McBride plc B Shares Entitlements

ElephantBoy57

I have just noticed the above shares and B Shares Entitlement.

I noticed RR are in trouble, is that what this is?

Should I be thinking about buying, is there a discount for share holders?

wmb194

ElephantBoy57 said:

I have just noticed the above shares and B Shares Entitlement.

I noticed RR are in trouble, is that what this is?

Should I be thinking about buying, is there a discount for share holders?

McBride has always been a bit rubbish but it still appears to be just about profitable. These B shares appear to be some sort of shenanigans around the payment of a dividend:
"The Board cancelled the interim payment to shareholders of 0.8 pence per ordinary share declared in February 2020 as a result of uncertainty relating to Covid-19. In the light of the Group's earnings for the year and the delay in conclusion of the revised dividend policy going forward, the Board recommends a final payment of 1.1 pence to shareholders. It is intended this will be issued using the Company's B Share scheme on 27th November 2020 to shareholders on the register on 23rd October 2020. Elections for cash must be received by 1pm on 13th November 2020."
"Payments to ordinary shareholders are made by way of the issue of B Shares in place of income distributions. Ordinary shareholders are able to redeem any number of the B Shares issued to them for cash. Any B Shares that they retain attract a dividend of 75% of LIBOR on the 0.1 pence nominal value of each share, paid on a twice-yearly basis."
https://www.investegate.co.uk/mcbride-plc--mcb-/rns/final-results/202009080700082852Y/

ElephantBoy57

What are my choices?

Option 1: You can receive cash in lieu of the B Shares. Should you redeem your holding of B Shares you will receive cash at a rate of 0.1p per B Share. This payment will be classed as Capital for UK Tax purposes. Please note that this is our default option. To elect for this option and receive cash in place of your B Shares you need take no further action. Cash in respect of B Shares redeemed will be credited to your Capital Account from 27 November 2020.

Option 2: You can elect to retain the B Shares. You may retain the B Shares and we will inform you of any future redemption opportunities in due course. Please note that any future redemption offer will also be at a rate of 0.1p per B Share so the amount you would receive for your B Shares will be the same. The B Shares will not be listed or traded on any Stock Market and will not be a Qualifying ISA Investment. The B Shares will pay a dividend at a rate of 75% of LIBOR (London Interbank Offered Rate) on the fixed nominal value of 0.1p, paid on a twice-yearly basis.

When do I have to decide by?

Any election to retain the B Shares must be received in this office by noon on Thursday 12 November 2020. If no instruction is received you will receive cash in place of the B Shares (Option 1).

I will probably just go with the default option, I don't want to be left with B shares of very little value, which will cost £10+ to redeem. Which is what happened with my Galliford Try Holdings Plc, which are worth £70

bowlhead99

The mechanics of paying you a dividend of about 1% as redeemable B shares will be useful for those preferring a capital distribution to dividend income from a tax perspective (which would be many retail investors). But you're right that once the B shares have been distributed to you there is not a lot of point holding some small amount of those received B shares (which are not tradeable on a market) and waiting for some later redemption opportunity (which will be at the same price as it is today), when the only return you'd make on them is 0.0075% dividend yield.

Assuming the amount involved is trivial you might as well just stick with the default option and take the cash.

John464

wmb194 McBride has always been a bit rubbish

From what I have seen their products are alright, but they don't have a brand name, so can't get a good price for them.
Many years ago I got an S&S ISA with Hargreaves Lansdown because the fees were low - they seem to be running it as a loss leader to hook you in.
HL were underwriters for Mc Bride and one of the circulars I got from HL was ramping their shares so HL could offload them.  Fortunately I binned it with the rest of their Spam.