Octopus Apollo - Reduction of dividend.

[Karellan]

A bit more reading and reasons for the merger was posted at 14.10.

http://www.investegate.co.uk/octopus-apollo-vct/gnw/octopus-...

What caught my eye was a 2.5p divi and a special divi of 16.5p to be paid on 2 Dec.

I think the marketmakers were out to lunch so I managed to pick some up before they reacted.

2 Dec appears to be a popular date as Eclipse is also paying a special divi.

http://www.investegate.co.uk/octopus-eclipse-vct--oec1-/gnw/...

Reading the covering letter from Octopus it seems that they intend to reduce the dividend from 5P to 3P. The NAV will have been reduced with the 16.5P special dividend and this maintains a 5% dividend.

I have mixed feelings about this.

[UncleEbenezer]

I think I've already expressed my reservations about the merger. Though I think I can live with a divi that is in effect a return of capital: you could presumably re-invest it to maintain income.

I expect the prospectus to land on the doormat sometime soon. I won't pre-judge it, but I shouldn't be in the least surprised to find myself voting No.

[Karellan]

There is some mention in the half yearly report about the merger. It suggests that due to the recent regulatory changes that Apollo will need to use a strategy more like Eclipse thus a merger is the way to go.

[UncleEbenezer]

There is some mention in the half yearly report about the merger. It suggests that due to the recent regulatory changes that Apollo will need to use a strategy more like Eclipse thus a merger is the way to go.

Reference: http://boards.fool.co.uk/octopus-apollo-eclipse-merger-13437396.aspx?sort=whole#13442137

[Shavtedagin]

Just trying out the new board, but have crunched some numbers today on Apollo and really their performance has been less than mediocre, returning roughly 2-3 % on NAV total return. Maybe the merger will improve things?
The reduced dividend is of no real concern as it still targets the same yield, probably at the expense of NAV as before.....
Happy to take the special dividend and use elsewhere.

[UncleEbenezer]

Just trying out the new board, but have crunched some numbers today on Apollo and really their performance has been less than mediocre, returning roughly 2-3 % on NAV total return. Maybe the merger will improve things?

Isn't that basically what Apollo said on the tin? Protect, minimise risk, but don't expect great returns beyond the tax break. They've certainly outperformed Downing in that space, though a comparison to Albion might be less favourable. What was your pre-Apollo-merger basis for calculation?

Eclipse was and is different: a substantially higher risk/reward promise. It has underperformed, but was brought under the same team as Titan maybe three years or so ago, hence my (hitherto unrewarded) punt on things improving.

[Shavtedagin]

Isn't that basically what Apollo said on the tin? Protect, minimise risk, but don't expect great returns beyond the tax break. They've certainly outperformed Downing in that space, though a comparison to Albion might be less favourable. What was your pre-Apollo-merger basis for calculation?

I used their historical and present reports, entry point 2009/10 & 2014/15. No where in my tin did it say regular dividends paid at the expense of NAV. Dividend target in 2012 prospectus was 5p, they've done it at the expense on NAV, which is my point. There are better places for the special dividend to be spent.

[UncleEbenezer]

Got the docs. Just skimmed them. Eclipse has no performance bonus, Apollo has one that's firmly "ugly": I suspect the wording in the prospectus is wrong, but taken literally it's the worst I've seen anywhere in the industry. Which reminds me why I never bought Apollo.

From theaic website: Apollo 3.54% Total charges (3.15% excluding ugly no-hurdle bonus), Eclipse 2.83%. So now we know who benefits from Apollo taking over Eclipse.

Looks like I'm voting No.

[Karellan]

Interesting. The Octopusses are attractive in the light of the recent regulatory changes but their repute for unreasonable charges makes me wary. For me they have a place and as I will need to lighten my VCT holdings eventually I feel these are a good candidate for that.

[outpost83]

Re. Apollo / Eclipse merger, have just voted in favour of most of the resolutions on grounds that, as an Apollo shareholder, I cannot see that there is much to be gained by voting against. The only resolution I voted against was Resolution 4, proposal to increase the maximum annual remuneration payable to Directors from £100K to £150K, this on grounds that it is contrary to one of the stated aims of the merger which is to "obtain greater efficiencies in annual running costs". I shall probably go along to the meeting, just out of interest. Anybody else any thoughts?

[UncleEbenezer]

http://www.investegate.co.uk/article.as ... 55730H2668

Eclipse votes yes, your uncle E being on the losing side as usual.

What do they actually mean when they say "on a show of hands"? How is my proxy vote counted? And shouldn't they publish some numbers? I don't expect they'll be quite as exciting as Foresight 4, but I'd still like to see them.

[127tolmers]

Uncle E, I believe there is a legal requirement for them to publish the results on their website. Have you checked there; it might take a couple of days for them to be put up?

[Kidman]

What do they actually mean when they say "on a show of hands"? How is my proxy vote counted? And shouldn't they publish some numbers?

It is usual for each resolution to be put to a show of hands first. After the result is announced a call for a poll may be made by the chairman or sufficient shareholders then present. Assuming there is no poll, the proxy votes cast must be read out to the meeting.

I do recall one instance with an Octopus VCT where a vote was passed on a show of hands but the subsequent publication of the proxy votes showed it would have failed had a poll been taken. I have also had a case where my proxy vote was not admitted for a 'technicality'. Perhaps I made too many votes against resolutions? These voting irregularities and several administrative errors when dealing with my share applications are my only concerns about Octopus, otherwise generally a good track record.

[BusyBumbleBee]

These voting irregularities and several administrative errors when dealing with my share applications are my only concerns about Octopus, otherwise generally a good track record.

and the registrar responsible for the errors in voting was, I believe .... Crapita

But they have now changed to Computershare

[Kidman]

and the registrar responsible for the errors in voting was, I believe .... Crapita

Interestingly, when I noticed problems with the figures, the Octopus VCTs that I held didn't use the registrar for the receipt of proxy votes, they had them all sent to themselves at Angel Court. That aroused my suspicions, why did they not use an independent outside body? I no longer hold any Octopus VCTs so am not aware of their current practice but suggest those who do may wish to check whenever they next receive material for a general meeting.

[UncleEbenezer]

Interestingly, when I noticed problems with the figures, the Octopus VCTs that I held didn't use the registrar for the receipt of proxy votes, they had them all sent to themselves at Angel Court. That aroused my suspicions, why did they not use an independent outside body? I no longer hold any Octopus VCTs so am not aware of their current practice but suggest those who do may wish to check whenever they next receive material for a general meeting.

I voted online, through the Crapita website. It would never have occurred to me to do otherwise.

[Kidman]

I voted online, through the Crapita website.

So would I have done had that option been available. I'm glad to hear voting is now in line with other companies.
My first Octopus VCT was the original Eclipse which in those days was just known as Eclipse VCT (and not Octopus Eclipse VCT) so I was going back to the beginning rather than having any recent Octopus experience.

[Karellan]

Now a new registrar like Titan by end Feb. All the Octopusses are moving to Computershare over the next 4 months it seems.

[UncleEbenezer]

Now a new registrar like Titan by end Feb. All the Octopusses are moving to Computershare over the next 4 months it seems.

Excellent. So I'm not losing out by not faffing about with yet another Crapita registration for the new slimmed down unintended Apollo holding.

[Karellan]

Happyness returns :-

https://www.investegate.co.uk/octopus-a ... CT%20Alert

Special dividend mid November.