Forum Archive Index - April 2003

["Michael McGregor" <mikemcgregor@nzoomail.com>]

>Can someone explain what the following means to a small shareholder like
>me?  Are they basically
>Giving me 5 notes at 20p each and paying 8% on them in return for 2 of
>my shares.  I have 
>the ability to buy and sell these notes on the open market and take my
>shares back in
>2004 or 2005 for the same 5 for 2 ratio?
> 
>Is my thinking correct?  What are the disadvantages/advantages of taking
>up this offer 
>and is it separate from the usual 1 for 10 share split?
> 
>Cheers for your help.
> 
>As announced by the Chairman on 14 March 2003 in his statement
>accompanying
>the preliminary results for the year ended 31 December 2002, Guinness
>Peat
>Group plc ("GPG") intends to make an off market tender offer to
>repurchase
>up to 10 per cent. of each shareholder's ordinary shares on the basis of
>five 8% convertible subordinated unsecured loan notes of 20 pence each
>to
>be issued by GPG (UK) Holdings plc ("GPGUK"), (the "Further CLNs") for
>every two ordinary shares bought back (the "Buyback Offer").  The
>Further
>CLNs will rank pari passu, and will be fully fungible, with the existing
>CLNs of GPGUK with their principal repayable in two equal annual
>instalments with the option to convert back to ordinary shares in the
>capital of GPG on 30 June 2004 and 2005.
> 
>
>
>
>
>Darryl,
             It looks to me like they want to exchange two and a half 
convertible
notes for every 
share they take back. You will receive an interest rate of 8% per annum until
at least June 30th 
next year at which time you have the option to convert the notes back into 
shares
if you wish. 
Otherwise I assume they will continue to pay you interest until June 30th 2005
when you will have 
another chance to convert back to shares, or, you can be refunded in cash and
take your money 
elsewhere. Because the offer is "off market", I am not sure whether these will
be tradeable on the 
open bond market. You probably only have the options as explained above. 
Standard
stock splits 
only involve exchanging shares and nothing else. For some reason, GPG are 
wanting
to reduce the 
number of outstanding shares but perhaps don't have the cash to simply buy them
back. Be wary 
of unsecured notes as you will most likely be at the back of the creditors queue
if anything goes 
wrong. Hope this helps.


Cheers, 

Mike M   


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