BSH Building Society Holdings

[Marilyn Munroe]

I am starting this thread as placeholder for the entity created from the merger of MARAC, Southern Cross Building Society, and CBS Canterbury.

Ticker symbol BSH and trading to commence on 31st January.

They say that history never repeats it only rhymes. Here is a history of small local banks that wanted to foot it with the big boys. Complete the riddle;

Countrywide Bank --> ANZ National
Trust Bank --> Westpac
Building Soc. Hldgs. --> ????


Boop boop de do

Marilyn

[whatsup]

M M, Post Bank = KiwiBank !

[kizame]

Well yes,they were bought by larger entities,they didn't go broke as far as I can remember anyway.
So I guess they either find their niche or hire some of the best bankers out there to expand.
Or likely some way down the track by which time we will all have had time to evaluate prospects or not,and will either sell out or be bought out.

If I remember rightly countrywide exploited the first home buyer market agressively,I know they got mine,don't remember much after that. Countrywide marketed their arses off.

[whatsup]

Well yes,they were bought by larger entities,they didn't go broke as far as I can remember anyway.
So I guess they either find their niche or hire some of the best bankers out there to expand.
Or likely some way down the track by which time we will all have had time to evaluate prospects or not,and will either sell out or be bought out.

If I remember rightly countrywide exploited the first home buyer market agressively,I know they got mine,don't remember much after that. Countrywide marketed their arses off.


IMHO the best small bank that N Z ever had, pitty the officers sold out to the Natty Bank.

[Penfold]

SBS would make a good fit for buying them. CBS should have looked at merging with SBS in the first place. Why you would want to climb into bed with a finance company when you are a co-op is beyond me. Those boys at CBS are going to get eaten alive.

[Marilyn Munroe]

CBS should have looked at merging with SBS in the first place. Why you would want to climb into bed with a finance company when you are a co-op is beyond me.

SBS is a mutual owned by the depositors. CBS was a shareholder owned company. SBS would not have been able to issue SBS shares to CBS shareholders. Probably the only way SBS could have taken over CBS was with a full cash offer.

Boop boop de do

Marilyn

[Marilyn Munroe]

Key figure in bank merger resigns

http://www.sharechat.co.nz/article/21675ae0/key-figure-in-bank-merger-resigns.html

Boop boop de do

Marilyn

[Balance]

Key figure in bank merger resigns

http://www.sharechat.co.nz/article/21675ae0/key-figure-in-bank-merger-resigns.html

Boop boop de do

Marilyn

Hardly a surprise!

[Marilyn Munroe]

Ex CBS Canterbury CEO ruminates on BSH and his own future;

http://www.interest.co.nz/news/ex-cbs-ceo-bryan-inch-quit-because-he-doesnt-have-desire-establish-national-branch-network-heartland

Boop boop de do

Marilyn

[percy]

Ex CBS Canterbury CEO ruminates on BSH and his own future;

http://www.interest.co.nz/news/ex-cbs-ceo-bryan-inch-quit-because-he-doesnt-have-desire-establish-national-branch-network-heartland

Boop boop de do

Marilyn
No surprises there.!!! MM Thanks for the link.

[SCOTTY]

Trading started today:

First trade 95c. Initial 15 minutes 66,791 traded at ave price of 89c

[percy]

Yesterday's announcement was a waste of time.Other than putting off distribution to PGC shareholders,nothing.Percy and the market were not impressed.

[percy]

Any fundies have a view?

From what little information there is available BSH @ 73c looks like an absolute bargain. However, I do expect the cash burn to get the three main parties (and possibly a fourth or fifth in the not too distant future ;) ) to be considerable as such mergers can be very expense down at the bricks and mortar layer of banking businesses and looking at cash flows (probably very negative) alone won't give anyone using such techniques a clear view as to the real value of BSH.

