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Value of ESOP Shares

  • 01-08-2012 8:48pm
    #1
    Registered Users Posts: 399 ✭✭ solas111


    How would I value ESOP shares that are about to be traded for the first time on an internal company market? The market is open for only one day per year.

    Should I buy or sell?


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Comments

  • Registered Users Posts: 1,258 ✭✭✭ 00sully


    solas111 wrote: »
    How would I value ESOP shares that are about to be traded for the first time on an internal company market? The market is open for only one day per year.

    Should I buy or sell?

    hah - buy or sell and at what price more interestingly ;) if you sell, you only get the average of all shares sold (if at all - you can be left with your entire allocation is my understanding if your auction price fails to be met by bidders)

    it is certainly an "interesting" auction put forward by ESOP. I am in the same boat and am pretty clueless about what to do.

    I've attached the scenario they put forward for this. Thing is, what if ESB goes public and then sells assets and the likes? The auction seems very weird to me. Can anyone offer an insight to what is going on here?

    it all seems like a gamble to me. I guess we'll see on auction day. You'll know if all the shares are snapped up that something is going on. bear in mind, people like me who have left HAVE to sell within 6 years (unless it goes public). After 3 auctions our shares are automatically put up for auction and no reserve price for staff to choose so essentially they will be worthless at this time.

    215530.jpg


  • Registered Users Posts: 399 ✭✭ solas111


    Hello 00sully,

    Thanks for your reply. It is likely that I too will be moving into the Forced Sellers category by the end of the year. The amazing thing is that nobody seems to have a clue about what will happen with these ESOP shares on market day. Maybe that should not be a big surprise since the people who run the country haven’t a clue about what they’re doing from day to day.

    I would imagine that the ESB ESOP model is based on something that is tried and tested elsewhere so there must be some historical data that could be used to try and make a reasonable guess about the likely market value of the shares. I cannot find anything useful on the net but maybe that there are people on this forum who have access to such data.

    In my opinion ESB will without a doubt be privatised because the gob-****es in Kildare Street would sell their own mothers if the price was right or if the Troika said it was a good idea. However, the sale probably won’t happen for a while yet for several reasons:

    • Few would want to pay a fair market value for the company with money being so scarce around the world.
    • The Labour Party shower has to pretend that they’re looking after the interests of the unfortunates who elected them.
    • ESB are going to try and bring down the earnings of their employees to the same level as their competitors, starting with a reduction of about 20% through the PEP Interlocking process.

    Therefore, it is doubtful if there will be any privatisation bonus for those of us who are Forced Sellers and the only questions are should the shares be sold now or next year and at what price?

    I might sell a few this year and buy a good portable engine-driven generator because I can see a lot of dark nights ahead as the fraudsters come in at the invitation of our ‘brown envelope brigade’ and turn a company with huge potential into another Eircom.


  • Registered Users Posts: 1,788 ✭✭✭ Cute Hoor


    This may be a little simplistic, but what is the company worth, I've seen/heard €3/€4bn and others, €4bn was the value put on it last year by Colm McCarthy (for what that's worth). There are 1,979,882 units of stock (as per the annual report), so in theory that should value each share at €2.02 (I think) taking the €4bn valuation. The company value will depend of course on market conditions at any given time, and another issue you will have to deal with is the willingness of buyers (in an internal market) to pay a fair price. If you know of anybody in Eircom (a once fine company raped and pillaged imo by an eclectic mix of chancers) then they may be able to help ye. Best of luck on yere little windfall!!

    Edit: Of course the units of stock above should read 1,979,882,000 and not 1,979,882 as stated above


  • Registered Users Posts: 9 ✭✭✭ mickey2012


    Hi any idea of the value per share is yet? clueless here on what price to put down, can anyone help (Sorry Cute Hoor just seen your post Thanks).

    Michelle


  • Registered Users Posts: 399 ✭✭ solas111


    Still very much in the dark about the potential market value of the shares. A colleague reckons that it would be a bad time to sell as many of the ones who are leaving will be off-loading their shares at the first opportunity.

    There was an interesting article about the ESOP shares in the Sunday Business Post about a week ago but putting a value on the shares is about as difficult as getting a sensible response from the people who run the PIP scheme.


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  • Registered Users Posts: 159 ✭✭ Crimson125


    Hi All,

    I'm helping out a relative with this at the moment given the deadline is tomorrow for sale forms.

