Shareholder Rewards

[Deej]

Some companies offer more than dividends and the opportunity for capital growth to keep shareholders happy. They do this with da Shareholder perks! Shareholder rewards have always been a great way for a company to generate customer loyalty... and of course a bit of extra turnover from the very people who own them - “its good business to spend where you earn” said the back of my teenage Kmart job’s pay packet.

A few companies have them, so lets get a list together on who has the most interesting, useful, or usless at the moment.

When providing details, try to provide a link to the investor relations rewards section on the website of the company you are talking about if you can so if anyone is interested they can do some reading.

[Deej]

To get started, NetComm (half of us prob have one of their modems or routers) give a 40% discount to any shareholder on any of their products. They supply to shareholders directly and there is no minimum holding.

Details here: Share Holders: NetComm Australia and then click the “Shareholder Advantages” tab just below the Top 20.

ASX Code: NTC, last sale $0.165

It's a midget cap so a marketable parcel will prob buy you oh.... about 21% of the company so expect to have to make a G.O. and lodge an initial substantial holder notice! hehe

[richie_b]

Not really shareholder rewards but a friend told me a while ago about a partially protected share deal with wesfarmers for WESN shares that were introduced when wesfarmers bought out coles.

I just looked it up again

WES - Wesfarmers Limited [Archive] - Aussie Stock Forums

Can anyone suggest why the Wesfarmers Partiallly Protected Shares (WESN) are trading only marginally above, or even sometimes at a discount to, the Wesfarmers Ordinary Shares (WES). For instance, today they closed at a discount: WES = $29.28 and WESN = $29.11.

Considering that WESN have exactly the same entitlements as WES in every respect (dividends, voting rights etc.), can be converted at the option of the shareholder to WES shares at anytime at no cost, but additionally have a variable degree of price protection when WES is trading under $43.92, they should command a substantial premium IMO. These are the key terms:

If the two month VWAP for Wesfarmers Ordinary Shares is greater than $35.14 but less than $43.92 at the date of the Lapse Notice, holders of Wesfarmers PPS will receive a bonus issue of Wesfarmers Ordinary Shares (up to 0.25 Wesfarmers Ordinary Shares per Wesfarmers PPS) such that the total value of Wesfarmers Ordinary Shares received will be $43.92. If the two month VWAP for Wesfarmers Ordinary Shares is greater than $43.92, holders of Wesfarmers PPS will not receive any bonus issue.

However, if the two month VWAP for Wesfarmers Ordinary Shares is below $35.14 on the date of the Lapse Notice there is no additional price protection and Wesfarmers PPS Holders will receive the maximum bonus issue of 0.25 Wesfarmers Ordinary Shares per Wesfarmers PPS.

As I read the above and it corresponds to the examples in the prospectus, you are guaranteed a minimum $43.92 in WES shares for each WESN at the lapse date when WES is between $35.14 and $43.92. When WES is trading under $35.14 then you will get 1.25 WES for each WESN at lapse date conversion. So at today's closing price of $29.28 for WES (assuming that at conversion time that was the two month VWAP for WES) each WESN would convert to 1.25 WES, or $36.60 in share value. Yet it is only commanding $29.11 in the market.

I don't understand why it doesn't command a premium of 25% of the WES price, when WES is trading under $35.14 and a gradually reducing premium when WES is above $35.14, cutting out when WES reached $43.92.

The Lapse Date is about 4 years following the WESN issue (so 3.5 years from now) and may be extended if the ASX200 index sits under 6,500 around that time. So there is a timing issue, but that should be immaterial to the premium it should command. The only clause in the Ts&Cs that worries me is the following, but I can't see how that might override the conversion terms mentioned above.

In the event that additional shares are issued in respect of Wesfarmers PPS, the total number of additional shares to be issued will be up to approximately 38.5 million Wesfarmers Ordinary Shares.

As WESN are currently trading at 9c above ordinary WES shares (and sometimes are even nearer), I'd say they are a good buy, but as always do your research.

[JiggyJigs]

When Strike Oil take over the world I'm hoping to get cheap gas and electricity from them.

Dave