Greene King - SOLD!

[idpickering]

All done. I’ve bought more HSBC, LGEN, MARS, and AV., with the monies from my sale of my GNK shares . Back to sleep now.

Ian.

I should add that I also bought more BLND too, for whatever that’s worth. I’m in no rush to get backup to 30 holdings, so 29 it is, for now at least.

Ian.

[Bouleversee]

BBC "wake upto money" this morning suggested they were asset strippers and we can expect to see a lot of the estate closed and redeveloped. Which will be a sad day for a lot of local pubs and restaurants around the country.

As someone who loves beer and traditional UK pubs that is indeed a notable downside to the deal if significant closures do come to pass.

- Julian

Well, let's hope any closures are in Marston's or Mitchell and Butler's territory since I hold both but unfortunately not Greene King.

[Arborbridge]

I've not read the thread, so sorry if it's been mentioned before, but amongst the squeals of joy from those who have obtained an unexpected windfall there must be quite a few shareholders who are feeling less than chuffed.

I was surprised to see that the GNK share price was as high as £11.83 back in 2007, and even as recently as the end of 2015 it was pushing £10. There must therefore be a few long term holders who paid more than the bid price, and who will consequently be looking at a capital loss.

You should first adjust the 2007 price you quoted for the 3 for 5 Rights Issue in the second half of 2009. But even when you do, anyone buying at such a high price would not be buying High Yield, which is after all the modus operandi of HYP and the subject of this board. The same goes for 2015 when, if you had bought at £10, you would have been buying a yield of little more than 2%, hardly HYP territory!


Ian

Nevertheless, Clitheroekids point is valid and not all shareholders are high yield buyers. Although I'm ok on this one, I have been in the position he mentions. One does feel hard done by when everyone else is saying what a wonderful premium it is. "Oh no it's not!" such a shareholder would think, " It's daylight robbery. Just leave my shareholding to recover, thank you very much."

[Wizard]

Do you think we’ll get next year’s discount vouchers before the deal closes?

[tjh290633]

I recall saying this before, but I'm of the view that as a generality HYPs may experience more bids and other corporate action long term than the market overall, with this activity being mostly highly beneficial for the port. The reason is that HY is a component of value so there is a value tilt in the HYP strategy. What happens with value is that it tends to be outed over time and bids, major reorganisations, divestments etc. are the way this can happen.

It's not a strong tendency because HYPs by definition are not a full-on value share trading approach, something I know a bit about, they are purely an income strategy but there is in my view a bias towards value and that is possibly why they may attract more than their share of bids etc.

A good point. I have just looked at the 41 shares which have departed from my portfolio. 21 of them were either taken over or delisted, about 50%, but I have a further 35 shares still held which makes a grand total of 76, so only 27% in reality.

For interest they were:

Energy Group
Allied Domecq plc
Blue Circle Industries plc
Six Continents plc, formerly Bass plc (Split up)
Pilkington plc
BOC Group plc
Scottish Power plc
Hanson plc
Scottish & Newcastle plc
Imp.Chem.Ind.plc
Cadbury Schweppes plc
HBOS plc
Thus Group plc
Mapeley Ltd (delisted)
Tomkins plc
Brit Insurance Holdings NV
Northern Foods plc
Cattles plc
Rexam plc
Premier Farnell plc
Carillion plc (Delisted)

The other 20 were sold because of low yield.

TJH

[IanTHughes]

I've not read the thread, so sorry if it's been mentioned before, but amongst the squeals of joy from those who have obtained an unexpected windfall there must be quite a few shareholders who are feeling less than chuffed.

I was surprised to see that the GNK share price was as high as £11.83 back in 2007, and even as recently as the end of 2015 it was pushing £10. There must therefore be a few long term holders who paid more than the bid price, and who will consequently be looking at a capital loss.

You should first adjust the 2007 price you quoted for the 3 for 5 Rights Issue in the second half of 2009. But even when you do, anyone buying at such a high price would not be buying High Yield, which is after all the modus operandi of HYP and the subject of this board. The same goes for 2015 when, if you had bought at £10, you would have been buying a yield of little more than 2%, hardly HYP territory!

