BRAL shares - sell or hold?

[DB6]

Ok you financial pundits, I've just had an offer on my BRAL shares in connection with the BA takeover of 120p each (can't remember what they cost); are they worth holding on to or would you sell now?
DB6 the financial homunculus

[minogue]

doesnt matter what they origionally cost.
What matters is what they are worth if you
sell to BA (£1.20) compared to what they
would be worth if the BA offer failed (six months ago shares were quoted at around 50p).

Not a particularly tough call I suggest

[Bluelabel]

Can't remember the rules exactly, but I suspect that if BA has more than a certain percentage of the shares signed up (50% or 75% ) this is an offer they are obliged to make, and eventually you are obliged to accept!

Either way, it is a done deal, so I would suggest just signing up!

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Bluelabel

[King Midas]

If the deal goes through, you have no option. You MUST sell, and you can't do anything about it. It's as easy as that, unless you're name is Bishop that is!

[DB6]

Thanks chaps, suspected that might be the case. Ah well, time to take the money and run (and regret not having bought lots more)
Cheers DB6

[tailscrape]

Why don't you?:

Sell the BRAL shares at £1.20 and re-invest the money in BA immediately. There is usually loads of support for them around the sub £3.00 area. When the market realises it has banged them too far they will bounce viciously as will a lot of other stocks.

IMHO.

Could be worth a go....and no, I AM NOT A NIGEL!!

[DB6]

So what happens if I don't sell? Do the shares get bought anyway at that price if the takeover goes ahead? Is there any penalty for not selling i.e. doing nothing?

[Nightmale]

DB6:

It is an agreed offer, i.e. The Plimsoll Line (BA) already have acceptances for over 50% of the stock and have the backing of the directors a la Bishop et al. As a result it is a pretty good bet that the deal will go through, so you have 2 options:

1. Sell the shares now - remembering that you will receive less than the mid price quoted in the financial press (split/spread, or whatever you want to call it), and that you will need to pay commission to whatever broker you use.

2. Wait and receive 120p per share in cash with no split and no commission to pay.

Now I am not a rocket scientist, but.... ;)

[Flickroll2]

Dear Me !!!!!!!!!!!!!!

[Red Snake]

Normally in a cash offer for shares, you don't have to do anything. At the conclusion of the takeover, you will receive a cheque for 120p x the number of shares you hold. At that point your share certificate is worthless. You do of course have the option of cashing the cheque or not...

But read the bumf in case it's different!

[Shanwick Shanwick]

They haven't been above 120p since September 1998 so unless you bought them before that time you're quids in. You could sell them on the open market at 116p on Monday. Tell all your friends to do the same. The price will drop to 114p and that's when I'll step in!

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hhhiiisssssccrrrraaaacckkkllesssshhhhhh

[Crappy_Modem]

Errrm..if they are £1.16 now...
why not buy them at this price....and then receive £1.20 when the takeover goes through?
Make 4p per share, buy 10,000 shares and you make £400 or just under 4% profit within weeks.

So surely you can't buy them for less than £1.20 now?

[This message has been edited by Crappy_Modem (edited 08 April 2001).]

[Capt. Horrendous]

Crappy, if only it were that simple. The £1.16 you mention is how much you will get if you sell them now. The closing prices on Friday show that they actually cost £1.18/share to buy.

Therefore, if you were to you buy for £1.18/share, you will have to pay 0.5% stamp duty, plus commission to buy ( typically 1 - 2 % ) add to that expense the loss of any interest that your capital was earning elsewhere, and I'm afraid you'll find that all of your profit will have gone plus a bit more.

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Horry Snr.


[This message has been edited by Capt. Horrendous (edited 08 April 2001).]