TPG proposed merger

[Annabella]

HI Sharewealth & Co
Just wondering what to do with TPG shares in light of the proposed merger - ie - wait & sell when we get a signal or sell now in anticipation of the merger? Will it still remain in the SPA Investor universe of stocks?  Regards Annabella

[Gary Stone]

Annabella,

Will it still remain in the SPA Investor universe of stocks?

To remain in the SPA3 Investor universe the historical data will have to remain in Beyond Charts. We have asked our data provider what will happen with the data and don't have a response yet.

If it is confirmed that the historical data will not be retained then the SPA3 Investor ASX Public Portfolio will sell before TPM renames to VHA. If it is retained and the corporate action doesn't result in a big change to the TPM edge as per Beyond charts (Expectancy = 2.69) then this portfolio will remain in the position.

We can't advise what you should do but here are some considerations:
1. When mergers/takeovers occur typically 'normal' trading in the stock is suspending leading up to the event. Although that doesn't appear to be the case with TPM at this  stage.
2. TPM has announced a special dividend to be paid to the shareholder. Appears this won't happen before 24 June. Google for details.
3. Typically there is a lot of paperwork after a merger. What is your attitude about paperwork?

It is a good idea to learn from this scenario. What does your Investment Plan say about mergers and takeovers?

In SPA3 Trader the typical rule that we introduced years ago was to apply a time limit after a merger/acquisition date is announced. a similar rule can apply here.

Trust that helps.

Regards,
Gary

[Annabella]

Thanks Gary
I assume Sharewealth will notify us whether the historical data will be maintained 

[PeterM]

TPG Special Dvidend Record Date is July 1st .  I assume that the 1:1 TPM to new TPG shares plus special Dividend plus new 2:1 Shares in TUAS Ltd will even things out if you just held on to them.  It's a big risk isn't it.?

Just that TPG shares will be suspended after 29th June - until trading again on 13th July.! ..that's assuming they are allocated before that date... if any thing like a SPP then I'd expect another week after that before I could act on them.

[Gary Stone]

Peter,

Lots of unknowns here over and above the standard unknowns of 'normal' trading conditions.

Another is that TPG will hold an 'open' position in our portfolios that can't be filled until suspension ends.

The big assumption is that the 1 for 1 and the special divs will 'even things out'. We don't know what price the entity will return to trade at.

The biggest issue for me in the length of time that TPG will not be available to trade and hence will exit this position from the 'public portfolio' tomorrow, 26th June.

Regards
Gary

[PeterM]

If I bought 200 shares at $1 or at $100 I'd still only have 200 shares.  I mean I'm not getting $200 or $20000 back in this proposed deal.  It is all based on how many shares I hold.

I win for sure if I bought at $1.
What am I missing here ? 1:1 TPM to TPG + 2:1 TUA + Special Div would need to be valued at more than what I originally shelled out for. If I don't know what TPG or TUA will trade at how can I know if I will win or lose ?.  It is a complete guess...I'm confused.. so that has to be a SELL.