Disneyland Paris share value drops 20%

[chmurf]

TWDC will inject 1 billion euros into EuroDisney
part of it (600 million euros) to buy back part of the parks' debt (still 1 billion remaining)

shareholders are offered to buy 9 shares (per share held) at the price of 1€ per share with a buyback guarantee of 1€25 by TDWC

as a result the share price dropped 20% since "la bourse de paris" opened this morning

Information Medias here say that it's possible that TDWC intends on buying back the park and take ownership (takeover bid), and that the stock could be withdrawn from the market.

 

[cazspence]

I thought due to french laws they couldn't buy it out completely. Also due to the differing ownerships of different parts of the company. And they can't buy "back" what they have never owned.

 

[ThBa]

What do do next ?

Sell my shares which I bought some weeks ago ?

Keep them ?

I guess I´m not the only one who do not know what to do.

HELP

 

[gavvy]

Am wondering if we will be either forced into buying the new shares at a rate of 9:1 or selling our shares to TWDC. Its nit really clear to me.

 

[ThBa]

I guess this could be the end of the shareholder club ?

 

[cazspence]

Well they'll have to come find me. I'm not selling my shares for nobody!

 

[gavvy]

If its like the last share consolidation you have no option. They will either sell them or convert if you instruct. If you don't instruct then they get sold

This is if that's the case. And I'm not sure exactly if it is.

 

[cazspence]

If its like the last share consolidation you have no option. They will either sell them or convert if you instruct. If you don't instruct then they get sold This is if that's the case. And I'm not sure exactly if it is.

There is no share consolidation read on the shareholders site faq. Makes it more clear now.

My shares were worth 3.46 euros before the announcement, will my holding lose value?
The proposal allows shareholders to preserve economic value of their holding
The example below demonstrates how to preserve your economic value but is one of many options you have as a shareholder. You have time to review all your investment options as the transaction will occur in the first half of 2015.
If you want to guarantee the full value of shares at their pre-announcement share price, you would participate fully in the rights offering and then sell all your shares into the mandatory tender offer.
Pre-announcement: 1 share at €3.46
Post transaction: 1 existing share: to be sold at €1.25 (i.e. TERP) to TWDC in mandatory tender offer + 9 new shares: subscribed at €1.00 per share through full participation in the rights offering. Then sell all nine new shares at €1.25 to TWDC in the mandatory tender and realize €2.25 net value
= €1.25 + €2.25 = €3.50 i.e. slightly above pre announcement value

You have the flexibility to pursue a range of options—among them, to fully realize the value of your shares at their pre-announcement share price; to maintain your ownership percentage; or to make no new investment, realize any value from selling your subscription rights, and hold or sell your shares.

 

[cazspence]

See no investments and hold your current shares.

 

[chmurf]

Very basically

The value of EuroDisney on the stock exchange is 113 million euros

TWDC injects 1 billion euros, so roughly 10 times the "value" of Eurodisney
here we have one of the reasons why shareholders will be allowed to buy new shares with a 9 for 1 ratio. This is to avoid a dilution.
As a result, TDWC will need to perform a takeover bid.

the outcome will most probably be that the stock will be withdrawn from the market (it's often admitted that putting the stock on the market was a tragic error in the first place)

anyway this will only happen first quarter of 2015

 

[gavvy]

So its goodbye shares? Goodbye shareholders club :-(

 

[chmurf]

So its goodbye shares? Goodbye shareholders club :-(

a lot of shareholders hold just as many shares as required to enter the shareholder's club
they mainly do it for the benefits and perks.

so many small holders are a PITA for a company like eurodisney. TDWC seems to want to get rid of as many smaller shareholders as possible.


currently, you'll keep your shareholder's club benefits until your shareholder's club card expires, then ... there might be new requirements (meaning holding more shares to qualify for the club)

that means that muffins and cupcakes at café mickey will soon become more expensive than they used to be

The parks need to cut costs. As a result, gate prices went up, AP benefits went down. So now the next thing is to require more from shareholders to access the club's perks

ultimately, there will be a mandatory public tender offer (or compulsory takeover bid ... sorry I'm not an expert financial analyst in French, I'm even less so in English )

TDWC seem to want to give incentives for shareholders either to withdraw, or to consolidate their stocks.

 

[ThBa]

Then I guess I could be glad that my (re-)new shareholder card will arrive me soon ?

 

[Lisa_C]

We've not used Salon Mickey for two years now and haven't missed it once since we bought our AP's.

 

[gavvy]

Reading the FAQs I don't think it is the end if the club... it states it will remain but new criteria will apply for new applicants. Makes me think I won't have to sell my shares. Though if I don't do something with them they will loose 1/3 of their value

 

[Jonjo]

With this consolidate of stock I can see a few things happening. A lot of small Euro Disney shareholders will give up owning shares. It's not worth it for them to invest in a company that keeps posting loss after loss with no return in their investent.

I think the Shareholders Club would stay but with membership increasing to 500 or 1,000 shares. But with a loop hole for exisiting shareholders that held 100 or more before today's annoucement.

For those that sold their shares in 2011 when the share price hit 9 euros, it worked out to be a good investment. For those that have been through this before we know we have probably lost money on our investment, but these have been made back on the savings we have made when visiting the park.

Today the share price dropped at opening but is now sitting at 3 euros (2PM) and might recover to where they were on Friday.

I think alot of small investors will not be voting on this offer at the share price TWDC has offered, the company has been is undervalued and I expect they would like to see more than the and nine shares and 1.25 offered.

All this recapitalization proposal does is push the problem to 2024, if DLP does not do somthing radical within the next 10 years, I can see the resort being in the same situation again.

I've never thought that being a Euro Disney shareholder is a wise investment, but as a fan and someone who goes to the resort regualy the shareholder discount made it a worth while investment for us. We have easly made back our investment in our shares with the discounts we have received during our visits since 2005. I think we are in profit, those 15% and 10% discounts here and there add up.

And as I look at the share price again now at 2.25pm it is up to 3.13 euros so it is recovering, slowly but it's geting back to where it was.

 

[meryll83]

I only hold the minimum amount of shares to get the Club perks - so at present am I right in thinking there's nothing I need to do (as I'm not bothered about their value) until such a time they might announce changes to Club membership?

Sent from my iPhone using DISBoards

 

[netimka]

thanks for everyone comments I just hope we will wont have to sell shares if we dont want to, shame if the price go down but I just want to have my little piece of magic

 

[eeyorefanuk]

I only hold the minimum amount of shares to get the Club perks - so at present am I right in thinking there's nothing I need to do (as I'm not bothered about their value) until such a time they might announce changes to Club membership?

Sent from my iPhone using DISBoards

I would like to know this

 

[Twinkbelle]

My shareholder card is up for renewal at the moment. I need to purchase another 80 shares to stay in the club as I was just under the wire when they last increased the number of shares needed to stay in. I really don't know if its worth purchasing more now or waiting. If I wait, I'll be out of the club so I would then fall under the new agreement for joining - whatever that might be! Which I would imagine will involve buying way more shares then I can afford!!!