BBGI Corporate takeover - possible loss of entire value of shareholding?

itm2

My wife and I owned shares in BBGI Infrastructure, on the Interactive Investor platform. The shares were spread between two ISA's and a SIPP. Following a takeover bid for BBGI a couple of months ago, we were asked to respond to a corporate action notice by choosing one of the following options:

"OPTION 1: Do nothing (Default). You will keep your current holding if you do nothing.

OPTION 2: Accept the offer and receive GBP1.433 in cash in exchange for each BBGI share held. Enter the number of your shares you wish to accept the cash offer for"

We chose option 1, in part because we assumed that there was no risk associated with keeping our existing shares, and also because it was presented as the default option.

The BBGI shares have now been de-listed, and are shown in our portfolios with a price/value of zero. I contacted Interactive Investor today to ask when the proceeds of the corporate takeover would be reflected in my account (presumably as cash). This was their response:

“With BBGI the offer is currently closed to acceptances. Since you never elected with us to accept the offer, what happens now is in the hands of the the company. As we stated in our most recent Corporate Action notice on this;

 "As the Takeover has now become unconditional, the company have made an application for the cancellation of the admission to trading of BBGI shares on the Main Market of the London Stock Exchange. It is expected that such cancellation of listing and admission to trading will take effect on 18th June 2025. The offeror may also acquire the company's portfolio, and the amount distributed to those shareholders that do not accept the offer may not be the same as the offer price. Further details can be found by following the links below: 

https://www.bb-gi.com/media/2446/offer-document-final-version.pdf

https://data.fca.org.uk/artefacts/NSM/RNS/5662181.html"

 Therefore for this offer we can neither tell you when you'll be paid or if you ever will be paid; it depends what the offeror choose to do and whether they choose to compulsorily purchase the shares of shareholders who didn't accept the offer. If we hear any news we'll issue a Corporate Action notice about it, but as yet we have heard nothing further since the offer period closed."

This suggests that, in the worst case, we may lose the entire value of our BBGI holdings (a considerable sum), which is pretty alarming. 

Further to this, Interactive Investor advised in the de-listing notice for BBGI that the unlisted shares that we now hold are not eligible to be held in either an ISA or a SIPP, and that "we will arrange to move your shares to a linked trading account, opening one on your behalf if you do not already have one".

This is not a possibility that was presented to us in any of the corporate action notices.

I was wondering if anyone else had been in a similar situation? Any views on what is likely to happen next?

wmb194

itm2 said:

My wife and I owned shares in BBGI Infrastructure, on the Interactive Investor platform. The shares were spread between two ISA's and a SIPP. Following a takeover bid for BBGI a couple of months ago, we were asked to respond to a corporate action notice by choosing one of the following options:

"OPTION 1: Do nothing (Default). You will keep your current holding if you do nothing.

OPTION 2: Accept the offer and receive GBP1.433 in cash in exchange for each BBGI share held. Enter the number of your shares you wish to accept the cash offer for"

We chose option 1, in part because we assumed that there was no risk associated with keeping our existing shares, and also because it was presented as the default option.

The BBGI shares have now been de-listed, and are shown in our portfolios with a price/value of zero. I contacted Interactive Investor today to ask when the proceeds of the corporate takeover would be reflected in my account (presumably as cash). This was their response:

“With BBGI the offer is currently closed to acceptances. Since you never elected with us to accept the offer, what happens now is in the hands of the the company. As we stated in our most recent Corporate Action notice on this;

 "As the Takeover has now become unconditional, the company have made an application for the cancellation of the admission to trading of BBGI shares on the Main Market of the London Stock Exchange. It is expected that such cancellation of listing and admission to trading will take effect on 18th June 2025. The offeror may also acquire the company's portfolio, and the amount distributed to those shareholders that do not accept the offer may not be the same as the offer price. Further details can be found by following the links below: 

https://www.bb-gi.com/media/2446/offer-document-final-version.pdf

https://data.fca.org.uk/artefacts/NSM/RNS/5662181.html"

 Therefore for this offer we can neither tell you when you'll be paid or if you ever will be paid; it depends what the offeror choose to do and whether they choose to compulsorily purchase the shares of shareholders who didn't accept the offer. If we hear any news we'll issue a Corporate Action notice about it, but as yet we have heard nothing further since the offer period closed."

This suggests that, in the worst case, we may lose the entire value of our BBGI holdings (a considerable sum), which is pretty alarming. 

Further to this, Interactive Investor advised in the de-listing notice for BBGI that the unlisted shares that we now hold are not eligible to be held in either an ISA or a SIPP, and that "we will arrange to move your shares to a linked trading account, opening one on your behalf if you do not already have one".

This is not a possibility that was presented to us in any of the corporate action notices.

