Computacenter Tender Offer- help please

30th Jan '18 by maffs0

26 comments 7074 reads

Guys,

can I ask for your help.

I've been investing now for a couple of decades, I have a maths degree and I'm fairly savvy, but I am really struggling to know what to do with this "return of value to shareholders". I have read the tender offer several times but still I am unsure what to do. I'm not asking for advice, just any experience anyone has of a similar offer.

What is confusing me? There is no definite tender price...anything between £11.70 and £12.60. I can tender any number of shares from 0 to 100% but not all will necessarily be filled. The document seems to suggest that there is a guaranteed minimum but only if the "strike price" is at £11.70.

Any help would be greatly appreciated. I just don't understand why they didn't give 7% special dividend and be done with it!

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InvestedGeordie

1st Feb '18

It's certainly an interesting exercise! Smaller shareholders are somewhat at the mercy of the insti's in this case. I've personally decided to try and cash all my chips in the strike price. I do not know how they will scale people back, as I expect they will need to.

John18v

3rd Feb '18

I realise now that if as seems likely the strike price will higher than the market price the offer may be worth taking up as long as dealing costs don’t exceed any gains. It will be interesting to know how the buy back will be allocated if it is oversubscribed. Will they use the opportunity to buy out small share holders?

Sully8786

Same here Damian,

I've never been a fan of Tender offers and this is the most complex one yet - special dividends all the way :)

12th Feb '18

This US link is very informative
https://www.thebalance.com/profiting-from-tax-free-spin-offs-in-your-stock-portfolio-357626

gus 1065

13th Feb '18

Results of the Computacenter (LON:CCC) tender offer here. The price is 1170p. How many of those you offered to sell that will be bought is a bit more complex.....

https://www.investegate.co.uk/computacenter--ccc-/rns/result-of-tender-offer/201802130700046547E/

Gus.

Hi Gus,

It suggests that if you attempted to tender >7.06% you will be scaled back to 4.42%.

All a bit of a silly, and complicated exercise if you ask me. A special Divi would have bee simpler, quicker, and probably better for the vast majority of holders!

IG

julesone

The share price has taken a bit of tumble today, currently 1090p, 80p less than the 1170p minimum strike price of the tender offer. Is Computacenter is shooting itself in the foot by overpaying for it's shares or will they simply walk away and not buy any?

I'm not a holder very tempted to buy at this low price having not send any reason for the fall. Fundamentals are good and I like the latest NED appointment who has a good CV and someone to used to work for my old firm.

ACounsell

I have a small holding in Computacenter (LON:CCC) but didn’t participate in tender offer which given the scaling back wouldn’t have been worth it for me personally. However, I fail to understand why the price has fallen by 5%+ today. If forecast earnings are the same and there is the prospect of fewer shares in issue then given the same rating (PE ratio) the share price would be higher. Isn’t that why companies do share buy backs and isn’t this tender offer just another means of returning £100m to the shareholders? Are their any investment bankers out there who can explain where I’m going wrong?

tony777x

I agree I am totally miffed at why the shares have fallen with such volume. Anyone have any ideas? I would have thought if anything with less shares more likely to go up. The only thing I can think of as the shares on offer at the strike price are such a small amount some were holding out for more. In general it makes no sense to me.

maffs0

I tendered all my shares and it looks like I'll get about 11.5% (7%+4.5%) of them sold at £11.70.

I'm assuming today's high volume is the purchase of the shares by the broker which makes the fall all the more strange. Maybe they had sellers lined up.

The fall may have to do with the number of instis who were willing to sell at £11.70. This will now be viewed perhaps as a ceiling and so led to selling pressure. Computacenter (LON:CCC) has been pretty solid throughout the recent volatility and perhaps the conclusion of the tender offer has led to it "catching up"!

The buyback will lead to EPS being higher than it would have otherwise been by around 8-9% which should be good for the shareprice in time.

I'm thinking of buying back the shares I sold if there is any further weakness.

M.

It could be that as a result of the buy back a potential takeover bid has been abandoned with consequent disposal of shares.

14th Feb '18

One other thought is that the broker will have been buying these shares over the last week or so thus keeping the price steady during the recent correction. With the buying complete, the price has dropped.

monions

16th Feb '18

Interesting Director's RNS just out.

https://www.investegate.co.uk/computacenter/ccc/director-pdmr-shareholding/201802161630021842F/?fe=1&utm_source=FE%20Investegate%20Alerts&utm_medium=Email&utm_content=Announcement%20Alert%20Mail&utm_campaign=Computacenter%20Alert

Considering that the tender offer was oversubscribed and all requests were parred back to about 7%, the directors, particularly Peter Ogden (and family), managed to successfully tender around 2 million shares. Looking at the total holdings, these typically represent less than 10%, so no big alarms.

But, I do feel this wasn't how the tender offer was initially presented to shareholders in general.

Hot Socks

erm, are we saying that the complex tender offer that the directors came up with has allowed those self same directors to sell 2m of their own shares to the company at a price above market value?

How can it be in the interests of the company to buy back its shares for higher than market price?

Seems to benefit primarily large shareholders for whom the parred back sale 7% of their holding is a meaningful amount. For me I'd have made about £15 above what I'd get from selling the same shares in the market, plus I guess a saving in commission. So no point whatever in taking part.

A complicated way of doing things with the end result of disproportionately benefitting directors and large shareholders or am I missing something?

tomg23

I had just over 50% of my shares tendered at 1170p. Is this what everyone else got?

Thanks
Tom

Blissgull

tomg23, Yes me too. 509 of 1,000 shares purchased in the offer. I had tendered all at the strike price. Can't really understand the basis on which it has been done.

Totally baffled

rpannell

17th Feb '18

Using Barclays nominee account, I had 66% tendered at 11.70. I guess I have picked up from the many other Barclays nominee account holders that chose not to tender. All very strange

I got 60% with one broker and 100% with another. Overall very pleased although I didn't realise that the broker's account would be considered as one. I tendered them all at strike.

I'm expecting a relentless move up here now (market conditions permitting) as the market relaises that eps will now be 7-8% higher than the consensus.

M.

18th Feb '18

Nice to see a company putting small shareholders above institutions.

Computacenter Tender Offer- help please

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Maffs0

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