Banco Santander share issue con?

opinions4u

sabretoothtigger wrote: »

The hbos shares werent at a discount to the share price, it had allready fallen once to 2.50 when the offer was given and the sub prime santander has is through purchases of subsidiaries.

At the time of announcing the rights issue, HBOS shares were 508p. They dropped to below the rights price in the period between announcement and execution.

It doesn't matter whether Santander had its own sub-prime problems or subsequently bought them in. Abbey took a rather large mortgage market share last year and this year. Alliance & Leicester profits were wiped out prior to their forced takeover.

sabretoothtigger

It does matter because a&l bad debt represents a smaller more manageable percentage on their balance sheet.
I think its main drag is the american/toxic bank it bought because that was fairly large (in debt 'assets') hence the money raising.
I agree they also have a large amount of normal mortgage debt in a falling market


Hbos took months to do the rights and apparently santander will be fairly immediate, so I was just pointing out the discount was still valid unlike what happened to hbos, rights were issued at a price above a recent low

sabretoothtigger

I do remember now reading about this was purely rights only but didnt understand they were able to stop people using them. Here is a reminder

Banco Santander has notified 1.8m retail shareholders in the UK that they will not be able to take part in its deeply discounted rights issue. Instead, their rights will be sold for cash.

The rights are quoted and their value should equal the difference between the new share issue price of E4.5 and the market price of the shares. Four rights give an existing shareholder the right to buy one Santander share at E4.5. The UK retail shareholders also will be given another opportunity to buy shares at the market rate in December.

Santander said the acceptance period for rights issues in Spain is 15 days, which it said was too short a time to logistically include the UK shareholders.

http://www.breakingviews.com/2008/11/20/Santander.aspx?email

TonyH1_2

Broadback wrote: »

Just received a letter from Santander telling me that the have had a share issue, however because of the time issues they have imposed there will be no opportunity for me to take up my options. They will sell them on the market and I will receive any profits less certain costs. How likely is that! It is certainly unfair that they can dilute my holding like that, I wonder if it would be legal for a UK company to act like this? Like many others in the UK I own these shares through having had Abbey National ones. Am I being unreasonable at thinking this is a bit of a con? In the future not only will I steer clear of non UK banks but companies as well.

Likewise a family member had been left similar shares and received the same letter. 200 shares had previously been valued at about £1600, they were sold through the rights issue at about 0.3euros each, hence we received a cheque today for ~£60. Yet the share price today seems to be over £5 each. What on earth is going on ?

TonyH1_2

TonyH1 wrote: »

Likewise a family member had been left similar shares and received the same letter. 200 shares had previously been valued at about £1600, they were sold through the rights issue at about 0.3euros each, hence we received a cheque today for ~£60. Yet the share price today seems to be over £5 each. What on earth is going on ?

Ok, think I understand things a bit better now. So it wasn't the shares that were sold at all, just the "rights" to buy new shares.
Knowing nothing about how this works, I didn't even realise that such "rights" were saleable commodities. So, you now have a couple of weeks to buy these rights which you're entitled to, to enable you to buy more shares, at a discounted price, if you wish.

From what I've read it looks like Santander are actually in a strong position, being able to raise their own extra capital which it seems they've easily done, without having to go begging to any Goverment.

charlies_mum

Sorry if I am being thick, but I have just received a cheque for £26.37, and from reading all the paperwork, I am still not sure what is going on.

I own 100 shares, and hope it is as the previous poster mentioned, and it is just my right to buy more shares that I have been paid for and not the shares themselves

mrposhman

charlies_mum wrote: »

Sorry if I am being thick, but I have just received a cheque for £26.37, and from reading all the paperwork, I am still not sure what is going on.

I own 100 shares, and hope it is as the previous poster mentioned, and it is just my right to buy more shares that I have been paid for and not the shares themselves

It is only your rights. Theres no way they would sell your shares for 26p each.

basically, they are selling the rights to other parties who then take up the rights meaning that these parties pay slightly more to buy these shares than the offer price, hence the reason why its so much lower than the £5 or whatever they are worth.

I've had the letter and whilst not all that happy with it, I wasn't going to invest in Santander anyway.

Bogof_Babe

Well I was delighted to receive an unexpected cheque for £105 today, once I'd worked out what it was all about. :beer:

bo_drinker

charlies_mum wrote: »

Sorry if I am being thick, but I have just received a cheque for £26.37, and from reading all the paperwork, I am still not sure what is going on.

I own 100 shares, and hope it is as the previous poster mentioned, and it is just my right to buy more shares that I have been paid for and not the shares themselves

Same here my o h received a cheque today for £21.89....... Is that it. When A & L were going the shares were around 1200 at the peak. What she has received is a joke.

sabretoothtigger

Your Shares have not been sold.


Your rights to buy more shares have been sold, this is the cheque