I was wondering if anyone else had been in a similar situation? Any views on what is likely to happen next

I wouldn't panic, it's just that you now own shares in an unlisted company. 

BIB, these are businesses buying businesses, they're not thinking or caring about every little nuance that affects a retail investor.

Looks like because it's a Luxembourg company, unlike with English law, there's no way for the acquirer to compulsorily purchase the rump shares that didn't agree to the offer. You're probably just going to have to let it play out. Perhaps you'll be made another offer to purchase your shares.

These extracts from the offer document are out of order, smaller picture should follow the first:

masonic

You are now owners of unlisted shares. As mentioned, it is up to the new owners whether they will purchase the shares from you and what price they'd be prepared to pay for them. As they are no longer publicly traded, you cannot sell them to anyone else.

The default option is what must happen if shareholders do not engage with the process. It was not a compulsory purchase, so your shares could not be taken from you without your consent.

There is always risk associated with keeping shares. There is arguably more risk in holding unlisted shares because you cannot sell them whenever you wish, and they are not valued regularly.

II is correct that they would not now be eligible to hold in an ISA or SIPP, so they'll have to be removed. So you will end up with these shares in a general investing account until such time as the company offers to buy them from you, relists, or folds.

Edit: Based on wmb194's extracts above, another option is that they sell off the assets and you get a share of the proceeds via (taxable) dividend.

You may get some further info from  Info (at) bb-gi.com

bobfredbob

Your shares were in an ISA/SIPP and are now in a GIA.  Can someone explain how that works?

I understand there's probably government rules saying you can't hold these non-tradable shares in a SIPP/ISA, but it seems wrong that you suddenly get a (potentially) lump sum in a GIA that was meant to be in a pension, and then maybe can't even add it to back to the ISA/pension due to contribution limits.  Can they really just move "money" out of a SIPP?

Even worse if you now suddenly have to pay some CGT/dividend tax on it.  So, if you had, say, 50k invested and it's suggested they may pay you a 50k dividend to buy it off you?

I'd also ask how you declare this on your self assessment since I imagine you must have to fill it in somewhere since, to me, it seems you would get tax relief on the SIPP and then tax relief again when you re-deposit the proceeds in the pension.  I'd want to be very clear I wouldn't be getting an unexpected tax bill in the future.

masonic

bobfredbob said:

Your shares were in an ISA/SIPP and are now in a GIA.  Can someone explain how that works?
I understand there's probably government rules saying you can't hold these non-tradable shares in a SIPP/ISA, but it seems wrong that you suddenly get a (potentially) lump sum in a GIA that was meant to be in a pension, and then maybe can't even add it to back to the ISA/pension due to contribution limits.  Can they really just move "money" out of a SIPP?
Even worse if you now suddenly have to pay some CGT/dividend tax on it.  So, if you had, say, 50k invested and it's suggested they may pay you a 50k dividend to buy it off you?
I'd also ask how you declare this on your self assessment since I imagine you must have to fill it in somewhere since, to me, it seems you would get tax relief on the SIPP and then tax relief again when you re-deposit the proceeds in the pension.  I'd want to be very clear I wouldn't be getting an unexpected tax bill in the future.

This can happen for a number of reasons. The most common is an investment changing its listing, as has happened recently with a few ETFs. There is generally an opportunity to either sell the shares on the open market or accept an offer to avoid holding the original shares beyond the date they lose eligibility. When holding exchange traded investments it really is important to keep abreast of shareholder communications and act on corporate actions. This is how you avoid falling foul of such scenarios. If you are unable to do this, it may be better to stick to OEIC and UT investments.

In other circumstances where assets are removed from the SIPP wrapper (e.g. exceeding the earnings limit), the tax relief is paid back to HMRC. In this scenario, the original tax relief on the money used to purchase the shares may be difficult to ascertain, so who knows how II would handle it.

Unlisted shares are legally permitted to be held in a SIPP, however, this creates a problem as the provider has a legal obligation to ensure they are disposed for fair market value, which cannot be established when unlisted. So it is the scheme rules that usually prohibit this to avoid the scenario. There is an interesting FOS decision around this: https://www.financial-ombudsman.org.uk/decision/DRN0395848.pdf

Whereas for an ISA, unlisted shares are not legally permitted. For a non-flexible S&S ISA, we know from other threads that this part of the allowance is lost if assets must be removed.

Hoenir

itm2 said:

This is not a possibility that was presented to us in any of the corporate action notices.

I was wondering if anyone else had been in a similar situation? Any views on what is likely to happen next?

Delisting and Cancellation of Trading of BBGI Shares on the London Stock Exchange   Dated 20th May 2025

BBGI Shareholders are therefore strongly encouraged to accept the Offer prior to the Delisting Date in order to avoid holding illiquid BBGI Shares and/or BBGI Depository Interests and to ensure that they realise value for their BBGI Shares in cash at a premium pursuant to the terms of the Offer as described in the Offer Document.

