ICAP Announcement

[Raptor]

Got this corporate news with timetable for the IAP (ICAP) asset acquistion.

Further to our previous correspondence regarding the proposed series of transactions in connection with the Acquisition of certain assets of ICAP by Tullett Prebon PLC, we can now confirm the board of ICAP has announced that on 6th December 2016, the FCA has approved a prospectus in relation to the admission of the Ordinary Shares on the Official List of the FCA and to trading on the main market of the London Stock Exchange.

A Court Hearing to sanction series of transactions and to confirm a Reduction of Capital by ICAP is expected to take place on 14th December 2016. The Scheme will become effective on 15th December 2016 and the cancellation of listing of the ICAP Ordinary Shares on the Official List and Admission of the Newco Ordinary Shares by 15th December 2016.

Subject to the satisfaction or waiver of remaining conditions, ICAP expect the transaction to complete by 30th December 2016. Following this, ICAP expect to introduce NEX Group PLC as the new holding company of ICAP PLC.

Should you wish to find more information about the Scheme, please visit the ICAP website, http://www.icap.com/.

I know there are people with both ICAP and Tullet Prebon.

Raptor.

[teecee90]

I just got notified of this corporate action. Can anyone explain what it means in layman terms?

[Lootman]

I just got notified of this corporate action. Can anyone explain what it means in layman terms?

I got a shock this morning when my account showed a zero value for this holding. Then I saw the announcement. I am reading this as a non-issue - effectively like a name change. My broker says "no action needed".

More generally I am not in love with this share and it's on my list to maybe offload it in the next tax year, since I have a fair-sized gain on it.

[Gilgongo]

So all we need to do is ignore the IAP ticker and use NXG instead to get the share price, is that right?

[Raptor]

On iWeb it shows as NXG. Digitallook has it as well but when I tried YAHOO it wasn't known so give them a few days. If you use HYPTUS, I have posted the change that worked for me.

viewtopic.php?f=27&t=1674

Raptor.

[genou]

I just got notified of this corporate action. Can anyone explain what it means in layman terms?

I got a shock this morning when my account showed a zero value for this holding. Then I saw the announcement. I am reading this as a non-issue - effectively like a name change. My broker says "no action needed".

More generally I am not in love with this share and it's on my list to maybe offload it in the next tax year, since I have a fair-sized gain on it.

You are aware that this is on the back of a deal with TLPR, and you should be expecting to see some TLPR shares turn up? Or perhaps you bought ex-action.

[Lootman]

You are aware that this is on the back of a deal with TLPR, and you should be expecting to see some TLPR shares turn up? Or perhaps you bought ex-action.

I am now. Funny thing is that I used to own TLPR and sold it. So now I guess I have it again.

When the dust settles I'll see what I've got. I tend to dislike small holdings such as typically arise from these types of deals.

[77ss]

I tend to dislike small holdings such as typically arise from these types of deals.

It may not be that small. If I understand things correctly, you should get approximately 0.47 TLPR shares per ICAP share you hold.

What I find difficult to estimate is roughly what a TLPR share will be worth post-deal (or an ICAP share for that matter). Any experts out there?

I hold TLPR; it's done well for me, and I just hope management knows what it is doing. Being somewhat overweight in the share, I cut by a third recently - just in case. Rather earlier than I normally would, but it's no longer the high yielder that it was.

[Instep]

Well, I now own NEX Group plc shares instead of ICAP but I'm utterly confused about what happens next.

I found details of the timetable on page 2 of:
http://www.icap.com/~/media/Files/I/Ica ... pectus.pdf

(My formatting)

If you don't like the formatting, just follow the above link to the original pdf.
Anyway.... Court hearing today... New TP shares issued by the end of the year... Odds and sods sorted out by 16th January.

It may not be that small. If I understand things correctly, you should get approximately 0.47 TLPR shares per ICAP share you hold.

What I find difficult to estimate is roughly what a TLPR share will be worth post-deal (or an ICAP share for that matter). Any experts out there?

As 77ss says. Has anyone any idea? If we get 0.47 TLPR shares per NEX share, does the value of the NEX shares fall by (roughly) the same amount on 30th December?

I think I'll just wait and see!
Instep

[77ss]

If we get 0.47 TLPR shares per NEX share, does the value of the NEX shares fall by (roughly) the same amount on 30th December?

I should imagine so. I don't suppose that you will suddenly get richer!

[Gengulphus]

Well, I now own NEX Group plc shares instead of ICAP but I'm utterly confused about what happens next.
...
As 77ss says. Has anyone any idea? If we get 0.47 TLPR shares per NEX share, does the value of the NEX shares fall by (roughly) the same amount on 30th December?

Basically yes, though it's the number of your NEX shares that will drop. The share price will probably remain more-or-less unchanged, but the reduction in their number will of course reduce the value of your holding just as effectively as a share price drop will.

In more detail, your ICAP shares were replaced by NEX shares while the market was closed between December 14th and December 15th - the expected timetable says "Newco" rather than "NEX", but the first page of the announcement says 'NEX Group plc ("NEX" or "Newco")' so they mean the same thing.

