you will still be a shareholder so will qualify for the bonus and Lloyds will pay you out the bonus in cash, calculated on the offer price - whether or not the deal eventually goes unconditional or lapses and fails.

If the offer period lapses and fails before 25 June, you will not have succeeded in selling your shares to Sabadell. So, back to business as usual, which includes you getting a bonus if you keep your shares in line with Lloyds's previous commitment to you when you bought them.

8. Bonus share scheme
At the time of the IPO of TSB in June 2014, Lloyds implemented a bonus share scheme pursuant to which retail investors acquiring shares in TSB through the IPO and holding those shares for 12 months thereafter would, subject to certain conditions and limits, be entitled to receive a number of free and fully-paid up additional shares (Lloyds Bonus Shares) from Lloyds following that 12-month period (which expires on 25 June 2015). The terms of the scheme contemplate the scenario where a change of control of TSB occurs before the entitlement to the Lloyds Bonus Shares crystallises and provides that in such circumstances Lloyds would make arrangements to compensate investors. Accordingly, if the Offer becomes or is declared unconditional in all respects before 25 June 2015, Lloyds will make arrangements to pay, to any investors who would have been entitled to receive such Lloyds Bonus Shares under the terms of the scheme, the cash value of those Lloyds Bonus Shares (at the offer price to be paid by Sabadell). In addition, if the Offer period extends beyond 25 June 2015 (whether or not the Offer becomes or is subsequently declared unconditional in all respects or lapses) Lloyds intends to extend the compensation arrangements described above such that, in those circumstances, it will make arrangements to pay to any investors who are entitled to receive Lloyds Bonus Shares under the terms of the scheme, the cash value of those bonus shares (again at the Offer Price to be paid by Sabadell).

The board of TSB has discussed these arrangements with Lloyds and is fully supportive of the arrangements that have been made

fifeken

Thanks again - You've clarified things and I'll be accepting.


It was already over 30% increase in less than a year since the sale and I likely would have accepted anyway, but this extra just sweetens the deal that bit more.