HDF - APA Sub Group

[So_Cynical]

Re: HDF - Hastings Diversified Utilities Fund

A capital return of $0.40 CPS would be awesome.

Yes and no...a return of capital of $0.40 CPS mite be somewhat awesome but almost certainly would also be share price negative after the ex-date...and then again it mite lead to a great opportunity to pick up some more HDF shares at a significant (20-30%) discount. :dunno:

I'm also thinking that a fund calling its self "diversified" probably needs to actually be a little diversified...1 possible outcome could be a partial float of Epic energy with HDF keeping 55% or so as a long term investment/revenue stream, thus retaining control while freeing up a large chunk of capital for the fund to get diversified. :dunno:

 

[danbradster]

Re: HDF - Hastings Diversified Utilities Fund

Yes and no...a return of capital of $0.40 CPS mite be somewhat awesome but almost certainly would also be share price negative after the ex-date...and then again it mite lead to a great opportunity to pick up some more HDF shares at a significant (20-30%) discount. :dunno:

I'm also thinking that a fund calling its self "diversified" probably needs to actually be a little diversified...1 possible outcome could be a partial float of Epic energy with HDF keeping 55% or so as a long term investment/revenue stream, thus retaining control while freeing up a large chunk of capital for the fund to get diversified. :dunno:

I realize the SP would fall after ex-return, although it could easily rise leading up to that if they announced in advance. The part I love is the no-tax part!

 

[skc]

Re: HDF - Hastings Diversified Utilities Fund

I realize the SP would fall after ex-return, although it could easily rise leading up to that if they announced in advance. The part I love is the no-tax part!

You do realise that it has no tax because it is a capital return?

Buy HDF @ $1.70 before ex-date and get 30c captial return. Wow. A 17% tax free return in a week!!!

OR

Buy HDF @ $1.40 after ex-date.

Any difference between the two scenario is simply the movement in the HDF share price leading up to the ex-date. And that movement may or may not be upwards...

 

[roland]

Re: HDF - Hastings Diversified Utilities Fund

You do realise that it has no tax because it is a capital return?

Buy HDF @ $1.70 before ex-date and get 30c captial return. Wow. A 17% tax free return in a week!!!

OR

Buy HDF @ $1.40 after ex-date.

Any difference between the two scenario is simply the movement in the HDF share price leading up to the ex-date. And that movement may or may not be upwards...

Hi skc, is HDF really a capital return? It doesn't seem to be stated anywhere. I've been rolling it over as a taxable distribution. Is it really tax deferred?

 

[roland]

Re: HDF - Hastings Diversified Utilities Fund

OK, answered my own question, it's no longer tax derferred:

 

[absolute1]

Re: HDF - Hastings Diversified Utilities Fund

http://www.financial-partners.biz/australian/hartleys/hartleys.pdf

page 4 states that its a possible takeover target

 

[skc]

Re: HDF - Hastings Diversified Utilities Fund

OK, answered my own question, it's no longer tax derferred:

Missed your post/question earlier.

What you see on the ASX website is their regular dividends with tax status as stated.

The money I was talking about refer to a potential speical one-off distribution/capital return from their recent asset sale.

 

[roland]

Re: HDF - Hastings Diversified Utilities Fund

Missed your post/question earlier.

What you see on the ASX website is their regular dividends with tax status as stated.

The money I was talking about refer to a potential speical one-off distribution/capital return from their recent asset sale.

Oh, I didn't know that was cast in mud, a capital return ...... I'll vote for that!

 

[So_Cynical]

Re: HDF - Hastings Diversified Utilities Fund

With today's announcement the distribution reduction is official, also no surprise that the distribution reinvestment plan has been suspended.

As a result of HDF’s current cash reserves and fully funded operating position

Quarterly distribution of 2.50 cents per security...some scope for this to be maintained i would think :dunno:

http://data.iguana2.com/hastings/news-item?Number=352235&Code=HDF

 

[So_Cynical]

Re: HDF - Hastings Diversified Utilities Fund

(4th-August-2009) Brought into HDF today at 84 cents...i figure its good value considering the recent capital raising was done at 90 cents, and going forward HDF is in alot better shape than before the capital raising, assuming the distribution holds at 3 cents per quarter, its a pretty amazing return of over 14% PA....my first fund to

Took some profit/established free carry in HDF today...mixed feelings as this stock has been very good for me, but felt it was time to free up some capital and complete stage 2 of this now 2 year old trade.

92.58% profit on my original parcel of shares + a distribution return of about 28% over the 2 years ive held. :bier: because of the size of my profit ive been able to hold on to about half my shares that will now be moved into the hold part of my portfolio for long term yield and cap growth.

HDF's only remaining business has a big future in my opinion and i am more than happy to hold my remaining shares for the long term...im very keen on almost anything gas.

 

[skc]

Re: HDF - Hastings Diversified Utilities Fund

Took some profit/established free carry in HDF today...mixed feelings as this stock has been very good for me, but felt it was time to free up some capital and complete stage 2 of this now 2 year old trade.

92.58% profit on my original parcel of shares + a distribution return of about 28% over the 2 years ive held. :bier: because of the size of my profit ive been able to hold on to about half my shares that will now be moved into the hold part of my portfolio for long term yield and cap growth.

HDF's only remaining business has a big future in my opinion and i am more than happy to hold my remaining shares for the long term...

That's a nice trade. HDF will probably eventually find a home under APA which had been busy with wind and gas of its own.

im very keen on almost anything gas.