Big players will be looking to soak on a falling price but on these volumes many won't be that interested in picking up the small change (i.e. bending over to pick it up simply isn't worth their while. :) Small players will need to talk their conjules on both hands and ride the next 2 years out, catching the bullish rises as big events occur. TA'er will do what they always do (they are very predictable :) in this regard).

discl: hold & accumulating (against all TA advice :) )

Well I am sorry but I agree with you.Although things will take a little time,I am sure it will be successful.In the meantime there should be strong earnings from existing clients,in particular from MARAC.The spread of loans looks well balanced.Funding or funds should cost less in future.So the reasons for the merger look correct.When they have good earnings under their belt the market should/may/can/will rerate it and we will all look back and say "why didn't I buy more when they were trading below asset backing?"

[Contrarian]

Gidday
PGC are going to hand out the BSH shares to the PGC shareholders pro rata.

I think IMHO that may cause a small flood of shares for sale, BSH share price heads south ah la ALF ?

And/Or, is George Kerr going to then buy them back on market at 48 cents each at the depths of the double dip?

[percy]

Gidday
PGC are going to hand out the BSH shares to the PGC shareholders pro rata.

I think IMHO that may cause a small flood of shares for sale, BSH share price heads south ah la ALF ?

And/Or, is George Kerr going to then buy them back on market at 48 cents each at the depths of the double dip?
Yes,I am sure a lot of PGC shareholders will sell their free "gifted" BSH shares.I hope to be in the position to join belgarion, and a herd of hungry buyers,to do a community service and take them off their hands at prices Bernard Wimp would be proud of.

[kizame]

Yes,I am sure a lot of PGC shareholders will sell their free "gifted" BSH shares.I hope to be in the position to join belgarion, and a herd of hungry buyers,to do a community service and take them off their hands at prices Bernard Wimp would be proud of.

Except they are not exactly free gifted of course.Hopefully most will realize this.
The transfer of wealth between 2 companies,you would hope that most will wait to see a lift in price to put them in a more advantageous position than feed the eels.

Nice to see things a lot clearer now.

[percy]

Except they are not exactly free gifted of course.Hopefully most will realize this.
The transfer of wealth between 2 companies,you would hope that most will wait to see a lift in price to put them in a more advantageous position than feed the eels.

Nice to see things a lot clearer now.

In The Press this morning [may be on stuff] shares to be distributed late May.I agree it is nice to see things a lot clearer now.More details of PGC's plans to expand its Australasian wealth management business were likely to be released around the time of PGC's half-year result towards the end of the month.
It is on stuff website.

[RazorX]

Would someone be able to tell me how this allocation of shares from PGC to BSH is supposed to work? If I have say 100 shares in PGC, do I lose them and get 100 in BSH? or keep part of PGC and get some in BSH or what? I can't seem to figure out how this works.

Thanks

[macduffy]

It seems you'll keep your PGC shares but it will be difficult to put a value on them once the Marac assets and PGG Wrightson shares have been hived off or sold.

It's a work in progress!

[percy]

Would someone be able to tell me how this allocation of shares from PGC to BSH is supposed to work? If I have say 100 shares in PGC, do I lose them and get 100 in BSH? or keep part of PGC and get some in BSH or what? I can't seem to figure out how this works.

Thanks
for 100 PGC shares you should receive 25 to 26.5 BSH shares.You retain your 100 pgc shares,so end up with 100 pgc and 25 or 26.5 BSH shares as well.
I know you do your research,so just take your time with it. Kerr made his money with funds management,and a lot of people backed him with the recap of PGC, and he had no trouble raising big money for torchlight fund in record time.As macduffy said it is a work in progress.I do not have any answers,but am watching closely.

[ETC]

I think I read somewhere that PGC might do a share consolidation similar to Nuplex. Will look for the article.

[percy]

I think I read somewhere that PGC might do a share consolidation similar to Nuplex. Will look for the article.

I think Scottie posted the link on PGC thread.Scottie has posted a lot of very good posts on PGC thread which I have found a great help in trying to sort out NTA for PGC and BSH.

[Xerof]

Is 88 cents the 'magic' number that will be used in disbursement of these shares by PGC or will it be based on a VWAP at the time?

[percy]

Is 88 cents the 'magic' number that will be used in disbursement of these shares by PGC or will it be based on a VWAP at the time?