Nevertheless, Clitheroekids point is valid and not all shareholders are high yield buyers. Although I'm ok on this one, I have been in the position he mentions. One does feel hard done by when everyone else is saying what a wonderful premium it is. "Oh no it's not!" such a shareholder would think, " It's daylight robbery. Just leave my shareholding to recover, thank you very much."

Well, yes and no!

According to my records, on 4 Dec 2015, the price of Greene King PLC (GNK) peaked at 977.50p. So on the face of it, a purchase at that peak price would now be looking at a loss of 127.50p. However, any holding bought on that day would also have now received 4 years of dividends - including the one that is currently ex-dividend - totalling 131.65p. OK, not an advert for an ace portfolio manager but only a small loss against inflation and remember, only because the purchase was made at the absolute peak price, a price not seen before or since!

All holdings bought before that date – 4 Dec 2015 – would have benefitted from less capital loss with most showing a capital gain and many having received more dividends since purchase. All holdings bought after that date – 4 Dec 2015 – would have benefitted from less capital loss or of course, latterly, a thumping capital gain, depending on exactly when the purchase was made.

Virtually no-one would be nursing even a small loss overall!


I know, I should get a life!


Ian

[Arborbridge]

Just to continue the "get a life" theme....

At oday's price my GNK holding since is has been in my HYP (2011) has delivered an XIRR of 13.46%.

My first purchase recorded on PC was in 1997, though we had certified holdings well before that - early 1990's or late 1980s.

No idea what the overall figure is, but it can't be bad for a not that profitable or popular share.

Arb.

[Arborbridge]

To anyone wondering what the options might be following the demise of their Greene King holding, there's an interesting discussion here: viewtopic.php?p=245562#p245562

Arb.

[IanTHughes]

Just to continue the "get a life" theme....

At today's price my GNK holding since is has been in my HYP (2011) has delivered an XIRR of 13.46%.

I bought my one and only lot on the 10 Apr 2018 at a price of 468.27p - offering an historical yield at the time of 7.09%. Danger Zone? What Danger Zone? I see no Danger Zone!

This has delivered an XIRR to date of 63.43%! Of course that XIRR figure will decrease, unless there is a bidding war, and assuming I wait until the takeover payment is made - Dec 2019 I believe - will reduce to a paltry 51.67%. How disappointing

Yes, I know - right time, right place - there is luck in investing!


Ian

[Arborbridge]

Just to continue the "get a life" theme....

At today's price my GNK holding since is has been in my HYP (2011) has delivered an XIRR of 13.46%.

I bought my one and only lot on the 10 Apr 2018 at a price of 468.27p - offering an historical yield at the time of 7.09%. Danger Zone? What Danger Zone? I see no Danger Zone!

This has delivered an XIRR to date of 63.43%! Of course that XIRR figure will decrease, unless there is a bidding war, and assuming I wait until the takeover payment is made - Dec 2019 I believe - will reduce to a paltry 51.67%. How disappointing

Yes, I know - right time, right place - there is luck in investing!


Ian

How interesting. One does all the right things - eternity holding and all that over the best part of thirty years, and some Johnny-come-lately invests a year or so ago and makes 4 times the percentage return. Ain't no justice

[Wizard]

Having now checked back I can see I purchased GNK at 753p in November 2016. I am therefore making a capital gain of about a £1 per share and have received dividends (incl. current ex div still to be paid) of c.£1 per share. For a share that has been underwater for most of the time I have owned it I will be more than happy to accept the offer, I would be very happy to see similar offers for almost all the shares in my HYP (AKA Capital Destruction Portfolio)!

Any thoughts as to why the price dropped today and is sitting about 8p below the offer price? Does this suggest there is concern the deal won't go through? I'm temped to sell, for the sake of 8p per share I do not want to risk the deal falling over while I still hold the shares!

