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  1. #2481
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    Quote Originally Posted by glennj View Post
    FWIW today my full service broker revealed that there is strong interest from those that tendered their stock into the Global Valar offer to buy back in to RBD.
    I wonder what price those happy to buy back in will be happy to pay though? Blackcap has stated up to $8.50. A full service broker will add another 12c or so to that for brokerage. But the indicative price may have already gone above that level. I guess those that also hold ATM shares in their portfolio will buy back in at any price?

    SNOOPY
    Last edited by Snoopy; 20-03-2019 at 10:35 PM.
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  2. #2482
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    Quote Originally Posted by Snoopy View Post
    Dividends paid in the financial years below were as follows:

    FY2014:: 9.5c, 6.5c
    FY2015:: 10.0c, 7,5c
    FY2016:: 11.5c, 8,5c
    FY2017:: 12.5c, 9,5c
    FY2018:: 13.5c, 10,5c
    HY2019: 18.0c


    The average annual dividend 20.6 cps fully imputed. 20.6c is equivalent to a gross yield of :
    20.6c / (1-0.28) = 30.0c.

    Current term deposit rates are around 3.5%. I would want a return two percentage points better than this to allow for the greater income volatility risk of share such as this. So my January 2019 valuation for RBD is:

    30.0 / 0.055 = $5.45

    This valuation is strictly from an 'income' perspective. With the share trading at $7.60 just prior to the 'Global Valar SI' takeover offer, this shows that there was a considerable growth premium built into the share price before the Mexicans came along. At an offer price of $8.90, there is now a huge growth premium built in. A premium I would suggest that can only be satisfied with a sustained push into Pacific rim markets.
    I suspect that valuing RBD on an historical capitalised dividend valuation basis will not be realistic going forwards. Global Valar has got plans for growth. KFC / Pizza Hut concept owner YUM Brands is committed carrying out a sell down of almost all company owned restaurants, to their global franchisees, including the likes of Restaurant Brands, by the end of the calendar year just finished. (the remaining 2% of company owned restaurants on the books in December 2016 not yet sold would be sold down in due course).

    Nevertheless, we can regard a capitalised dividend valuation as a 'base case' for a valuation. A middle of cycle business case valuation of $5.45, using my rule of thumb, gives a peak of cycle valuation 20% higher. That means $6.45. This is my target value for topping up my residual RBD holding in the future. That may sound far fetched.in today's heady price environment. But remember the cash issue price for the 26th October 2016 was just $5.15. And that was only two and one half years ago.

    SNOOPY
    Last edited by Snoopy; 21-03-2019 at 09:23 AM.
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  3. #2483
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    Today is the last day to accept the Global Valar offer.
    When do we get our money? The takeover booklet isn't exactly clear.
    When will I be paid if I accept the Offer?
    3.5 If you accept the Offer, Global Valar will not pay you for any Restaurant Brands Shares to be acquired from you under the Offer until the Offer has closed.
    As noted above, the closing date is 12 March 2019, being 60 working days after the date of the Offer.
    Of course, the offer date was extended to 26th March 2019.
    I'm assuming we get our money by end of today or tomorrow?
    Strange how they say "Global Valar will not pay you for any Restaurant Brands Shares to be acquired from you under the Offer until the Offer has closed"
    It'd be clearer if they said "Global Valar will pay you ..."

  4. #2484
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    I think 5 working days after close, if unconditional which it is. Can't recall where I saw that though.

  5. #2485
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    Quote Originally Posted by JayRiggs View Post
    Today is the last day to accept the Global Valar offer.
    Global Valar has announced to the market this morning, the day after the offer closed, that 91.32% of shares have been tendered. The Global Valar offer is for 75% of all shares. So those who have tendered their shares will not have all of them accepted.

    75 / 91.32 = 0.8213

    This means that for each parcel of 1000 shares submitted, 821 will be accepted. That's how I see the maths working out anyway, Having said that I am not sure what might happen if you owned 1000 shares and submitted only 821 into the offer. Would all 821 be accepted in that instance?