No.The numbers are as follows.300mil BSH shares.PGC own 72.21%ie 216.63mil.PGC have 803.94mil shares on issue.So divide 216.63 by 803.94 gives you 26.94.
This is inline with other posts that a share holder of PGC will receive 25 to 26.5 BSH share for each 100 PGC shares owned at the yet to be announced cut off date.

[SCOTTY]

Is 88 cents the 'magic' number that will be used in disbursement of these shares by PGC or will it be based on a VWAP at the time?

88c is the NTA of the BSHL shares. If PGC get a satisfactory sale for their PGW stake there will be no placement of the 72.2% (just over 216 mil) BSHL shares owned by PGC. These shares would then be distributed to the PGC shareholders: ie 216 mil divided by 808 mil = .267 of a BSHL share (267 BSHL shares per 1000 PGC shares).

As Percy says, have a look at the PGC thread.

[Xerof]

OK, thanks (I should have done my homework)

explains why PGC shares remain offered then - it's the only way for them to exit BSH at the moment..... 10 to 15% down already

No doubt this will be on the basis that no way should a finance coy in this market be valued at NTA

[percy]

OK, thanks (I should have done my homework)

explains why PGC shares remain offered then - it's the only way for them to exit BSH at the moment..... 10 to 15% down already

No doubt this will be on the basis that no way should a finance coy in this market be valued at NTA

Sorry xerof,but we are all trying to do homework on PGC after the BSH distribution.My own changeable view is lack on news has seen weakness in both shares.I see BSH ,once it has a bank licence,a couple of good result,trading at 2 or 3 times the 88cents NTA.PGC,with Kerr running a "hot shot" Australasian funds management could be a real flier.I do not see a lot of down side in either,but huge upside in both.However it is early days so you have to figure your own level of risk.

[percy]

It is easy to see why wise heads like belgarion like the sharemarket.Seen it all before,and like money for jam. Easy.!

[Balance]

Any fundies have a view?

From what little information there is available BSH @ 73c looks like an absolute bargain. However, I do expect the cash burn to get the three main parties (and possibly a fourth or fifth in the not too distant future ;) ) to be considerable as such mergers can be very expense down at the bricks and mortar layer of banking businesses and looking at cash flows (probably very negative) alone won't give anyone using such techniques a clear view as to the real value of BSH.

Big players will be looking to soak on a falling price but on these volumes many won't be that interested in picking up the small change (i.e. bending over to pick it up simply isn't worth their while. :) Small players will need to talk their conjules on both hands and ride the next 2 years out, catching the bullish rises as big events occur. TA'er will do what they always do (they are very predictable :) in this regard).

discl: hold & accumulating (against all TA advice :) )

Belg-me-ole-mate, you pick this one well! 'Helped' some desperate ex-building society shareholder off their BSH shares at 73 cents?

Fundies are now desperate for stock as there is not going to be a placement of shares to them via PGC.

Looking to sell to them at $1.00?

[mikew]

Looking to sell to them at $1.00?


I Picked up some at 73c, won’t sell them until they become a bank:)

[Xerof]

won’t sell them until they become a bank

why would you sell them then? thats the only time I would begin to look at buying them.....until then, they are a finance company with some bolt-on residential mortgages (presuming thats what the BS assets are)

[Balance]

Nope. Haven't held a bank for quite a while and made heaps out of the b.s. privatisations in the UK in the 90s. The secret was to just hold until the value became clearly recognisable. Sure you could trade them but keeping up with announcements (and the sp girations) was full time job and I already had one of those which I really enjoyed. ;)

Finance Company vs. Bank? Actually I don't really care but would prefer a Bank. Even if they stay a Fin Coy for a while they'll be in a pretty empty market given what's transpired in NZ in the last 5 years. Also, the opportunity to grow as a FinCoy is only slightly less given the synergies to grow by M&A.

Remember Trust Bank?

Slammed down by the market and by investors after IPO. Fell like a brick from IPO price of $1.80 to a low (from memory) of $1.10 as building society shareholders sold out. Went back up to $2.00 reasonably quickly after its first full year results, and then was snapped up by Westpac for $2.40.