Offer remains open for acceptance

As set out in the Offer Unconditional Announcement, BBGI Shareholders who have not yet accepted the Offer should note that the Offer will remain open for acceptance until further notice. Bidco will provide at least 14 days' notice by way of an announcement before the Offer is closed for acceptances. Once Bidco closes the Offer, BBGI Shareholders who have not accepted the Offer at that time will be unable to do so.

BBGI Shareholder helpline

If you have any questions about this announcement or are in any doubt as to how to accept the Offer, please contact the Depository and Receiving Agent, MUFG, by telephone on +44 (0) 371 664 0321 or by email at shareholderenquiries@cm.mpms.mufg.com. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. to 5.30 p.m. (London time), Monday to Friday, excluding public holidays in England and Wales. Please note that the Depository and Receiving Agent cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. The helpline cannot provide advice on the merits of the Offer, nor give any financial, legal or tax advice.

itm2

Thanks for all the feedback. Is there anything that I can sensibly do at this point to avoid the transfer out of our ISAs and SIPP and the associated tax implications?

I'm pretty miffed that Interactive Investor marked the "do nothing" option as the Default, when clearly it was not a good choice in view of the complications that I am now facing.

IanManc

itm2 said:

Thanks for all the feedback. Is there anything that I can sensibly do at this point to avoid the transfer out of our ISAs and SIPP and the associated tax implications?

I'm pretty miffed that Interactive Investor marked the "do nothing" option as the Default, when clearly it was not a good choice in view of the complications that I am now facing.

itm2 said:

Thanks for all the feedback. Is there anything that I can sensibly do at this point to avoid the transfer out of our ISAs and SIPP and the associated tax implications?

I'm pretty miffed that Interactive Investor marked the "do nothing" option as the Default, when clearly it was not a good choice in view of the complications that I am now facing.

It's marked as "default" to tell you that this is what will happen unless you do something.

You would have cause to be "miffed" if they hadn't told you.

Hoenir

itm2 said:

I'm pretty miffed that Interactive Investor marked the "do nothing" option as the Default, when clearly it was not a good choice in view of the complications that I am now facing.

Not their role to provide advice or indeed take action. Corporate actions are part and parcel of trading / investing in individual shares. 

From the Company RNS 23rd April 2025

In light of the above, BBGI Shareholders are therefore strongly encouraged to accept the Offer prior to the Unconditional Date, in order to avoid holding illiquid BBGI Shares and/or BBGI Depository Interests and to ensure that, if the Offer becomes or is declared Unconditional, they realise value for their BBGI Shares in cash at a premium pursuant to the Offer and under the proposed Offer timetable.

There's been sufficient warnings and time for investors to take action. 

masonic

itm2 said:

I'm pretty miffed that Interactive Investor marked the "do nothing" option as the Default, when clearly it was not a good choice in view of the complications that I am now facing.

It's not Interactive Investor's choice what would happen if you failed to act. They merely passed on information to the beneficial owners of shares in their custody. It is not for them to interfere in your relationship as a shareholder of the company.

The company provided shareholders the option to get out of the shares before they delisted. As discussed above, they gave a strong recommendation without actually forcing investors to sell, which would have been unfair to those who genuinely wanted to hang on to their shares, didn't think the offer was satisfactory, or were unable to be contacted. In situations like this, both parties often need to give an indication they agree to an action for it to happen. Unilateral changes are only imposed in limited circumstances when it is deemed necessary.

There are other situations where the "do nothing" option may not be in your best interests. For example, if a legal claim is filed against you. There are certain communications you should never ignore.

wmb194

itm2 said:

Thanks for all the feedback. Is there anything that I can sensibly do at this point to avoid the transfer out of our ISAs and SIPP and the associated tax implications?

I'm pretty miffed that Interactive Investor marked the "do nothing" option as the Default, when clearly it was not a good choice in view of the complications that I am now facing.

Did you read Hoenir's first post? You should point this out to your broker and see whether it can tender your shares.

It doesn't look like there have been any RNS' yet to say the offer is closed.

https://www.investegate.co.uk/company/BBGI

"Offer remains open for acceptance

As set out in the Offer Unconditional Announcement, BBGI Shareholders who have not yet accepted the Offer should note that the Offer will remain open for acceptance until further notice. Bidco will provide at least 14 days' notice by way of an announcement before the Offer is closed for acceptances. Once Bidco closes the Offer, BBGI Shareholders who have not accepted the Offer at that time will be unable to do so."

https://www.investegate.co.uk/announcement/rns/bbgi-global-infrastructure-s-a-npv-di---bbgi/offer-declared-unconditional/8888422