Leeds Building Society 13.375% PIBS (LBS) Tender Offer

[JohnEdwards]

TBH liquidity doesn't bother me - I'm there for the perpetual income!

[GoSeigen]

TBH liquidity doesn't bother me - I'm there for the perpetual income!

Perpetual doesn't mean you have a right to income forever.

It means you have no right to repayment of your capital forever.

GS

[88V8]

Bought 10k units of the NOTP and NBSP today... via ii forty mins on the phone, like pulling teeth.... 1.05 and 1.45 respectively.
I'm not supposed to be buying income atm, but the (almost) inevitable capital uplift is too tempting.

V8

[OldBoyReturns]

Bought 10k units of the NOTP and NBSP today... via ii forty mins on the phone, like pulling teeth.... 1.05 and 1.45 respectively.
I'm not supposed to be buying income atm, but the (almost) inevitable capital uplift is too tempting.

V8

I feel your pain. In my experience ii make buying PIBS more torturous than buying a house.

[NealMorris]

This Leeds offer doesn't look very generous, basically taking them out on a GRY of 7%, appreciate they were trading at a fairly sorry discount of about 7.8% just prior, Am I missing something?

[hiriskpaul]

This Leeds offer doesn't look very generous, basically taking them out on a GRY of 7%, appreciate they were trading at a fairly sorry discount of about 7.8% just prior, Am I missing something?

This is how I feel. Their 2023 Pillar 3 disclosed a CET1 ratio of 33%! Yet their PIBS were languishing below bank/insurance prefs with issuers nowhere near as well capitalised.

Most PIBS have looked cheap compared to bank and insurance prefs and I am disappointed to be taken out at 7%.

[GoSeigen]

If the offer is no good then Leeds BS should be handed a wholesale rejection of it.

This is how I feel. Their 2023 Pillar 3 disclosed a CET1 ratio of 33%! Yet their PIBS were languishing below bank/insurance prefs with issuers nowhere near as well capitalised.

Ultimately the Society is owned by its members, not its PIBS holders. If there is so much value in the business then maybe become a member and push the board to distribute some of the value, either directly or via savings rates better than 7%!


GS

[hiriskpaul]

If the offer is no good then Leeds BS should be handed a wholesale rejection of it.

This is how I feel. Their 2023 Pillar 3 disclosed a CET1 ratio of 33%! Yet their PIBS were languishing below bank/insurance prefs with issuers nowhere near as well capitalised.

Ultimately the Society is owned by its members, not its PIBS holders. If there is so much value in the business then maybe become a member and push the board to distribute some of the value, either directly or via savings rates better than 7%!


GS

I haven't checked recently, but I think PIBS holders are members!

I think Leeds have been very shrewd in their timing here and 7% is probably enough at the moment to get sufficient votes to take out the PIBS.

[GoSeigen]

If the offer is no good then Leeds BS should be handed a wholesale rejection of it.

Ultimately the Society is owned by its members, not its PIBS holders. If there is so much value in the business then maybe become a member and push the board to distribute some of the value, either directly or via savings rates better than 7%!


GS

I haven't checked recently, but I think PIBS holders are members!

I think Leeds have been very shrewd in their timing here and 7% is probably enough at the moment to get sufficient votes to take out the PIBS.

I haven't checked either but normally it would be one vote per PIBS holder, so not material in the scheme of things.

GS

[Gordon51]

I’ve held a number of prefs for a considerable period but never given much thought to pibs. I probably should though. Is there anywhere that gives useful information for comparison purposes or, as I suspect, is it a case of trawling through the information made available by the issuer for each one individually ?

[hiriskpaul]

I haven't checked recently, but I think PIBS holders are members!

I think Leeds have been very shrewd in their timing here and 7% is probably enough at the moment to get sufficient votes to take out the PIBS.

I haven't checked either but normally it would be one vote per PIBS holder, so not material in the scheme of things.

GS

Yes, one vote per holder, regardless of position size, one vote per depositing member, one vote per borrower, regardless of deposit/loan size. Not sure if you get more than 1 votes if in more than 1 category, but suspect not. Unusual system - almost socialist!

[Bern]

I have received notification from AJ Bell about my holding but there is no option to dissent and receive the 2p voting fee. They are saying if you dissent you will not receive the voting fee.

"Option 4 - Dissent - Do not tender PIBS. You may dissent the proposed resolution and do not wish to tender your PIBS. You will not be entitled to the Voting Fee."

