Aviva plc shares

caveat_emptor

Can anyone explain the latest Aviva share wheeze? They are issuing a class B share that will be converted to cash and paid to the shareholder. At the same time the value of the class A shareholding is being devalued by the amount of the of the class B shares issued. So after this the shareholding will have the same value as it was at the start. What is the point?

Thrugelmir

There's no wheeze. Just a mechanism to allow Aviva to return excess capital back to shareholders in the most cost efficient manner.  The published company circular provided a full explanation. 

Ifts

Capital return for Aviva shareholders 

P1Fanatic

Interesting as my late mother has 204 Aviva shares which I was looking to sell off then saw this. So from watching that video basically you end up with less shares for the same monetary value but actually own a larger % of the company per share once this is all finalised in May?

wmb194

P1Fanatic said:

Interesting as my late mother has 204 Aviva shares which I was looking to sell off then saw this. So from watching that video basically you end up with less shares for the same monetary value but actually own a larger % of the company per share once this is all finalised in May?

Following the consolidation you'll own fewer shares but the *share price* will be comparable to the previous day's i.e. it won't drop by the amount of the return of capital, 101.69p, as it would have otherwise. 

On 31/05/22 or thereabouts you'll receive £207.44 (204 * 101.69p) in your brokerage account or by cheque or direct deposit from the registrar, depending on how you hold them.  

You'll own the same proportion of the company. Net net, all other things remaining equal, you won't be any better or worse off.

Thrugelmir

P1Fanatic said:

Interesting as my late mother has 204 Aviva shares which I was looking to sell off then saw this. So from watching that video basically you end up with less shares for the same monetary value but actually own a larger % of the company per share once this is all finalised in May?

If shareholders own a 100% of the company and all receive the same distribution. How is it possible to own more of the company? 

P1Fanatic

Thrugelmir said:

P1Fanatic said:

Interesting as my late mother has 204 Aviva shares which I was looking to sell off then saw this. So from watching that video basically you end up with less shares for the same monetary value but actually own a larger % of the company per share once this is all finalised in May?

If shareholders own a 100% of the company and all receive the same distribution. How is it possible to own more of the company? 

Per share. Previously you had 100, post B share scheme you end up with 76.

caveat_emptor

Thrugelmir said:

There's no wheeze. Just a mechanism to allow Aviva to return excess capital back to shareholders in the most cost efficient manner.  The published company circular provided a full explanation. 

 A clever or amusing scheme, I would call that a wheeze

Thrugelmir

caveat_emptor said:

Thrugelmir said:

There's no wheeze. Just a mechanism to allow Aviva to return excess capital back to shareholders in the most cost efficient manner.  The published company circular provided a full explanation. 

 A clever or amusing scheme, I would call that a wheeze

In the real world there's a due process that needs to be followed to effect the transaction to comply with both law and regulation. Though I do agree that there's many people who invest that have little idea what they are doing. Unfortunately will get caught up in a wheeze at some time during their investing lifetimes. As there's no shortage of people who'll expose the lack of knowledge to their own advantage. Takes two to trade, there's somebody else on the other side of bargain. . 

wmb194

caveat_emptor said:

Thrugelmir said:

There's no wheeze. Just a mechanism to allow Aviva to return excess capital back to shareholders in the most cost efficient manner.  The published company circular provided a full explanation. 

 A clever or amusing scheme, I would call that a wheeze

B share schemes are nothing new. It's just often a better way than paying it as a dividend e.g., because the company doesn't have the retained earnings to pay such a large dividend or it suits shareholders who don't want to have to class it as income.

Baoser

I currently hold 275 Aviva shares. I'm now going to have to be forced to buy additional shares to round it up to a multiple of 100 or I end up losing 75 shares as there'll be no fractional shares!

Consolidating sucks if you're after the dividend. Whilst the initial value of the shares remain the same, since you'll have less units you'll have a smaller multiplicator.