Private investors planning to use Genus’s (GNS:AIM) special one-off trading facility to sell their shares ahead of the move to the main market may be able to deal for a fixed fee of under £10. Such a rate, combined with a better spread, would certainly give even the cheapest execution-only broker a run for its money.
Last month, Genus announced it was to set up a facility to allow small shareholders holding shares for inheritance tax (IHT) purposes to exit cheaply. By buying back shares in bulk and placing them with fund managers the idea is to give small investors a good price by placing them with willing institutional buyers.
No detail has yet been given on the charges but Martin Boden, Genus finance director told Shares he has not ruled out a fixed fee of less than £10. Boden says he wants to ensure small investors who put money into the company for IHT purposes aren’t being disadvantaged by the move to the main market where IHT tax advantages are lost.
Genus offered a similar scheme last December, then the maximum size of holding to benefit from the scheme was 1,000 shares. But Charles Hall, analyst at joint broker Panmure Gordon, which is being tasked to run the facility, says an upper limit is yet to be set.
The facility will be run on similar lines to the December scheme. Then, the aim was to ‘restructure the share register’ by buying many of the dairy farmers who automatically got shares in Genus when it was spun out of the Milk Marketing Board. Those with under 1,000 shares could sell out for 20p a share with a maximum £30 dealing charge. This latest facility, however, is designed for the shareholders holding Genus for IHT.
It is put to Boden that many of these investors would have access to cheap internet dealing anyway and the flat fee would have to be under £10 to be worthwhile for them.
He says: ‘We are not ruling anything out, it could well be £10, it could be even less.’ He added the company is on course to make the move to the main market, which has been delayed, in October with the facility available in late September or early October.
