My father held several shares in the Permanent TSB bank. Upon his death, ownership of these shares passed on to me, however, we never succeeded in altering the identity of the shareholder. Yet the institution seeks to offload these shares and I am not opposed to this. But, might this raise an issue given the shares are still registered under my father’s name? If so, what steps should I take and will I have scope to complete them before the opportunity concludes? Although the finances concerned are minimal, rectifying this minor facet of my father’s matters would be beneficial.
Mrs S.B.,
PTSB, as it has come to be known, is one of two credit providers aiming to streamline their list of shareholders, providing them with an opportunity to shut down what has been a disastrous financial venture.
The “odd-lot” scheme proposed by PTSB, will result in PTSB acquiring the holdings of any shareholder possessing fewer than a hundred shares in the company. This will likely impact more investors than anticipated, given the stock reconstruction of 2015 which yielded just one share for each previous hundred.
This rearrangement was mandated due to plummeting investor earnings following the financial crisis, and the subsequent €4 billion rescue package provided to PTSB by the Irish government.
This scheme could include you if you held as many as 9,900 shares in Permanent TSB in 2015, leaving you with only 99 at present.
This becomes particularly significant for those who were part of the former Irish Permanent Building Society. During its demutualisation in 1994, members were allotted a certain amount of shares in the newly listed business. The size of this allocation depended on their account type, resulting in each member receiving either 300, 315 or 330 complimentary shares.
In the aftermath of the 2015 stock reconfiguration, these early shareholders found themselves with a paltry three to four shares left in the bank.
This forms the crux of your trouble. As of last week, each PTSB share costs €1.66. Therefore, a stake of three or four shares would amount to €4.98 or €6.64 respectively. My assumption, based on your letter, is that you belong to this bracket of shareholders.
Due to prohibitive trading costs, thousands of minor shareholders are essentially trapped, unable to sell their holdings, in their current investment situation. This has been highlighted by PTSB, who have identified that they have an unusually large number of shareholders, 129,000, for a company of their size.
The odd-lot offer, which is anticipated to decrease the bank’s administrative expenses related to managing such a vast number of minor shareholders, will also liberate these shareholders. It is expected that this will also reduce costs associated with smaller tasks such as distributing large quantities of annual reports and voting forms.
Unless you choose to decline the offer before midday on October 4th, which is not advised, the bank plans to automatically repurchase your shares at a rate of €1.74 per share, without incurring stockbroking fees. This means that those who hold three or four shares can expect a return of either €5.22 or €6.96.
Through this process, the bank has pledged a premium of 5% on shares, benchmarked against the average share price over the five trading days leading up to September 6th. Even though the return is modest, the incentive in this situation is the absence of brokerage fees.
The owed money will be dispatched through the post via cheque, however, any shares held in a different individual’s name will result in the cheque being sent to them, at the last registered address. To prevent this from happening, shareholders will need to contact Link Registrars, the company responsible for the PTSB share register. This can be done by either calling them on 01 5260116, or writing an email to enquiries@linkgroup.ie with ‘PTSB Odd-Lot Offer’ in the subject line, to transfer shares into their own name.
Endeavor to obtain a duplicate of your dad’s death certificate along with the probate’s copy to instigate the necessary amendments. If the paperwork isn’t sorted prior to the cheques’ issuance date (21st October), the bank has assured of reissuing the cheque bearing the appropriate name, without incurring any further costs. However, bear in mind that this segment is purely an avenue for reader services and doesn’t aim to supplant specialised guidance.