    SNOOPY
    Last edited by Snoopy; 27-03-2019 at 08:17 AM.
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  6. #2486
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    Quote Originally Posted by Snoopy View Post
    Global Valar has announced to the market this morning, the day after the offer closed, that 91.32% of shares have been tendered. The Global Valar offer is for 75% of all shares. So those who have tendered their shares will not have all of them accepted.

    75 / 91.32 = 0.8213

    This means that for each parcel of 1000 shares submitted, 821 will be accepted. That's how I see the maths working out anyway, Having said that I am not sure what might happen if you owned 1000 shares and submitted only 821 into the offer. Would all 821 be accepted in that instance?

    SNOOPY
    That would not be fair on those who submitted 100% of their holding?

    There may be a lot of very small shareholders left. I wonder if there will be a scheme to sell remnant holdings.
    Last edited by Bjauck; 27-03-2019 at 09:05 AM.

  7. #2487
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    Quote Originally Posted by Bjauck View Post
    That would not be fair on those who submitted 100% of their holding?
    This isn't about fairness Bjauck, What we are talking about here is the strict application of the law!

    Section 4 in the offer document talks about the 'Scaling of Acceptances'.

    ---------

    (a) the Offeror must take up from each Acceptor the lesser of:

    (i) the number of that Acceptor's Shares that represents the Specified Percentage of shares held by that acceptor, and
    (ii) the number of Shares in respect of which the acceptor has accepted the offer, and

    (b) If the number of Shares that the Offeror takes up under clause 4.2(a) is less than the Specified Number, then the offeror must take up from the Surplus Acceptor, Shares which bear the same proportion to the Acceptor's Surplus Shares, as the balance of the Shares required by the Offeror to acquire the specified number bears to the total of all Surplus Shares.

    --------

    The 'Specified Percentage of shares held by that acceptor' is not the same as the number of shares submitted to the offer! My interpretation then is that our holder of 1000 shares who submits 821 for acceptance will get 750 of those accepted in step (a), leaving 821-750=71 in 'the surplus asking to be accepted' pool.

    At the end of step (a), Global Valar should have 75% of 82.13% of shares , or 61.60% of shares tied up. This is short of the 75% target with another:

    75% - 61.60% = 13.40%

    of the total shares still on issue to be acquired to fulfill the takeover offer. However not all issued shares have been offered up to Global Valar:

    100% - 92.13% = 7.87% of shares 'are off the table'.

    The number of shares that are still 'on the table' are: 100% - 61.60% -7.87% = 30.53% of all shares.

    The 13.40 'percentage points' of shares needed to make up the offer represents:

    13.40 / 30.53 = 43.89% of that 'surplus asking to be accepted' pooll.

    Our tenderer of 821 and owner of 1000 shares can therefore expect 43.89% of his 'surplus tendered shares' to be accepted as a 'bonus acceptance add on',

    0.4389 x 71 = 31 shares.

    So total shares accepted out of the 821 tendered should be:

    750 + 31 = 781

    This kind of ties in with what my broker told me what happens with index funds, His story was that they would submit just 75% of their index find shares into the offer (knowing thew offer was for 75% of all shares), expecting them all to be accepted. Not sure my broker is right on this issue. But it does tie in with the 'strict interpretation of the law' above.

    SNOOPY
    Last edited by Snoopy; 27-03-2019 at 09:04 PM.
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  8. #2488
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    Default If all your shares are submitted, how many will you have left?

    Quote Originally Posted by Snoopy View Post

    Section 4 in the offer document talks about the 'Scaling of Acceptances'.

    ---------

    (a) the Offeror must take up from each Acceptor the lesser of:

    (i) the number of that Acceptor's Shares that represents the Specified Percentage of shares held by that acceptor, and
    (ii) the number of Shares in respect of which the acceptor has accepted the offer, and

    (b) If the number of Shares that the Offeror takes up under clause 4.2(a) is less than the Specified Number, then the offeror must take up from the Surplus Acceptor, Shares which bear the same proportion to the Acceptor's Surplus Shares, as the balance of the Shares required by the Offeror to acquire the specified number of shares to the total of all Surplus Shares.

    --------

    The 'Specified Percentage of shares held by that acceptor' is not the same as the number of shares submitted to the offer! My interpretation then is that our holder of 1000 shares who submits 821 for acceptance will get 750 of those accepted in step (a), leaving 821-750=71 in 'the surplus asking to be accepted' pool.