Those who took Westpac shares in lieu of cash are still laughing.

Sadly, NZ investors will never learn from history.

[percy]

Remember Trust Bank?


Those who took Westpac shares in lieu of cash are still laughing.

Sadly, NZ investors will never learn from history.

Nice that those good boys Balance and Belgarion know their history.Learning it has made them wealthy,happy and wise.!!

[mikew]

why would you sell them then? thats the only time I would begin to look at buying


I will sell them to you if you want when they become bank:)

[percy]

Percy, Geez you make me sound ancient. :) ... I'm late 40s and Balance is even younger (if memory serves) ... :)

Those who do not study history are doomed to repeat it., Socrates/Plato(?)

Wise heads on young shoulders.!!!!

[SCOTTY]

Belg-me-ole-mate, you pick this one well! 'Helped' some desperate ex-building society shareholder off their BSH shares at 73 cents?

Fundies are now desperate for stock as there is not going to be a placement of shares to them via PGC.

Looking to sell to them at $1.00?

Hope I am still holding them when they are a successfull BANK and trading strongly at $3+ !! (how do you put in those smiley faces?)

[Balance]

Wise heads on young shoulders.!!!!

History repeats itself. That adage is truth to the core when it comes to the NZ share market.

Remember Countrywide Building Society?

Same story as Trust Bank and now, BSH?

[winner69]

I wonder what Bill was really saying the other day ... I assume that the Combined Building Society mentioned is relevant to thsi thread ... my apogies if not

http://www.scoop.co.nz/stories/PO1104/S00130/guyon-espiner-interviews-finance-minister-bill-english.htm

GUYON It doesn’t seem to be so unique nowadays, though, does it? I mean, it’s the same case with the finance companies – people chasing the high returns and the riskier investments get bailed out by the responsible people who did the safe thing.

BILL And those responsible people I think have every right to be concerned, and Government is just weighing up the less-worse option. In the case of the finance companies, it was the potential destruction of our financial system, and that’s been hugely expensive for countries like Ireland where that’s happened. In the case of AMI, it’s been people sitting in their severely damaged houses who bought insurance in good faith. So I think the politicians have got a clear message from taxpayers that this is not something they want to do if at all avoidable.

GUYON So why are we still doing it? In terms of the finance companies, I understand that we needed to guarantee the financial system, but why is it now that we still have four finance companies with exposure of $1.7 billion being accepted into a scheme as late as January 5 this year? Why are we still guaranteeing those finance companies well after the actual acute financial crisis is over?

BILL Well, there’s long lag times here, so we have the finance— the first deposit guarantee back in 2008. There was over 70 or 80 institutions in that guarantee. We’re now—

GUYON We know the history, but, Mr English, why are we still letting companies into this scheme?

BILL Well, we’re down to four or five companies now.

GUYON With exposure of 1.7 billion—

BILL That’s right.

GUYON …there won’t be a lot of appetite for the public to bail that out, will there?

BILL That’s right. It’s still not ideal. Bear in mind these companies were covered by the previous guarantee. When we’d been making these decisions on the way through, the focus has been on maintaining these companies so that they can work their way out of any issues they might have. Because the alternative to the guarantee— the only reason the guarantee’s there, cos the alternative’s worse, which would be the automatic collapse of those companies.

GUYON So is that the case for these four companies – Fisher & Paykel Finance, PGG Wrightson, the Wairarapa Building Society and Combined Building Society? I mean, without this guarantee, are they toast?

BILL Well, there’s certainly been times in the past when that was possible, where without the guarantee, their depositors could’ve just taken their money and run.

GUYON Isn’t this the idea of capitalism? I mean, I can understand when there was going to be a run-on at the banks, you have to do it. You did do it, Labour did it, you agreed it with it – fine. But why are we doing it now?

BILL Because we’ve seen it as the most prudent way of managing the guarantee out of the system. Bear in mind that in most other countries there’s deposit guarantees that apply all the time, such as Australia . Depositors there in their banks are covered by a guarantee at all times. We’ll be one of the few countries that’s actually found a way to work our way out of these kind of deposit guarantees that create obligations for taxpayers, and we will work our way out of it by the end of this year.

