GKN takeover offer from Melrose

[Bouleversee]

Sorcery:

My weekend papers (The Times, Sunday Times and FT) all seem to regard Melrose highly and think this was the best outcome but if you are not happy about Melrose, why don't you go for the all cash option. I was going to suggest selling in the market now if the s.p. had stayed at Thursday's close but it has fallen back a bit.

I have to accept and give my options to IWeb by Apr.11. I see on their website that GKN goes x-d on Apr. 5 with a dividend of 6.20 p. to be paid on 14 May. In view of the fact that the offer has been declared unconditional as to acceptances, will this dividend still go ahead and will it make any difference to eligibility if one accepts before Apr. 5 or should we hang on until that date. I wouldn't want to miss out on £320, which one would definitely do if selling in the market before that date, though the s.p. is likely to go down by that amount on Apr. 5, I presume.

[Riftvalley]

I looked at the final Melrose offer and it says:
"Under the terms of our Final Offer, as a GKN shareholder you will receive:
81 pence in cash For each GKN Share you hold and 1.69 New Melrose Shares
In addition,
GKN Shareholders on the register on 6 April 2018 will be entitled to receive the final dividend of 6.2 pence per GKN share as announced by the GKN Board on 27 February 2018 (the “Announced Dividend”)."

I also checked with Iweb that this means the dividend will be received if I elect now. They confirmed that this is true. Logical really, as if not it would be an imporant reason to have rejected the Melrose offer last Thursday and may have affected the outcome of the vote.

Do others share this opinion?

[Bouleversee]

Riftvalley -

Iweb's notification only mentions the dividend in the context of the basic offer so as I am minded to ask for the share alternative I checked with them whether I would still get the dividend if I accepted now and asked for extra shares and they said they will not be sending off the acceptances/options till after Apr. 11 so I will still be on the register on Apr. 6 so will get the dividend even if I notify them of my acceptance now.

[Bouleversee]

Approaching D-Day I am still sitting on the fence. Bizarrely, if my calculations are correct, on my 5175 shares the cash offer would be worth getting on for £2k more than the all share offer would be worth at Melrose's current share price. However, the market is generally down so the Melrose s.p. is likely to recover, unless the Elliott lot and others have started shorting them now. Might as well stick a pin in it or compromise with the basic offer.

[Bouleversee]

Still dishing out shares to execs. I wonder what will happen to all those remaining in treasury stock:

https://www.investegate.co.uk/gkn-plc/g ... LC%20Alert

[Bouleversee]

Why do you suppose Goldman Sachs are increasing their holding in GKN at this stage when last week they were increasing their holding in Melrose?

[Sorcery]

Why do you suppose Goldman Sachs are increasing their holding in GKN at this stage when last week they were increasing their holding in Melrose?

Knowing Goldman Sachs they have a sell recommendation on them both while believing in the prospects for the stocks and are buying them up

[Bouleversee]

That figures. I suppose they want more Melrose shares but if the GKN price is down they'may get them cheaper via the basic offer which presumably is all that's open to them at this stage unless they have a later acceptance date than us nominee holders. I seem to remember it would have to be declared wholly unconditional by Apr. 19.

[Bouleversee]

So Melrose have won. Details of how the options will be satisfied "(more cash" applications will be scaled down; "more shares" applications will get the lot) and deadline date etc. are here:

https://www.investegate.co.uk/melrose-i ... es%20Alert

GKN s.p. was up more than that of Melrose when I looked a few minutes ago and it would seem a lot more GKN shareholders wanted more cash than more shares.

[Bouleversee]

https://www.investegate.co.uk/gkn-plc/g ... LC%20Alert

I wonder what happens to the treasury stock left after options have been awarded. Does it become the property of Melrose?

[Bouleversee]

https://www.investegate.co.uk/gkn-plc/g ... LC%20Alert

Am still wondering.

[PeterGray]

If GKN has shares in treasury, i.e. it owns them, and the company is bought out, then whoever buys the company owns the treasury stock along with everything else.

Is there any reason why this should not be the case here?

Peter

[Bouleversee]

Peter Gray -

That would certainly be logical but things don't always happen in a logical way so thanks for confirming that that will be the case.

[Alaric]

Details of how the options will be satisfied "(more cash" applications will be scaled down; "more shares" applications will get the lot) and deadline date etc. are here:

Assuming you got the 1.69 Melrose shares and 81p in cash, is there a source stating the apportionment factor for CGT base cost?

The Broker has applied a factor of 82.42% which seems about right, but I like to check these against external sources.

[Bouleversee]

Mine are in an ISA so, thank goodness, I didn't need to exercise my brain over that one. I am more concerned about why the s.p. has dropped since then.

[PinkDalek]

Assuming you got the 1.69 Melrose shares and 81p in cash, is there a source stating the apportionment factor for CGT base cost?

The Broker has applied a factor of 82.42% which seems about right, but I like to check these against external sources.

If you are in luck, it might be linked to here https://www.melroseplc.net/investors/sh ... -meetings/ in due course.

That page has an earlier Base Cost Apportionment file, from 2016, as does this one https://www.melroseplc.net/investors/sh ... lder-faqs/. I don't think it is in the Acquisition of GKN plc section of Melrose's website https://www.melroseplc.net/investors/gk ... f-gkn-plc/.

Alternatively, why not ask Melrose https://www.melroseplc.net/contact/ where the detail might be, the brokers won't have guessed (hopefully), or wait for the relevant Annual Report, where the details may well be included based on what other quoted companies include?