Here you go.

 

[So_Cynical]

Re: HDF - Hastings Diversified Utilities Fund

The reason for the sharp move up in the HDF share price over the last month has been revealed....APA have announced a take over offer..ill quote the ann below.

Hastings Funds Management Limited (HFML) has today been advised that APA Group intends to make a takeover offer for all the securities of HDF it does not own, at a price of 0.326 APA Group Stapled Securities and $0.50 cash per HDF Security

Supposedly valuing HDF at $2 per share....ive always wanted to own some APA shares anyway so im ok with this.

http://www.asx.com.au/asxpdf/20111214/pdf/42382zrpvqrvtk.pdf

 

[PT Cruiser]

Re: HDF - Hastings Diversified Utilities Fund

Have had this in my portfolio for a fair while just collecting dividends, been a solid stock through some tough times, but when $1.90 arrived I couldnt help but sell it!

 

[skc]

Re: HDF - Hastings Diversified Utilities Fund

That's a nice trade. HDF will probably eventually find a home under APA which had been busy with wind and gas of its own.

The reason for the sharp move up in the HDF share price over the last month has been revealed....APA have announced a take over offer..ill quote the ann below.

Supposedly valuing HDF at $2 per share....ive always wanted to own some APA shares anyway so im ok with this.

The $2 per share is a little bit mis-leading, as APA goes ex-div next week for 17.4c and HDF holders are not entitled to that dividend. Further the offer is reduced by the HDF distribution after 14 Dec. This means the real value of HDF on today's APA close of $4.57 is only ~$1.93.

 

[So_Cynical]

Re: HDF - Hastings Diversified Utilities Fund

The $2 per share is a little bit mis-leading, as APA goes ex-div next week for 17.4c and HDF holders are not entitled to that dividend. Further the offer is reduced by the HDF distribution after 14 Dec. This means the real value of HDF on today's APA close of $4.57 is only ~$1.93.

^Yep i noticed that to...bit cheeky hey.

------------------

HDF holders also have to consider that i reckon we are in a round about way buying APA shares at the top of there range, not a place that i would be comfortable buying at.

No big deal if the HDF board rejects the offer...kinda hope they will.

 

[So_Cynical]

Re: HDF - Hastings Diversified Utilities Fund

No big deal if the HDF board rejects the offer...kinda hope they will.

I got an official email from HDF/computershare today...turns out the board has rejected the offer..see below.

Your Board considers that APA Group’s highly conditional offer undervalues HDF securities and advises you not to accept it because:

The offer does not account for HDF’s significant cash flow growth that is both contracted and prospective.

APA Group’s stated offer value does not take into account that APA securities were trading, at the time the offer was announced, with an entitlement to APA’s interim distribution of 17c per APA security. HDF securityholders who accept APA Group’s offer will not be entitled to receive this interim distribution from APA Group. Adjusting for this reduces the stated headline value of APA Group’s offer by 5.5c per HDF security.

APA has stated that capital gains tax roll-over relief will not be available to HDF securityholders who accept the offer. Accordingly, significant tax liabilities may potentially be incurred by HDF securityholders in the event the takeover is successful.

The offer is highly conditional and subject to market and regulatory uncertainty, including the requirement for ACCC and FIRB approvals. There is no guarantee these approvals will be granted.

The offer is also subject to a minimum acceptance condition of 90%, a condition that the S&P ASX 200 Index does not fall to 3,800 or below for certain periods, and a number of conditions relating to specific elements of HDF’s business and assets.

APA Group’s offer does not recognise the strategic value of HDF’s assets or provide full value for the benefit the assets would provide to APA Group.

I reckon APA will sweeten the deal.

 

[Tysonboss1]

Re: HDF - Hastings Diversified Utilities Fund

The Apa deal would provide the HDF shareholder with a higher dividend yield, a Higher free cash flow per share, a greater mix or assets and would take them from being owners of a non operated fund, to owners of a owner operated business.

The assets will be more profitable under Apa ownership.

I think the HDF shareholders will be better off with the combined company.

Offcourse the board and HDF management will not aggree, Their jobs depend on the deal not going through.

I think APA manage HDF's pipelines anyway, So why not cut out the middle men ( the HDF Fund Managers)

I disclose that I own APA shares and have always thought the HDF portfolio would be a great fit for apa.

 

[Tysonboss1]

Re: HDF - Hastings Diversified Utilities Fund

Have had this in my portfolio for a fair while just collecting dividends, been a solid stock through some tough times, but when $1.90 arrived I couldnt help but sell it!

the deal would take you from 5.5% dividend to 7.5%,

 

[So_Cynical]

Re: HDF - Hastings Diversified Utilities Fund

The Apa deal would provide the HDF shareholder with a higher dividend yield, a Higher free cash flow per share, a greater mix or assets and would take them from being owners of a non operated fund, to owners of a owner operated business.

The assets will be more profitable under Apa ownership.

I think the HDF shareholders will be better off with the combined company.

Offcourse the board and HDF management will not aggree, Their jobs depend on the deal not going through.

I think APA manage HDF's pipelines anyway, So why not cut out the middle men ( the HDF Fund Managers)

I disclose that I own APA shares and have always thought the HDF portfolio would be a great fit for apa.

Agree...however i want $2.25 per share (equivalent) and wont sell for anything less..Epic energy would be the jewel in APA's crown.

 

[Tysonboss1]

Re: HDF - Hastings Diversified Utilities Fund

Moomba to Sydney is the jewel,