If they are right its not a voting fee its an acceptance bribe.

They are also saying...

"This proposal is subject to PIBS holder approval at a meeting to be held on 2 April 2024, and if approved will see all PIBS redeemed at the same price as that available in the tender offer."

Posts above indicate that it would not need PIBS holders approval if other votes carry the day.

if they are not right with these things you really ought to be able to expect given that millions of pounds are involved in total that they should be able to get these things right.

[Bern]

Reading the "prospectus" AJ Bell do seem to be right. Its an acceptance bribe.

[JohnEdwards]

Surely that would risk making it a coercive offer, which the BoI approach managed to avoid.

Presumably the PIBS holders would need a 75% vote to bind the remainder. BoI didn't get too much above this threshold, even with the voting fee. Perhaps that has made Leeds more cautious.

[GoSeigen]

Reading the "prospectus" AJ Bell do seem to be right. Its an acceptance bribe.

Kindly post a link to this information so that others can be similarly informed... thank you!

GS

[BondSquared]

Reading the "prospectus" AJ Bell do seem to be right. Its an acceptance bribe.

no, it's a Voting Fee, whichever way you vote (subject to the successful passing of the resolution, and holders not attending in person/appointing a different proxy from the Chairperson). It follows the BoI blueprint.

https://www.dfkingltd.com/media/jfbattum/qas-for-the-dfk-website-v2.pdf

[Bern]

Sorry GS. I was using the notification from The Leeds for which their is a link in the very first post above and I have assumed that what AJ Bell describes as option2 was the same as what the Leeds describes as option 2 which it doesn't seem to be. It does seem now that if you vote either way you would get the 2%. But I now have a problem with what AJ Bell are saying to me.

I can't see any option they provide which allows me to vote against and not tender. These are their only options.

"Under the terms of the event, you now have the opportunity to elect on the following options:

Option 1 - Take No Action (Default). This means that you do not wish to tender your PIBS nor vote on the proposed resolution.

Option 2 - Tender PIBS and Consent. If you choose to tender your PIBS, you are also agreeing to vote in favour of the Resolution. You will also be entitled to receive a Voting Fee of 2% of the principal amount of the PIBS tendered.

You are eligible to tender all or some of your PIBS, however elections must be made in multiples of £1,000. Please note, if there are a lot less PIBS in issue after the offer this could affect their liquidity to trade them and their price.

Option 3 - Consent - Do not tender PIBS. This means that you consent to the proposed resolution but do not wish to tender your PIBS. You will also be entitled to receive a Voting Fee of 2% of the principal amount of the PIBS tendered.

Option 4 - Dissent - Do not tender PIBS. You may dissent the proposed resolution and do not wish to tender your PIBS. You will not be entitled to the Voting Fee."

Unless someone can see something I am missing I'll need to question whether they have this right with them.

Bern

[GoSeigen]

Sorry GS. I was using the notification from The Leeds for which their is a link in the very first post above

No problem.


As a point of fact, link in the OP is not to a prospectus or offer memorandum, the linked document itself states:

"This announcement must be read in conjunction with the Offer Memorandum"

and

"The Voting Fee will be paid in addition to the Tender Consideration or the Redemption Consideration (as applicable), all as further described in the Offer Memorandum. "
[my emphasis]


It might be an idea to read the Offer Memorandum before throwing around emotive and potentially libellous words like "bribe" in relation to this offer which is made by a responsible business regulated by and subject to the rules of the FCA.

Please could someone post a link to the Offer Memorandum as I could not easily find it.


GS

[OldBoyReturns]

Surely the LBS tender offer is the (now) standard blueprint whereby everyone who votes (either for or against) gets the voting fee PROVIDING the 'sweep up' resolution is passed. So if you vote against and the resolution passes you still get the voting fee. If the resolution does not pass nobody gets the voting fee.

[Padders72]

Surely the LBS tender offer is the (now) standard blueprint whereby everyone who votes (either for or against) gets the voting fee PROVIDING the 'sweep up' resolution is passed. So if you vote against and the resolution passes you still get the voting fee. If the resolution does not pass nobody gets the voting fee.

.

Upon re-reading the document linked in the OP post, that is now my interpretation too, but it must be said it is about as clear as mud and it does seem AJ Bell for one have misunderstood completely. Drafting infelicities abound perhaps!