    On the FAQ on the ESOP site, it says the following :


    Q21. How much are my shares worth? A: Beneficiaries are unable to sell notionally allocated shares and this means that it is not possible to provide a valuation of the shares at this time.



    A formal valuation of the shares will take place at, but not before, appropriation. You should, however, be aware that the value at appropriation may not be the value you receive when the shares are sold on the internal market.





    Is this information available anywhere ? I understand that the appropriation took place earlier in 2012, so that info must now be available ?


    Valuing at €2.02 & a number of years of Potential future Dividends seems to make sense, though it really all is a black hole of mystery the way it works isn't it !


  • Registered Users Posts: 159 ✭✭ Crimson125


    Cute Hoor wrote: »
    This may be a little simplistic, but what is the company worth, I've seen/heard €3/€4bn and others, €4bn was the value put on it last year by Colm McCarthy (for what that's worth). There are 1,979,882 units of stock (as per the annual report), so in theory that should value each share at €2.02 (I think) taking the €4bn valuation. The company value will depend of course on market conditions at any given time, and another issue you will have to deal with is the willingness of buyers (in an internal market) to pay a fair price. If you know of anybody in Eircom (a once fine company raped and pillaged imo by an eclectic mix of chancers) then they may be able to help ye. Best of luck on yere little windfall!!

    Edit: Of course the units of stock above should read 1,979,882,000 and not 1,979,882 as stated above

    it would seem that the companies performance has been increasing year on year and that McCarthy figure is based on 2009. While there were some heavy increases year on year in 06,07 and 08, some years 25%, it's not a dying market and it's safe to say there has been an increase in value since 2009 maybe ?

    That would put it in the region of 3.5bn to 4.5bn / 5bn perhaps.


  • Registered Users Posts: 399 ✭✭ solas111


    Crimson125 wrote: »
    Hi All,

    I'm helping out a relative with this at the moment given the deadline is tomorrow for sale forms.

    On the FAQ on the ESOP site, it says the following :


    Q21. How much are my shares worth? A: Beneficiaries are unable to sell notionally allocated shares and this means that it is not possible to provide a valuation of the shares at this time.



    A formal valuation of the shares will take place at, but not before, appropriation. You should, however, be aware that the value at appropriation may not be the value you receive when the shares are sold on the internal market.





    Is this information available anywhere ? I understand that the appropriation took place earlier in 2012, so that info must now be available ?


    Valuing at €2.02 & a number of years of Potential future Dividends seems to make sense, though it really all is a black hole of mystery the way it works isn't it !


    "ESOP Appropriation
    Frequently Asked Questions

    Q. Is the appropriation value the same as the price I will receive when I sell my shares?

    A. No. The price you receive when you sell your shares will be determined by the internal market at the time you sell.
    The appropriation value does, however, become the locked-in base cost for capital gains tax (CGT) purposes, with potential CGT based on any difference between the appropriation value and the sale price."

    The appropriation price is a figure that was agreed with the Revenue Commissioners for tax purposes and is probably not a good guide as to the market value of the shares.

    From ESOP Trustees Ltd. 2 May 2012:
    "The appropriation value agreed with Revenue is €1.05 per share. This is based on a valuation of the 5% ESOP shareholding and is not a valuation of the ESB Group."

    As the ESB ESOP is not the only one in the world there must be information available from other schemes regarding the value of shares. However, I do not know where you would find such data.


  • Registered Users Posts: 223 ✭✭ wiilow74


    Anyone hear anything about the internal market today ie. the value that shares sold at ? Thanks


  • Registered Users Posts: 399 ✭✭ solas111


    wiilow74 wrote: »
    Anyone hear anything about the internal market today ie. the value that shares sold at ? Thanks

    The ESOP share price will not be disclosed until Monday of next week. Check the ESB website on Monday evening for details.


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  • Registered Users Posts: 6 ✭✭✭ Comah11


    Got email from esop this afternoon, details will be on their website Monday.

    Comah11


  • Registered Users Posts: 223 ✭✭ wiilow74


    Thanks .


  • Registered Users Posts: 1,788 ✭✭✭ Cute Hoor


    Crimson125 wrote: »
    it would seem that the companies performance has been increasing year on year and that McCarthy figure is based on 2009. While there were some heavy increases year on year in 06,07 and 08, some years 25%, it's not a dying market and it's safe to say there has been an increase in value since 2009 maybe ?

    That would put it in the region of 3.5bn to 4.5bn / 5bn perhaps.