Then while the market is closed between December 29th and December 30th, three things will happen:

* the demerger will come into effect, turning your old NEX shares into what I might call 'mid-action NEX shares' (which you'll never actually see) and newly-issued TLPR shares, on a basis that can only be determined approximately at the moment - the exact numbers will be announced on or before December 28th;

* NEX will reduce its capital - which I believe is a necessary part of the whole scheme under company law, but not of great concern to shareholders;

* the 'mid-action NEX shares' will be consolidated into new NEX shares, using a consolidation ratio that is also not yet exactly known but also expected to be announced on or before December 28th. Such consolidation ratios are generally chosen to compensate roughly for how much of the company has been demerged, so that if N% of the value of the original value of the company has gone into the demerged company, then roughly N% of one's shares disappear in the consolidation, and so with the value of the company and the number of shares both having dropped by about N%, the value per share (which for this purpose is basically the share price) remains roughly unchanged. And the purpose of doing so is largely the cosmetic one of avoiding a major share price drop at the time of the corporate action - since e.g. people looking at a share price chart subsequently would otherwise see a major fall and think that the company had encountered some sort of disaster and its shareholders had been badly affected, whereas actually they've just ended up with two holdings of total value about the same as the one holding they had before...

Anyway, the net result is that on December 30th, you can expect to wake up to see that you have a new holding of TLPR shares, your holding of NEX shares has been reduced in number, the NEX share price is roughly unchanged (with little or no more change than one might normally expect to see overnight), and the combined value of your new TLPR shares and your remaining NEX shares is little different from what the value of your NEX shares had been on December 29th.

Gengulphus

[Instep]

Thank you Gengulphus.
I will update my records when it's all over and wait to see how the dividends turn out.
At least, all my holdings are in ISAs so I don't have to think about tax calculations.
Kind regards.

[teecee90]

Oh Crikey...

My IAP (NEX) holding is only worth about £350 so I'm wondering whether to just sell them now rather than have 2 tiny holdings that will cost twice as much to sell.

[funduffer]

Anybody got any idea how to represent this complicated affair in my HYP unitisation (Income units), when the dust has settled?

I haven't spent any more, I will just end up with some NEX shares worth a bit less than my original ICAP holding, and some TLPR shares to make up the difference. So I guess the number of units stays the same, but how do I change the unit price (if at all)?

I guess I just recalculate the total portfolio value and then divide by the number of units?

Any subtleties I am missing?

FD

[Gengulphus]

Anybody got any idea how to represent this complicated affair in my HYP unitisation (Income units), when the dust has settled?

I haven't spent any more, I will just end up with some NEX shares worth a bit less than my original ICAP holding, and some TLPR shares to make up the difference. So I guess the number of units stays the same, ...

Yes - unitisation adds units when you put money into the portfolio and subtracts units when money comes out of it (*), and otherwise leaves their number unchanged. In each case, the number of units added/subtracted is determined by dividing the amount of money by the current unit price.

(*) Except for income coming out of the portfolio in the case of income units, which is not accounted by changing either the unit price or the number of units, but by increasing the income-per-unit by the amount of income divided by the number of units.

... but how do I change the unit price (if at all)?

I guess I just recalculate the total portfolio value and then divide by the number of units?

Yes, that's basically always the rule for determining the unit price. The only sort-of-exception is right at the start, when you chose whatever initial unit price you want and determine the initial number of units by dividing the initial value by that unit price - but that could actually just as well be expressed as choosing whatever initial number of units you want and determining the initial unit price by the standard rule. The only real reason for expressing it the first way is that people generally want the initial unit value to be a round number such as 100p or £100.00, and it's simpler to tell them to choose the number they want directly rather than indirectly...

Gengulphus

[funduffer]

Thanks Gengulphus,

So I knew the answer already, but it is nice to get confirmation.

It seems I am learning!

FD

[Instep]

http://www.investegate.co.uk/nex-group- ... 00137914S/
Missed this announcement on Wednesday.

Confirmation of number of New Tullett Prebon Shares and Share Consolidation ratio
...
holders of Newco Ordinary Shares on the register of members of NEX at the Newco Reduction of Capital Record Time, being 6:00 p.m. on 29 December 2016, will therefore receive approximately 0.467 New Tullett Prebon Shares for each Newco Ordinary Share held.

The board of NEX further confirms that, in connection with the Share Consolidation and following the Newco Reduction of Capital becoming effective, every 7 Newco Ordinary Shares of 10 pence each on the register of members NEX at the Newco Reduction of Capital Record Time will be consolidated into 4 Newco Ordinary Share of 17.5 pence each (the "Consolidation Shares").

The changes should appear today.
Instep

[Raptor]

Hi.

My shares for TCAP have appeared. The breakdown is your NXG shares are divided as 55% NXG and 45% TCAP.

For those using HYPTUS. The following in the data sheet seems to work ok.

Code: Select all

/equity/TP_ICAP   TP ICAP   TCAP   Financial Services   TCAP   12013   https://www.tpicap.com/investors/investor-overview   

Raptor.

[Gilgongo]

So for the Fool who doesn't pay much attention to their manually created portfolio spreadsheet until times such as the new year - how does one handle this?

In my example, I had 1244 IAP shares before the split. Now I have 710, with 588 TCAP shares at a book cost of zero. I notice the same has taken place for some South32 shared that have arrived...

[genou]

So for the Fool who doesn't pay much attention to their manually created portfolio spreadsheet until times such as the new year - how does one handle this?

In my example, I had 1244 IAP shares before the split. Now I have 710, with 588 TCAP shares at a book cost of zero. I notice the same has taken place for some South32 shared that have arrived...

Depends what you are trying to achieve. If you want to align your recorded costs with the CGT treatment then for NXG / TCAP, the closing prices on the day after the deal were 464.5 / 433.3 . You should allocate your original IAP cost between the two as
0.517375808 to NXG ( being 464.5 / ( 464.5 + 433.3 ))
0.482624192 to TCAP. ( being 433.3 / ( 464.5 + 433.3 ))

see https://www.gov.uk/guidance/capital-gai ... rent-class