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Shells proposed purchase of BG
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I am similarly confused as jeff above. I also inherited shares (172) and have the certificate, but haven't the foggiest idea what to do with all the paperwork I have been sent. I think, if I do nothing I will get a cheque effectively meaning I have sold my shares on at the prices (approx) that C_Mababejive mentioned previously. So, doing nothing should see me receive a cheque for £1849.00 (using C_Mababejive's figures). Is that right? ......... anyone assist?
If not - how can I elect to do this?
Grateful for any guidance0 -
No. The cash is there to sweeten the deal but the discrepancy is trading opportunity. You are correct that there is a risk the deal may not go through but investing is all about weighing up and taking risk.Glen_Clark wrote: »Yes but the cash discrepancy is there for a reason, the deal still depends on Shell shareholders voting for it.Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
I don't have the paperwork to hand but as I understand it.....I am similarly confused as jeff above. I also inherited shares (172) and have the certificate, but haven't the foggiest idea what to do with all the paperwork I have been sent. I think, if I do nothing I will get a cheque effectively meaning I have sold my shares on at the prices (approx) that C_Mababejive mentioned previously. So, doing nothing should see me receive a cheque for £1849.00 (using C_Mababejive's figures). Is that right? ......... anyone assist?
If not - how can I elect to do this?
Grateful for any guidance- By default you will receive 0.4454 Shell (RDSB) shares for each BG share you hold
- In addition you will receive £3.83 for each BG share you hold
- Additionally, you can elect to use some or all of the cash component to buy more Shell (RDSB) shares. (Unsure atm if this is at the agreed price or the average market price prior to completion of the deal)
Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
The other question/gamble of course is for BG shareholders who tick box3.2 and elect to receive RDSB shares in return for the sum of all your £3.83s per share.
At the point the deal is done, will it be higher or lower than todays price and if you have a significant shareholding, would it be worth considering buying the equivalent number of RDSBs now at the lowish price currently available..Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..0 -
Interestingly I'm aware of a number of private RDSB investors who have taken the arbitrage opportunity and sold RSDB and bought BG due to the cash discrepancy (who will then become RDSB holders again but having benefited from the transaction)
That would only be an arbitrage if the deal is 100% definitely going ahead.
The difference between RDSB shares and BG shares plus cash represents the risk involved.
As time progresses, if the deal is increasingly likely to go ahead the difference will narrow."If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett
Save £12k in 2025 - #024 £1,450 / £15,000 (9%)0 -
apparently this kind of arbitrage in bid situations is a strategy which some hedge funds use. it is not a pure arbitrage, in the sense that the deal may or may not go ahead. if it does, there is probably a little profit to be made; if it doesn't, there is probably a bigger loss. however, allegedly, on average you gain, because the probability of the deal proceeding x the expected gain is greater than the probability of it not proceeding x the expected loss.
i'm not implying you should invest in hedge funds! even if they have a sensible strategy, they probably charge so much that it's not worth paying for it.
bit this would generally encourage me not to sell prematurely in take-over situations. e.g. if it had BG shares, and didn't want to end up holding shell shares, i would probably accept the default offer anyway, and sell my shell shares afterwards. (in fact, i hold neither BG nor shell shares.)0 -
The proposed cash offered with Shell shares for BG shares, is not the same as the cash discrepancy between BG and Shell current share prices.No. The cash is there to sweeten the deal but the discrepancy is trading opportunity.
This deal was priced at a 50% premium!!! - and when oil prices were about 3 times what they are now!!! Only hubris is preventing Shell management seeing the Elephant in the room, admitting they have offered too much, and walking away. If it goes ahead at that price its bound to increase the price of BG shares and reduce the price of Shell shares. If Shell shareholders reject it BG shares will fall and Shell shares will rise.
So you don't know wheher to take Shell shares instead of cash because their relative prices may be very different by then.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
I am more confused than ever,i hold 1000 Bg Shares and dont really need the cash so initially i was going to convert the cash element to Shell shares but now given the uncertainty in the oil price which will reflect in the Shell shares for the foreseeable future.
Help Please0 -
I am more confused than ever,i hold 1000 Bg Shares and dont really need the cash so initially i was going to convert the cash element to Shell shares but now given the uncertainty in the oil price which will reflect in the Shell shares for the foreseeable future.
Help Please
It depends on future share prices which nobody really knows.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
I don't have the paperwork to hand but as I understand it.....
- By default you will receive 0.4454 Shell (RDSB) shares for each BG share you hold
- In addition you will receive £3.83 for each BG share you hold
- Additionally, you can elect to use some or all of the cash component to buy more Shell (RDSB) shares. (Unsure atm if this is at the agreed price or the average market price prior to completion of the deal)
Thanks cloud_dog.
Taking each of your points... and using C_Mababejive figures again.
So having 172 shares I would receive the equivalent of 76 RDSB shares by doing nothing - which equates to around £1173...?
I would be paid £658.76 for my current BG shares.
With this amount I could use some or all of it to buy more RDSB shares at an agreed or average market price - which would equate to around an additional 43 shares...
If I am correct in the above, I think I need to tick Box 3.1 to elect to receive All Cash - from both BG shares and the equivalent cash value of the RDSB shares - a total of £1832 (approx)
Alternatively I could select box 3.2 to convert the cash (from the BG shares) into new Shell Shares - giving me a total of 119 shares (or thereabouts).
Am I remotely close to the answer....?0
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