[Lizard]

Yes, it's an interesting one... depositors in even the "best" of these must now be withdrawing funds as they mature and waiting to see whether the companies survive the end of the GG period. I looked at FPA finance a while back and came to the conclusion that they were on track to be able to get through the post-guarantee period by rolling over to mostly bank funding... however, the next time I looked (last result), it was looking a bit less certain - can't recall the details, but seemed they were drawing on the bank funding faster than I'd expected and the gap between finance assets and liabilities had narrowed. Also looked as though appliances was counting on a decent div from finance as well.

However, to me, CBS looks in a more difficult position as far more heavily reliant on retail deposits and, as I read it, at least 85% of liabilities probably falling into current (interestingly, not classified between current and non-current on the balance sheet released, so have to go to the bottom of the risk-management section and trawl through liquidity risk). Less than 30% of loan receivables look to be current, so there is a looming mismatch. While there is some access to bank funding to cover this, it does not look sufficient as at time of 5 Jan accounts. In normal circumstances, it would not be too concerning as could rely on a majority of deposits to roll over.... but very hard to guess the level of deposits likely to be rolled over and I think it risks being a case of everyone moving to the sidelines and waiting to see if it survives.

Of course, no doubt CBS are well aware of the risks and have plans in place to do everything necessary to get through the post-GG blip - have not really looked at the possibilities or actions being taken there and I'm sure there are plenty.

[Xerof]

You're on to it Liz - great insight which the blue eyed brigade don't want to acknowledge

[percy]

At the last meeting chairman Irvine and CEO Greenslade spoke of depositor history of renewals/rollovers.The building society's had a lot higher rollovers than Marac .

[Xerof]

Retention rates mean nothing when you have a GG - the acid test will be when the rug gets pulled in December - history means nothing under such a distortion of risk dynamics

And in any event, the debenture model seems to be a relic of the past

[Balance]

At the last meeting chairman Irvine and CEO Greenslade spoke of depositor history of renewals/rollovers.The building society's had a lot higher rollovers than Marac .

2 tracks ahead for BSH :

1. It becomes a bank. The game changes with RBNZ supervision and credibility as a bank.

2. It does not become a bank. IMO, it then becomes a takeover target for a new new bank looking to set up in NZ.

[geezy]

didnt see anyone post this, so i might as well share it. :)

PGC
13/04/2011 17:08
GENERAL

REL: 1708 HRS Pyne Gould Corporation Limited

GENERAL: PGC: PGC Announces Details of BSHL Share Distribution

NZX Release
PGC Announces Details of BSHL Share Distribution
13 April 2011

Pyne Gould Corporation Limited (PGC) today announced provisional details of a
planned in specie distribution of its 72.21% shareholding in Building Society
Holdings Limited (BSH) - a
move that is expected to pave the way for BSH entering into the NZX50 index.

Initial Court Orders have now been obtained in respect of the proposed pro
rata distribution, via a scheme of arrangement, of BSH shares to PGC
shareholders.

Documentation is now being finalised, and is expected to be distributed
following the closing
of the partial takeover offer made by Agria (Singapore) Pte Ltd for PGG
Wrightson. Agria's
offer is set to close on the 23rd of April.
Based on there being 216,630,283 BSH shares to be distributed amongst PGC
shareholders
(and there being 808,319,571 PGC shares) the d
istribution, if implemented,
will mean that:

- Each PGC shareholder will receive approximately 268 BSH shares for every
1000 PGC
shares held at the "Record Date".

- In consideration for that distribution, approximately 73.2% of the PGC
shares held by each PGC shareholder at the "Record Date" will be cancelled.
This means that of the total 808,319,571 PGC shares, approximately
591,567,312 will be cancelled. As the
cancellation applies to all PGC shareholders in the same way, it will have no
effect on each shareholder's proportionate interest in PGC (subject to
rounding).

