CHESNARA

This has a dreadful chart for last few months.
Didnt know why.
But it appears that USB has disposed of 4.2million over recent period which I think probably accounts for depressed 2 mths.

Strong points are its projected yield of 8.67% .
Peg of .36 and projected Peg of .29
Projected Profit 50% rise.

I have held these from about 98 before disposing of them at about 170 and re-buying some at 169 and 155 and 158 after recent drop on 31/102005 when it dropped probably due to USB sell..
Also bought some CFDs

My guess is that it is going to recover fairly sharply.

BDYOH

Yes indeed and paying a rather attractive 2.38% as at last week, but beware it can take a time to recover SP.

Stan - we've been here before! :-)

Ahh yes I remember now -):

.

Proposed acquisition of Direct Line Life by Chesnara

Chesnara Plc ("Chesnara") is pleased to announce that it has entered into an agreement to acquire the entire issued share capital of Direct Line Life Insurance Company Limited ("Direct Line Life"), from Direct Line Insurance Group Plc ("Direct Line Group"), for a total consideration of £39.3 million, payable in cash on completion (the "Acquisition"). The Acquisition will be financed from a combination of existing cash resources and a new bank facility.

Direct Line Life is a UK-based life insurance company and wholly-owned subsidiary of Direct Line Group. It became substantially closed to new business on 5 July 2011 and has been focused since then on managing the existing portfolio in line with the run-off plan agreed at the time with the then FSA. Prior to closure to new business, Direct Line Life predominantly offered non-linked products including mortgage life cover, fixed term life cover (both with and without critical illness cover) and over 50's life cover to UK customers distributed under both its own brand and also in recent years, but before the closure to new business, on a white label basis.

Direct Line Life is being acquired at an effective 74.7 per cent. of Chesnara Directors' estimate of the residual embedded value of £52.6 million as at 30 June 2013, adjusted to reflect a capital extraction of £23.0 million by the seller immediately at completion.

The effect of this capital extraction is that Chesnara will acquire the business with a lower solvency margin than its long term target of 150%, and will therefore immediately on completion inject capital, estimated at £10.4 million. This increased funding requirement is temporary and is expected to be released by way of a Part VII transfer of Direct Line Life into Chesnara's existing UK life book, Countrywide Assured Plc, by the end of 2014.

As part of the Acquisition, Chesnara has agreed a new loan facility with The Royal Bank of Scotland plc of £73.8 million. This is made up of two facilities. The first facility is divided into two tranches. Tranche A of the first facility will be used to refinance some £30 million of Chesnara's existing outstanding bank debt and Tranche B, which is in the amount of £31 million, will be used to finance part of the consideration for the Acquisition. The second facility will be used to provide short term funding of £12.8 million in relation to the capital extraction described above (the second facility will be repaid at the latest by 30 June 2015).

Chesnara has a clear objective to make strategic acquisitions in the life assurance sector and in particular in its core UK life operations. Chesnara is experienced in managing closed UK life books and Direct Line Life will be an attractive complementary addition. The Acquisition is expected to have a positive impact on the embedded value and cash generation ability of Chesnara in the medium term once integrated.

In the financial year ended 31 December 2012, Direct Line Life had an operating profit before tax of £9.4 million, reported a profit for the period after tax of £6.9 million and had gross assets of £177.6 million. Direct Line Life had approximately 150,000 policies in force as at 31 July 2013. The results of Direct Line Life will be presented using Chesnara's accounting policies in the circular to be sent to shareholders (as noted below).

Following completion, Chesnara intends to transfer the administration role to HCL (one of Chesnara's current outsourcing partners). Management intends to focus on realising potential synergies when they might be available, such as combining the underlying life companies of the enlarged group by means of a transfer pursuant to the provisions of Part VII of FSMA 2000.

The Acquisition is subject to approval from the Prudential Regulation Authority ("PRA"). The Acquisition is a Class 1 transaction for Chesnara under the Listing Rules and is conditional on the approval of Chesnara shareholders at a general meeting, notice of which will be included in a circular to be sent to shareholders shortly.

Interesting... Very interesting.

On the move now.

3rd Quarter Interim Management Statement

Another strong quarter. Good operational profits build upon strong investment market performance.


· Recently announced acquisition of Direct Line Life received shareholder approval on 7 November 2013 and is expected, subject to regulatory approval, to complete by the end of the year.

· Increase in EEV to £354.0m at 30 September 2013 from £311.1m at 31 December 2012. This increase includes net of tax profit of £55.0m less dividends paid of £12.9m in the period.

· EEV pre-tax profit of £57.5m (excluding modelling adjustments and exchange rate impacts) for the nine months ended 30 September 2013 (nine months ended 30 September 2012: £29.5m), of which £44.8m has emerged as a direct result of investment market performance.

· Shareholder equity on an EEV basis of 308.2p per share. This represents an increase of 37.4p per share (after recognising dividend payments of 11.25p per share) since the start of the year.

· Strong net cash generation of £30.2m for the nine months ended 30 September 2013 (nine months ended 30 September 2012: £35.1m). The 2012 cash generation included a £7.0m one-off benefit arising from the deregulation of the S&P businesses.

· IFRS pre-tax profit of £32.8m for the nine months ended 30 September 2013 (nine months ended 30 September 2012: £20.1m) is underpinned by strong UK product-based deductions amounting to £33.5m in the period (nine months to 30 September 2012: £32.4m).

· A £12.9m release in the provision for S&P policy guarantees has contributed to the IFRS result, reflecting the positive impact of equity market growth and increases in bond yields in the period.

· Solvency ratios as at 30 September 2013 remain strong, with Group at 240% (31 December 2012: 244%), CA at 272% (31 December 2012: 199%) and Movestic at 320% (31 December 2012: 280%).

· Movestic generated £14.8m of EEV pre-tax profit (excluding modelling adjustments and exchange rate impacts) in the nine months ended 30 September 2013 (nine months ended 30 September 2012: profit of £7.9m), primarily due to growth in Swedish equity markets.

· Improving IFA support for Movestic has resulted in a 55% increase in Pensions and Savings new business premium income compared with the first nine months of 2012.

· Movestic generated £3.3m of new business profit in the nine month period to 30 September 2013 (nine months ended 30 September 2012: £1.3m).

· Additional acquisition opportunities continue to be examined.

Canaccord Genuity Hold 298.00 300.00 300.00 Reiterates

Always worth watching this one IMHO.

Off to a flier.

Yeah, Up 5% so far, when she goes she does go.

Rise due to IC tip. Have held these for a few years. The best income stock I ever brought. Bearbull of the IC sold them from his income portfolio a couple of years back as they went over his stock loss. Bad decision should be flexible in all things.

Up strongly again today, but looking very overstretched. I won't expect another day like this tomorrow - but I am prepared to be surprised :-)

Why this drop? There seems to be no bad news. Any thoughts folks?

Nothing obvious - results on the 28th.

Chance to top up maybe.

Is this the budget fall out? Any views folks? Still a good divi though.

No idea, parrisf. That closing auction was a real bummer. Looks like someone wanted out very quickly and wasn't worried about price. I know of no fundamental reason for the fall - yet. Let's hope there are no nasty surprises lurking in the results.

My thoughts exactly. Might be best to run on Monday. Thanks LG.