    At the end of step (a), Global Valar should have 75% of 82.13% of shares , or 61.60% of shares tied up. This is short of the 75% target with another:

    75% - 61.60% = 13.40%

    of the total shares still on issue to be acquired to fulfill the takeover offer. However not all issued shares have been offered up to Global Valar:

    100% - 92,13% = 7.87% of shares 'are off the table'.

    The number of shares that are still 'on the table' are: 100% - 61.60% -7.87% = 30.53% of all shares.

    The 13.40 'percentage points' of shares needed to make up the offer represents:

    13.4 / 30.53 = 43.89% of that 'surplus asking to be accepted' pooll.

    Our tenderer of 821 and owner of 1000 shares can therefore expect 43.89% of his 'surplus tendered shares' to be accepted as a 'bonus acceptance add on',

    0.4389 x 71 = 31 shares.

    So total shares accepted out of the 821 tendered should be:

    750 + 31 = 781

    Section 4 in the offer document talks about the 'Scaling of Acceptances'.

    ---------

    (a) the Offeror must take up from each Acceptor the lesser of:

    (i) the number of that Acceptor's Shares that represents the Specified Percentage of shares held by that acceptor, and
    (ii) the number of Shares in respect of which the acceptor has accepted the offer, and

    (b) If the number of Shares that the Offeror takes up under clause 4.2(a) is less than the Specified Number, then the offeror must take up from the Surplus Acceptor, Shares which bear the same proportion to the Acceptor's Surplus Shares, as the balance of the Shares required by the Offeror to acquire the specified number of shares to the total of all Surplus Shares.

    --------

    The 'Specified Percentage of shares held by that acceptor' is not the same as the number of shares submitted to the offer! My interpretation then is that our holder of 1000 shares who submits 1000 for acceptance will get 750 of those accepted in step (a), leaving 1000-750=250 in 'the surplus asking to be accepted' pool.

    At the end of step (a), Global Valar should have 75% of 82.13% of shares, or 61.60% of shares tied up. This is short of the 75% target with another:

    75% - 61.60% = 13.40%

    of the total shares still on issue to be acquired to fulfill the takeover offer. However not all issued shares have been offered up to Global Valar:

    100% - 92,13% = 7.87% of shares 'are off the table'.

    The number of shares that are still 'on the table' are: 100% - 61.60% -7.87% = 30.53% of all shares.

    The 13.40 'percentage points' of shares needed to make up the offer represents:

    13.40 / 30.53 = 43.89% of that 'surplus asking to be accepted' pool.

    Our tenderer of 1000 shares can therefore expect 43.89% of his 'surplus tendered shares' to be accepted as a 'bonus acceptance add on',

    0.4389 x 250 = 110 shares.

    So total shares accepted out of the 1000 tendered should be:

    750 + 110 = 860

    Put another way, however many shares you put into the offer, if it was your whole holding, then you should have 14% of those 'prior total shares' left, once the offer is concluded. I think my maths and legal interpretation is right. But am happy to be corrected.

    SNOOPY
    Last edited by Snoopy; 16-04-2019 at 08:30 AM.
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  9. #2489
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    Thanks for your reply and calculations Snoopy. I realise bringing up an undetermined notion of “fairness” was naive!

  10. #2490
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    Quote Originally Posted by Bjauck View Post
    That would not be fair on those who submitted 100% of their holding?

    There may be a lot of very small shareholders left. I wonder if there will be a scheme to sell remnant holdings.
    The other way to look at it is that you received a premium for the shares accepted and you have to net the commission paid on selling the remnants off the disposal. It sounds like a lot to dispose of a small parcel but in context it was a lot better than what you could have sold the shares in total prior to the offer.

    If Snoppy is correct THEN Those who offered 100% of their holdings will on the whole proportionally get more of the shares accepted under offer and have a higher weighted average exit price after commission than those who offered less. Reinforces that if you wanted to hold after offer then you have tried to cycle as many shares thru offer to realise max level of control premium.

    I haven’t decided whether I will exit small holding after scaling or buy in to top up. I’ll see what price does first.

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