The proportion of PGC shares to be cancelled was set so that the market value
of PGC shares
to be cancelled approximated the market value of the BSH shares to be
distributed (based
on the quoted market prices for PGC shares ($0.26 per share) and BSH shares
($0.71 per share) at the "Determination Time", being 5:00pm on 8 April 2011).

Following this distribution and cancellation, a PGC shareholder will hold
approxima
tely 268
BSH shares and 268 PGC shares for every 1000 PGC shares previously held.
The currently anticipated timetable is:
- Agria offer closes - 23 April
- Shareholder materials mailed out - 2 May 2011
- PGC shareholder meeting - 18 May 2011
- Record Date for determining entitlements under the Distribution - 27 May
2011.
- Distribution of BSH shares and cancellation of PGC shares - 30 May 2011
These dates are indicative only, and may change.
Distribution is an important step in giving effect to PGC's strategy to
return value to its
shareholders. It will benefit PGC shareholders by:
- resulting in the expected inclusion of BSH in the NZX50 index, as a result
of BSH shares being held by a broader range of investors than would otherwise
be the case had PGC remained as a dominant shareholder (PGC's shareholding is
currently disregarded by NZX for indexation purposes) although it is likely
that PGC will in time be removed from the NZX50 following the distribution
because it will not meet
the
free float capitalisation threshold for inclusion in the NZX50 index;
- encouraging broader institutional investor interest in BSH shares, and
therefore
improving institutional representation on the BSH share register, as a result
of
gaining entry into the NZX50 index; and
- increasing the frequency and volume of trading in BSH shares, due to BSH
having a
more diverse shareholder base, which should promote price discovery and help
reduce pricing anomalies which can occur in less liquid stocks.

Background
The merger of the financial services businesses of MARAC Finance Limited,
Southern Cross
Building Society and Canterbury Building Society was successfully completed
on 7 January 2011 and BSH (the parent of the new Heartland financial services
group) was listed on the
NZSX on 1 February 2011.

Following completion of the Merger, the PGC Group holds a 72.21% stake in
BSH.
Earlier this week BSH released its opening financial position as at 7 January
2011 confirming
the company had n
et tangible assets of 88c per share.
- Ends -

For further information contact:

Michael Jonas
General Counsel
Pyne Gould Corporation
DDI 09 927 9111
Mobile 029 770 0181
End CA:00208003 For:PGC Type:GENERAL Time:2011-04-13 17:08:50

[winner69]

Geezy - can u summarise in one sentence?

[geezy]

For every 1000 PGC shares you hold, you will only end up with 268 BSH shares and 268 PGC shares at the end of the date. I m not so sure which it meant by the record date. It looks like it says its 27th May, which could be why PGC climb to .30 cents. but that would be unfair to previous share holders. (who cares about them anyway right)

[corlemar]

Can anyone explain to me the following....... if as has been outlined approx 268 shares are rec'd in BSH and PGC per original 1,000 shares in PGC - How does this benefit current shareholders if for example shareholder has 10,000
I calculate that they are currently worth $3k @30c
Post demerger they would be worth at todays sp as follows:-
PGC 2680 @30c = $804
BSH 2680 @70c = $1,876 TOTAL $2,680

Am i missing something ?

[mikew]

Can anyone explain to me the following....... if as has been outlined approx 268 shares are rec'd in BSH and PGC per original 1,000 shares in PGC - How does this benefit current shareholders if for example shareholder has 10,000
I calculate that they are currently worth $3k @30c
Post demerger they would be worth at todays sp as follows:-
PGC 2680 @30c = $804
BSH 2680 @70c = $1,876 TOTAL $2,680

Am i missing something ?

Basically you are right, but it will be more accurate if you use sp after BSH distribution finish.

[winner69]

Basically you are right, but it will be more accurate if you use sp after BSH distribution finish.

