Anglo Consortium

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bambam

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What happens to the shares if a consortium does takeover Anglo? These are the shares that the ordinary shareholder held.
 
The shares were all cancelled upon nationalisation as I understand it. Your shares (and mine) unfortunatly no longer exist. There is now effectively only one share. The bank would have to issue new shares which a consortium would then buy for, say, $5bn, as sum which then has effectively gone in as capital.

But the only way I see this working is if the government agreed to share the first portion of losses, or put in place some kind of limited loss guarantee. In which case, the government should just keep the bank, so it can use it for its own ends - it will likely be on the hook for some amount of losses either way. Personally I dont think a sale to private equity right now will be a runner, nor will be best for the country.

I think a large part of the public will misunderstand this transaction as well, and will be angry that the $5bn that a buyer might spend wasnt paid to the previous Anglo shareholders. But this isnt how it would have worked had someone bought anglo before nationalisation. A buyer would have paid only a cent or two, if anything, per share, and put in $5bn capital after the purchase. The bank was effectively insolvent and not worth anything - shareholders would have got nothing, or practically nothing, even if there had been a willing buyer of the bank before the government stepped in.
 
Thanks for explaining it, guess a lot will be fed up, particularly as they were talking about the possible compensation of shareholders based on the independent review.
 
I think a large part of the public will misunderstand this transaction as well, and will be angry that the $5bn that a buyer might spend wasnt paid to the previous Anglo shareholders. But this isnt how it would have worked had someone bought anglo before nationalisation. A buyer would have paid only a cent or two, if anything, per share, and put in $5bn capital after the purchase. The bank was effectively insolvent and not worth anything - shareholders would have got nothing, or practically nothing, even if there had been a willing buyer of the bank before the government stepped in.[/quote]

It is important to destinguish between " the public" and " the shareholders".At this stage I think the public have had enough of the whole Anglo saga and would prefer if it was laid to rest in peace.In fact what they might be angry about is that this did not happen before the guarantee or the fact that the government included them in the guarantee and then decided to have a look at the bank.
In any case one has the question why this outfit have any interest in Anglo when they could easily buy one of the other "better banks" at current values.
Who is advising the government on this issue the same people who advised on the Guarantee? I would not have confidence in the capability of this government to make a deal with a group of venture capitalists who do this kind of thing for a living.
 
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