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HINT c share offer
deepblue
Posted: 16 April 2017 10:30:39(UTC)
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Does anyone have a view about taking up this 1 C share offer for every 2 ordinary shares held at £1 per c share?

If they convert to ordinary shares currently at 149p its surely a no brainer, or am I missing something?
john_r
Posted: 16 April 2017 12:53:16(UTC)
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Usually in these type of issues the 'C' shares convert to Ordinary shares on a pro-rata value basis protecting existing holders from dilution.
So nobody wins - nobody loses.
The only good thing I can think of is that you increase your holding without paying 0.5% tax on the shares. Against that you lose out because the expenses of the issue are taken from the 'C'share fund.
2 users thanked john_r for this post.
deepblue on 16/04/2017(UTC), Guest on 24/04/2017(UTC)
Gary H
Posted: 16 April 2017 18:53:30(UTC)
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I have been invested from inception with this Trust which got off to a slow start only launching at about £42 million, however with the recent rollover of a stable mate into Hint and other C Share offers since launch it is now around £237 million and attracting more interest and a reduced individual expense costing. If it gets the green light in May the Company will invest in a focussed and internationally diversified portfolio of 50-80 companies that are outside the UK. The target size of this issue is £75 million and the costs and expenses of the issue will be borne by the holders of C Shares only. Any C shares not taken up under the Open offer to Ordinary Shareholders could be purchased by other share holders who apply for extra C Shares although of course could be scaled back depending on demand, or not receive any, if fully subscribed. I personally see Hint as a Trust in the right place at the right time for possibly the next two years and could be stepping up a gear to maximise returns for shareholders as well as the size of the Trust for Henderson. It would not be a surprise to me to see shareholders making tidy profits out of the C shares themselves. What do others think on this one? I would be interested in your comments.
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Guest on 24/04/2017(UTC)
Milo Don
Posted: 17 April 2017 10:58:09(UTC)
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As far as I can see, if you take up the C shares offer you will be paying a premium for the shares (as costs are subtracted from the £1) whereas HINT ords are trading at a discount.

If you want lots of extra exposure to HINT and already have a large holding I can see why it might be interesting, but otherwise it doesn't seem to make much sense. If you just want to increase your holding, surely it would make sense to just buy them in the market?
3 users thanked Milo Don for this post.
deepblue on 17/04/2017(UTC), Guest on 24/04/2017(UTC), dlp6666 on 24/04/2017(UTC)
xcity
Posted: 17 April 2017 13:21:29(UTC)
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Milo Don;45911 wrote:
If you just want to increase your holding, surely it would make sense to just buy them in the market?

Seems like that, doesn't it?
And not xd yet either.
john rolf
Posted: 18 April 2017 16:26:30(UTC)
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Just in case there is any remaining doubt, the C shares will not be converted to HINT shares automatically on a 1:1 basis. I hold HINT via two online platforms, each of which issued me with a corporate action notice imprecisely written and possibly implying the conversion would be 1:1, so I can understand that there may be confusion. However, one of the notices contained a link to the C-share prospectus, and therein was a detailed explanation of how the conversion would be done. Even so, I found the explanation rather poorly described. But it is clear that the conversion would be done within 6 months at the latest and would be based on the relative NAVs of the C share and the HINT share as at the time of conversion. The prospectus also makes it clear that the intention is to avoid/minimise any dilution of existing HINT investors and to avoid the market risks associated with setting a fixed conversion rate in advance. So, as others have said, there is no advantage in the C shares other than possibly gaming the incidental costs, commissions, etc. However, I suppose there is also the possibility that the C shares "pot" will be invested in better- or worse-performing assets than the existing HINT assets, so the actual conversion rate will remain uncertain. To put it more simply, and ignoring the gaming aspects, £1000 invested in C shares will eventually result in £1000-worth of HINT shares.
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I predict a riot on 19/04/2017(UTC), Guest on 24/04/2017(UTC)
deepblue
Posted: 18 April 2017 16:49:07(UTC)
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That's a very clear explanation - thank you! I think I'll let this offer pass - not to dissuade those whom it might suit.
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I predict a riot on 19/04/2017(UTC)
xcity
Posted: 18 April 2017 18:44:14(UTC)
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john rolf;45944 wrote:
To put it more simply, and ignoring the gaming aspects, £1000 invested in C shares will eventually result in £1000-worth of HINT shares.

Paying a premium for something available at a discount means that you are effectively paying £1000 for less than £970 worth of shares.
The 'gaming' aspects are all important to making the right calculation.
If they can, they'll probably try to lift the shares to a premium to make the offer look better.
john_r
Posted: 19 April 2017 16:20:15(UTC)
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xcity;45950 wrote:
john rolf;45944 wrote:
To put it more simply, and ignoring the gaming aspects, £1000 invested in C shares will eventually result in £1000-worth of HINT shares.


Paying a premium for something available at a discount means that you are effectively paying £1000 for less than £970 worth of shares.
The 'gaming' aspects are all important to making the right calculation.
If they can, they'll probably try to lift the shares to a premium to make the offer look better.



John rolf is correct i£1000 of C shares (NAV) will convert to £1000 ordinary shares (NAV). Discounts or premiums do not come into it. As mentioned before nobody loses and nobody wins. It is an equitable process for getting in new money, issuing new shares and thereby increasing the liquidity oand size of the trust.
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Guest on 24/04/2017(UTC)
xcity
Posted: 19 April 2017 16:52:32(UTC)
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john_r;45987 wrote:
xcity;45950 wrote:
john rolf;45944 wrote:
To put it more simply, and ignoring the gaming aspects, £1000 invested in C shares will eventually result in £1000-worth of HINT shares.


Paying a premium for something available at a discount means that you are effectively paying £1000 for less than £970 worth of shares.
The 'gaming' aspects are all important to making the right calculation.
If they can, they'll probably try to lift the shares to a premium to make the offer look better.

John rolf is correct i£1000 of C shares (NAV) will convert to £1000 ordinary shares (NAV). Discounts or premiums do not come into it. As mentioned before nobody loses and nobody wins. It is an equitable process for getting in new money, issuing new shares and thereby increasing the liquidity oand size of the trust.

Equitable process it is, but calculated on NAV. So £1000 of C shares assets converts into equivalent £1000 asset value of ordinary shares.

However, the price you pay for the C shares and ordinary shares may not be the same if you buy now.
You have to pay a premium for the C shares (because the costs of the issue have to be deducted from the C shares assets), and you may get the current shares at a discount to NAV, depending on market price.

So you may have to pay £1020 to get £1000 C shares NAV, and may be able to get £1000 current shares NAV for £980. If so, then buying the current shares is cheaper than subscribing to the C shares. Current shares will have transaction charges to include in the calculations.

Always possible that the holdings in C shares will do better (or worse), but managers usually work to equalise performance between the two classes prior to conversion.

The way it usually works is for a C share offer to be made when the ordinary shares stand at a premium. That can give a reduced cost way of buying a popular trust and with a guaranteed availability (all depends on relative costs still).
1 user thanked xcity for this post.
Guest on 24/04/2017(UTC)
Keith Cobby
Posted: 20 April 2017 08:35:00(UTC)
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I am also a holder (and have been since it rolled out of the property securities trust). I would prefer the trust to grow through acquisition rather than C shares.
3 users thanked Keith Cobby for this post.
deepblue on 20/04/2017(UTC), andy mac on 20/04/2017(UTC), Guest on 24/04/2017(UTC)
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