Geezy's one line summary missed one important point .... 73% of PGC shares will be cancelled which should in theory see an adjustment in the PGC shareprice to reflect the lower number of share .... if not you are down the gurgler big time eh

[corlemar]

Geezy's one line summary missed one important point .... 73% of PGC shares will be cancelled which should in theory see an adjustment in the PGC shareprice to reflect the lower number of share .... if not you are down the gurgler big time eh

I don't think that's quite right.....had PGC decided that shareholders maintain their entire shareholding in addition to receiving 268 BSH for every 1,000 then yes you would see the sp reduce by some 72/73%. Though what they are doin I suspect, is reducing the shares in issue by some 585million. sp should in theory stay the same, but make this method i guess makes it more tradeable/appealing as opposed to a 5-7c sp had they maintained 800million shares in issue

[percy]

Geezy's one line summary missed one important point .... 73% of PGC shares will be cancelled which should in theory see an adjustment in the PGC shareprice to reflect the lower number of share .... if not you are down the gurgler big time eh

Percy will be waiting at the gurgler entrance with his cheque book at the ready.!!!

[geezy]

Due to my limited understanding of this arrangement, here is my calculation of the matter ,

Winner, i thought that i stated that for every 1000 pgc shares ,you will only end up with 268 BSH and 268 pgc shares, that should be equivalent to the 72% cancellation , no? Please correct me if i m wrong.


Here we go:
100,000 PGC shares @ 0.26, Determination Date = NZD26,000
Post distribution
100,000/1000 *268 *0.70 ( BSH ) = $18,760
100,000/1000 *268 *0.26 ( PGC ) = $6,968
Total = $18,760+$6968= $25,728

Sounds about right?

PS: PGC holder since the Rights issue and now in alot of pain.

[geezy]

I bought in view of benefiting from this distribution but it seems that the record date is still open and people could participate by just entering at the current SP. Very pathetic IMO and i dont feel special at all :(

[corlemar]

Due to my limited understanding of this arrangement, here is my calculation of the matter ,

Winner, i thought that i stated that for every 1000 pgc shares ,you will only end up with 268 BSH and 268 pgc shares, that should be equivalent to the 72% cancellation , no? Please correct me if i m wrong.


Here we go:
100,000 PGC shares @ 0.26, Determination Date = NZD26,000
Post distribution
100,000/1000 *268 *0.70 ( BSH ) = $18,760
100,000/1000 *268 *0.26 ( PGC ) = $6,968
Total = $18,760+$6968= $25,728

Sounds about right?

PS: PGC holder since the Rights issue and now in alot of pain.

Yup, you're on the money with your calculation geezy

[ETC]

The announcement doesn't mention anything about what they'll do with the remaining PGW shares they don't sell to Agria. I wonder if they'll distribute those to PGC shareholders as well?

[percy]

The announcement doesn't mention anything about what they'll do with the remaining PGW shares they don't sell to Agria. I wonder if they'll distribute those to PGC shareholders as well?

Be interesting if they did.No one has looked at the NTA that PGC will have at the end of the day.Be interested to see if any one agrees with me that it will be over a $1 per share.!!!
I would appreciate SCOTTY or Balance's view.

[ETC]

Hey Percy, I'm not sure what the NTA for PGC will be once everythings done and dusted, but the PGW assests divided into the reduced PGC shares look to be 38c a share.

Here's the math:

PGC owns 18.3% of PGW thats a 138 711 372 shares @ 60c or $83 226 823 divided this into the reduced number of PGC shares 215 821 325 and you get 38c a share.

[Lizard]

Hi, Yes tend to agree with above. NTA per "new" PGC share would be about 95cps, with 38cps of PGW shares/cash. But currently, at 31cps for PGC shares and 70cps for BSH, the market is valuing the reconstructed PGC at about 45.6cps - i.e. =(31-70*.268)/.268.

On revenues/profits from continuing ops and cash from PGW (assuming able to be sold in full at Agria equivalent price), I think worth around 60cps, but lots of uncertainty around that figure - fee revenue has fallen dramatically in first half and hard to get a feel for ongoing returns from the likes of Torchlight and the property management arm. Reads to me like the property management side might have a few risky bits to it.