[Alaric]

Any thoughts as to why the price dropped today and is sitting about 8p below the offer price? Does this suggest there is concern the deal won't go through? I'm temped to sell, for the sake of 8p per share I do not want to risk the deal falling over while I still hold the shares!

Perhaps there is concern, or is it weight of sellers? There were also those shorting Greene King who would on the face of it be sitting on large losses.

There was another recent takeover, Dairy Crest I think, where the market price went above the offer price. No counter offer materialised, so it would seem anyone buying in the market just lost.

[TUK020]

Having only 29 different shares in my HYP is playing havoc with my OCD. 30 was a nice round number. I’m likely to top up LGEN and HSBC, but still need that 30th share. Or i’ll Have to just live with 29. I have/had the usual suspects already. I agree Arb, it is a nice problem to have I guess.

Ian.

Ian,
Why don't you post the list, and ask for suggestions for the new number 30
tuk020

[moorfield]

29 is the tenth prime number.

Also the sum of 2 squared , 3 squared and 4 squared.

Does that help soothe the OCD Ian ?

Your comment reminds me of that Spinal Tap scene -"but my amp goes all the way to 11" etc. . (substitute amp for portfolio here. )

[Gengulphus]

Also the sum of 2 squared , 3 squared and 4 squared.

Does that help soothe the OCD Ian ?

I'd have thought the obviously-missing 1 squared would make it worse! ;-)

Gengulphus

[peterh]

Just to continue the "get a life" theme....

At today's price my GNK holding since is has been in my HYP (2011) has delivered an XIRR of 13.46%.

I bought my one and only lot on the 10 Apr 2018 at a price of 468.27p - offering an historical yield at the time of 7.09%. Danger Zone? What Danger Zone? I see no Danger Zone!

This has delivered an XIRR to date of 63.43%! Of course that XIRR figure will decrease, unless there is a bidding war, and assuming I wait until the takeover payment is made - Dec 2019 I believe - will reduce to a paltry 51.67%. How disappointing

Yes, I know - right time, right place - there is luck in investing!

Ian

I came even later to the party - on 17 October last year at 502p. I was pondering over the weekend whether to use some accumulated dividends to top up as the price had come down a little!

[OLTB]

I have been looking at my purchase history of GNK in my SIPP and being a bear of very little brain, topped up when the price fell, not wanting to think too much of decisions when buying. The buying price has been:

17/10/16 736.32p
15/06/17 711.25p
04/07/17 655.82p
28/09/17 545.75p
06/08/18 489.13p

These would all have been times when my GNK holding was below average value of the HYP, and the yield was one of the highest - topping up a share with an ever decreasing share price had me holding my nose sometimes. However, the current result is that as well as the dividend income I've received from GNK, the capital appreciation (assuming the 850.00p sale price is realised) stands at 31.5%. If the buyout completes, I am hopeful that the resultant higher capital will generate a higher income.

Just an observation on my specific circumstances.

Cheers, OLTB.

[Wizard]

Bit concerned the price is still drifting the wrong way, thinking maybe I should get out now. What do others feel?

[OLTB]

Bit concerned the price is still drifting the wrong way, thinking maybe I should get out now. What do others feel?

Hi Wizard

When Sky was bought out, I held on to let market trading take place - Fox were outbid by Comcast in the end and the final agreed price was far higher than Fox's initial agreed price (some investors may have regretted selling early).

Of course I don't know that a further bid from a third party will present itself, but it might.

I've just had a look at Hargreaves Lansdown's site and see that the buy/sell ratio for GNK is heavily 'sell'! This may be investors taking profits which will, I think, have some effect on the share price.

You must of course do what you feel is right for your situation - I don't mind holding on as I'm not drawing income to live on so will wait - I know what the minimum sale price will be if it goes ahead.

Cheers, OLTB.

[moorfield]

Bit concerned the price is still drifting the wrong way, thinking maybe I should get out now. What do others feel?

I feel that if current yield has dropped below half of FTSE100 (or a similar benchmark such as CTY), which GNK has, and some, then it's a sell - no ifs no buts Time to move on and find another yield.