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Dairy Crest (DCG)

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Bouleversee
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Dairy Crest (DCG)

#203334

Postby Bouleversee » February 22nd, 2019, 11:16 pm

I haven't seen anything on TLF about today's announcement that Dairy Crest has agreed to be taken over by a subsidiary of the Canadian firm Saputo for 620p a share via a scheme of arrangement, after which it will become a private company (RNS 8448Q). Directors to continue and probably most of the staff as well. Sounds remarkably like the RPC deal though there is no mention of the institutional shareholders. Presented as a done deal. It will be interesting to see what the papers say about it tomorrow.

Al my successful holdings are being taken over by foreign companies for prices which I don't feel reflect their future potential. There is precious little left that I feel inclined to invest in, hence a large chunk of cash in my ISAs doing absolutely nothing.

Does anyone else hold Dairy Crest. It has not done all that well recently but was still making a significant profit for me (considerably increased today) and the dividend wasn't bad. I shall be sorry to see it go.

supremetwo
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Re: Dairy Crest (DCG) to be taken over

#203348

Postby supremetwo » February 23rd, 2019, 1:18 am

Due to the low value of the £ as happened to other companies in previous periods of our currency weakness.

Plenty of overseas municipal pension funds looking for similar investments.

Alaric
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Dairy Crest (DCG)

#206745

Postby Alaric » March 9th, 2019, 8:43 pm

This Company is subject to a takeover. It isn't contested, so it's just the legal formalities.

I hold it in an ISA, which means it has to be held in Nominee form. I was therefore slightly surprised to be sent an email asking me to fill in a couple of the forms to formally vote for the takeover. I had ticked the box of my Broker for mailing of stuff like this and notifications of AGMs etc., but usually takeovers are handled as corporate actions by the Broker. The Broker has so far been silent.

https://www.dairycrest.co.uk/investors/

onthemove
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Re: Dairy Crest (DCG)

#206841

Postby onthemove » March 10th, 2019, 2:17 pm

Bouleversee wrote:Does anyone else hold Dairy Crest.


I did, but I sold in the market when I saw the price was above the takeover price.

I realise that there's the possibility that another takeover could come in, or the takeover could be rejected by shareholders and the company go on to do better.

But I figured the market price was only slightly above the takeover price, so the market thinks the possibility of a better takeover , etc, while present, is only small, and well a bird in the hand is worth 2 in the bush.

I think the premium at the time I sold (even taking into account dealing charges) gave me ~£70 more than I'd have got if the current takeover goes through as is.

If another bidder does join in and bumps the price higher, so be it - you win some, you lose some.

When I looked at the chart, the price was reasonable, and consequently the yield (at the market/bid price) was relatively low, so figure it was a good point to side step to something higher yielding - even the FTSE100 and other 'aggregate' tracker ETFs are yielding higher than DCG was yielding, so rather than try and bump the yield too high, I might instead look to use ETFs to 'de-risk' a similar yield through a diversified ETF.

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Re: Dairy Crest (DCG)

#206844

Postby Alaric » March 10th, 2019, 2:27 pm

onthemove wrote:I did, but I sold in the market when I saw the price was above the takeover price.


There still seemed to be a premium at Friday's closing price. There isn't by any chance a dividend entitlement payable to those holding to the bitter end?

onthemove
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Re: Dairy Crest (DCG)

#206902

Postby onthemove » March 10th, 2019, 11:27 pm

Alaric wrote:There still seemed to be a premium at Friday's closing price. There isn't by any chance a dividend entitlement payable to those holding to the bitter end?


From my records they paid out their last dividend at the end of January, and I hadn't been expecting the next to go ex-div until around June.

I haven't looked whether there are any other special dividends resulting from the takeover, but I wouldn't think so - my understanding is that it's a straightforward cash offer @ 620p. (Caveat: I haven't studied the RNSs in detail though; only skim read enough to satisfy myself the general situation to a level that I'm happy to make my own decisions on)

Based on previous experience of takeovers, they usually progress pretty fast once agreed, unless there are regulatory / competition hurdles, but I haven't seen any mention of that in this case.

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Re: Dairy Crest (DCG)

#206904

Postby Alaric » March 10th, 2019, 11:36 pm

onthemove wrote:- my understanding is that it's a straightforward cash offer @ 620p.


Someone thinks differently, else why are there trades above that? It's also a bit unusual to write to every beneficial holder asking for the forms to be filled in.

PinkDalek
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Re: Dairy Crest (DCG)

#206905

Postby PinkDalek » March 10th, 2019, 11:49 pm

Alaric wrote:There isn't by any chance a dividend entitlement payable to those holding to the bitter end?
onthemove wrote:- my understanding is that it's a straightforward cash offer @ 620p.

Someone thinks differently, ...


The Scheme documentation includes:

If, after the Announcement Date, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Dairy Crest Shares, Saputo reserves the right to reduce the consideration payable under the terms of the Acquisition at such date by an amount up to the amount of such dividend and/or distribution and/or return of capital.

Best to read the entirety though https://www.dairycrest.co.uk/media/1688 ... cument.pdf

onthemove
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Re: Dairy Crest (DCG)

#206909

Postby onthemove » March 11th, 2019, 12:28 am

Alaric wrote:
onthemove wrote:- my understanding is that it's a straightforward cash offer @ 620p.


Someone thinks differently, else why are there trades above that?


Like I mention above - I take the current market premium above the offer price to indicate the markets think that a higher bidder might yet enter.

The current premium reflecting the combination of perceived likelihood / potential additional premium.

E.g a premium of 10p could (hypothetically) indicate someone believes there's a 10% chance of someone coming in with a bid £1 above the current bid. Or 20% chance of 50p higher bid.

The deal isn't final - they would still accept a higher offer were one to materialise. And that's the risk I took by selling in the market at the current premium. If a better offer materialises, then I'll miss out, and whoever bought my shares off me will gain. They think it's worth the risk. I took the bird in the hand.

Ricksure
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Re: Dairy Crest (DCG)

#207575

Postby Ricksure » March 14th, 2019, 7:43 am

There is still big buying going on above offer price... 16:35 - 13/03 Buy 113378 635.00p £719,950.30

kempiejon
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Re: Dairy Crest (DCG)

#207939

Postby kempiejon » March 15th, 2019, 3:50 pm

I was offered a price of 365.101 to sell my DCG. It's 5 months before the next dividend and that 15p premium might be good enough for me, I'll have a good think over the weekend where I could redirect the money, I don't mind missing out on a further bid for a certain gain now and I'll benefit from moving the money into the new ISA in a couple of weeks. With SKY I sold my unsheltered holding to move money into an ISA and kept the ISA shares to the end conclusion. I do not have any DCG in an ISA.

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Re: Dairy Crest (DCG)

#211065

Postby Alaric » March 28th, 2019, 12:46 pm

kempiejon wrote: I don't mind missing out on a further bid for a certain gain now


There's still buying and selling going on at above the cash offer price. I took the profit, but someone must think the cash offer won't be the end.


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