One thing that I did not get is why the distribution of BSH shares was waiting on the Agria bid going unconditional? Also, given that they are intending to distribute all the BSH shares, why do they then mention the possibility of using excess cash from sale of PGW shares to provide equity assistance to BSHL? If they want to separate out, why get back in? Is it just easier to inject new equity if they are not a majority holder or does it mean they are free to negotiate a better price for providing assistance without impairing the value of their existing holding?

[SCOTTY]

Be interesting if they did.No one has looked at the NTA that PGC will have at the end of the day.Be interested to see if any one agrees with me that it will be over a $1 per share.!!!
I would appreciate SCOTTY or Balance's view.

Hi Percy

This should really be on the PGC site. However the way I see it is this:

According to the Direct Broking site, the current nta of PGC is 48.71c. The nta of BSH is 88c (yes I know that they are trading at 70c but this is at a discount to the nta of 88c). Each PGC share ownes .268 of a BSH share = 23.58c of the PGC nta. Take this 23.58c off the 48.71c = 25.13c nta in PGC after taking out the BSH shareholding. This 25.13c includes all the residual assets in PGC including the PGW shareholding (which I would assume to be valued on the basis of 60c ). After the BSH distribution the PGC shares will be consolidated @ 1:3.73. = 25.13c x 3.73 = 93.73 cps as the then NTA for the new consolidated PGC shares. This is only my calculation so I could very well be wrong.

Regards

[Lizard]

Hi Scotty,

It looks pretty close, but the PGC accounts were pre-BSH, so include 100% of MAR, whereas BSH is only part MAR, with CBS and SCBS thrown in (and a bit of new goodwill, though that won't affect NTA). So using BSH nta is not necessarily an accurate substitute for the MAR part of PGC - although probably works out close enough since the deal was most likely founded around the respective NAV's of the components.

Anyway, 93.7cps, 95cps and $1 are probably all close enough for us to know where ballpark is, so that is a start.

[percy]

Thanks for the replys Scotty and Lizard.Have gone to PGC thread.

[SCOTTY]

Hi Scotty,

It looks pretty close, but the PGC accounts were pre-BSH, so include 100% of MAR, whereas BSH is only part MAR, with CBS and SCBS thrown in (and a bit of new goodwill, though that won't affect NTA). So using BSH nta is not necessarily an accurate substitute for the MAR part of PGC - although probably works out close enough since the deal was most likely founded around the respective NAV's of the components.

Anyway, 93.7cps, 95cps and $1 are probably all close enough for us to know where ballpark is, so that is a start.

Hi Lizard

Not that it matters much, but in the opening BHL Financial statements, the nta of 88c was confirmed.

Just hope that in the not too distant future, both entities (BHL & PGC) trade at a good premium to nta as historically you would expect from banks and financial institutions.

Regards

[percy]

A whole lot of index funds will need to pick up BSH shares as they'll be in the NZ50 ... I've got that right? ... And if they pick up PGF it'll be a certainty.

I think it is even without PGWF.

[winner69]

As ratkin (I think) would say the train has left the station .... are you aboard?

[percy]

As ratkin (I think) would say the train has left the station .... are you aboard?

I have pre booked on the day-time flier leaving the station on 30th may.Note bookings close on 27th may at PGC.
Toot Toot.

[winner69]

Forbar's John Cairns one a report on BSH ... mentions 'tough going' and 'cautious' and still reckons it should trade at NTA and gives BSH an 'accumuate' .... words like that normally mean sell but whoops I forgot Cairns has strong allegiences to PGC so not really an independent report is it .... but good on Forbar trying to raise interest in buying shares in a BANK ... good one

Even with his (optimistic rose tinted glass) forecasts pojecting a return on equity of 5% in 2012 one might still need to get on that train eh percy ... its not about the numbers is it ... its all about the hype .... becoming a bank ... joining the NZX ... all signs of success and increasing share prices ... join in the fun but watch those charts

ROE of 5% ,,, whats the equivalent for those banks that trade at 4 times NTA which seem to be the benchmark for valuing BSH

[winner69]

Love this comment from a NBR subscriber as a comment to the their article about Forbars rave on BSH -

Heartless banksters rehashed failing business model (it's now called a bank you know!) gets cautious approval from their own business associates, Forsyth barr...