    The former CE put a value on the company earlier on this year/late last year of €6bn (one might say he would, wouldn't he), which would value the shares at €3.05 approx.

    I heard on the grapevine yesterday that the average bid price was 70c, probably just pub talk but ye will find out on Monday I guess. Good luck with them!


  • Registered Users Posts: 223 ✭✭ wiilow74


    Cute Hoor wrote: »
    The former CE put a value on the company earlier on this year/late last year of €6bn (one might say he would, wouldn't he), which would value the shares at €3.05 approx.

    I heard on the grapevine yesterday that the average bid price was 70c, probably just pub talk but ye will find out on Monday I guess. Good luck with them!


    Hope that turns out to be just pub talk ,still won't matter much to me , that's below my minimum price anyways .......we shall see Monday I suppose ;)


  • Registered Users Posts: 223 ✭✭ wiilow74


    Checked ESOP website but no word on it about share price , anyone heard anything today ?


  • Registered Users Posts: 223 ✭✭ wiilow74


    Comah11 wrote: »
    Got email from esop this afternoon, details will be on their website Monday.

    Comah11


    Nothing on ESOP website yet , did the email say they would definately give details on website today or send the details by email ? Tks


  • Registered Users Posts: 1,309 ✭✭✭ Technoprisoner


    have to admit this system seems very very confusing. My father asked me for advice and i couldnt offer him any. I will keep an eye on this thread to see if anyone else can figure it out eventually lol


  • Registered Users Posts: 6 ✭✭✭ Comah11


    Spoke with gentleman who said there was no information today(4pm)and they would be issuing statement tomorrow. I assume it will be on website.


  • Registered Users Posts: 1,309 ✭✭✭ Technoprisoner


    i was just thinking about this....and would it not be in the best intrest of those who can purchase shares to pay a very good price for them. that would mean the value of the shares they already have would be worth more


  • Registered Users Posts: 9 ✭✭✭ mickey2012


    I checked the ESOP Website but nothing on it yet, anymore update on the shares?


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  • Registered Users Posts: 223 ✭✭ wiilow74


    mickey2012 wrote: »
    I checked the ESOP Website but nothing on it yet, anymore update on the shares?

    Emailed the ESOP crowd yesterday , got reply this morning saying that the information isn't available yet as the market hasn't been completed yet but as soon as it comes through the information will be posted on the ESOP website .

    Hard to know what's going on :confused:


  • Registered Users Posts: 1,258 ✭✭✭ 00sully


    wiilow74 wrote: »
    Emailed the ESOP crowd yesterday , got reply this morning saying that the information isn't available yet as the market hasn't been completed yet but as soon as it comes through the information will be posted on the ESOP website .

    Hard to know what's going on :confused:

    the market crashed! :pac:

    I'd be surprised if anyone bidded any reasonable amount for these shares tbh it's too difficult to know how much they might be worth. There is the suspicion that they want to be snapped up for cheap from the people forced to sell though :eek:


  • Registered Users Posts: 5 pokerseamie


    its not confusion its collusion


  • Registered Users Posts: 1,258 ✭✭✭ 00sully


    €1 per share my source tells me :D I went in at 95c so I think mine all are shipped now


  • Registered Users Posts: 223 ✭✭ wiilow74


    00sully wrote: »
    €1 per share my source tells me :D I went in at 95c so I think mine all are shipped now


    Announcement is on the ESOP website now and your"source" was correct the shares sold for €1 each ........mine will be on the way back as that was below my minimum , €1 ain't a great starting price is it ? They could be less again next year :( .
    Good luck to any of ye that sold a few anyways ;)


  • Registered Users Posts: 9 ✭✭✭ mickey2012


    thanks willow, crazy price


  • Registered Users Posts: 5 pokerseamie


    cannot see anything on esop website about share price. what do i type in to get correct website...


  • Registered Users Posts: 162 ✭✭ waldo


    http://www.esbesop.ie/Market%20Results%20Announcement%2025%20September%202012.pdf

    "PricewaterhouseCoopers (PwC), the Internal Market Administrator, has advised the Trustee that the weighted average successful bid price was €1.00 per share (the Market Price) and this is the price that will be paid to all successful sellers"

    It's a weighted average, so some bidders paid more, some less than €1.00.


  • Registered Users Posts: 5 pokerseamie


    thanks waldo.....


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  • Registered Users Posts: 5 pokerseamie


    shares priced at what minium price will be sold. anyone know..


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