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Lloyds

Ok,I hold shares in Lloyds at the moment,but I am wondering whether I would beable to purchase in the open offer at 38p on the 8th May, if I was to sell my current holding?
Or is it only available to those who hold shares at that point?

Is there any process I need to go through?

And,with the shares being at 84p (at time of writing),how would that affect the share price?
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Comments

  • mrposhman
    mrposhman Posts: 749 Forumite
    Where have you got the 8th May from?

    If you sold your holdings without knowing what the record date is, you won't know whether you can buy or not.

    Do you have an online broker? If so there will be a corporate action notification when the details are released which you will need to respond to if you want to take up any of your allowance.
  • mrposhman wrote: »
    Where have you got the 8th May from?

    If you sold your holdings without knowing what the record date is, you won't know whether you can buy or not.

    Do you have an online broker? If so there will be a corporate action notification when the details are released which you will need to respond to if you want to take up any of your allowance.

    sorry about the 8th May bit,it appears that is the 1 for 40 shares instead of a dividend.:o

    Here,I found what I was on about:
    Capital restructuring – replacement of existing preference shares
    The Group has today agreed with HM Treasury that on implementation of the Asset Protection Scheme the £4 billion of preference shares HM Treasury holds (together with accrued dividends) will be replaced with new ordinary shares. Eligible Lloyds Banking Group plc ordinary shareholders (Shareholders) will be able to apply to subscribe for approximately £4 billion of new ordinary shares pro rata to their existing shareholdings at a fixed price of 38.43 pence per share. This represents an 8.5 per cent discount to the closing price on 6 March 2009. These new ordinary shares will be offered to Shareholders and new investors on the same basis as the Placing and Open Offer in November 2008. The ordinary share offer is fully underwritten by HM Treasury on substantially the same fee basis as the Placing and Open Offer conducted in November 2008. There will be an excess application facility as in November pursuant to which Shareholders may apply for additional new shares in the ordinary share offer. The proceeds of the issue will be used to redeem the preference shares held by HM Treasury.
    So when does that take place?
    http://www.lloydsbankinggroup.com/media/pdfs/investors/2009/2009Mar7_LBG_Asset_Protection_Scheme.pdf
  • mrposhman
    mrposhman Posts: 749 Forumite
    sorry about the 8th May bit,it appears that is the 1 for 40 shares instead of a dividend.:o

    Here,I found what I was on about:
    Capital restructuring – replacement of existing preference shares
    The Group has today agreed with HM Treasury that on implementation of the Asset Protection Scheme the £4 billion of preference shares HM Treasury holds (together with accrued dividends) will be replaced with new ordinary shares. Eligible Lloyds Banking Group plc ordinary shareholders (Shareholders) will be able to apply to subscribe for approximately £4 billion of new ordinary shares pro rata to their existing shareholdings at a fixed price of 38.43 pence per share. This represents an 8.5 per cent discount to the closing price on 6 March 2009. These new ordinary shares will be offered to Shareholders and new investors on the same basis as the Placing and Open Offer in November 2008. The ordinary share offer is fully underwritten by HM Treasury on substantially the same fee basis as the Placing and Open Offer conducted in November 2008. There will be an excess application facility as in November pursuant to which Shareholders may apply for additional new shares in the ordinary share offer. The proceeds of the issue will be used to redeem the preference shares held by HM Treasury.
    So when does that take place?
    http://www.lloydsbankinggroup.com/media/pdfs/investors/2009/2009Mar7_LBG_Asset_Protection_Scheme.pdf

    No dates have been released yet. Lloyds have not yet published the prospectus so all guesswork at the moment.
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    fatpig wrote: »
    Lloyds are creating more new shares faster than Zimbabwe prints new banknotes. They'll be giving them away free in Cornflakes packets soon enough.
    This may be so, but the opportunity to buy shares currently valued at 73p for a mere 38.5p shouldn't be ignored.

    Indeed, if it isn't ignored there's an outside chance the Government ownership of the bank could remain at less than 50%.
  • gozomark
    gozomark Posts: 2,069 Forumite
    its an open offer - I'm not sure if existing shareholders have any more right to buy the shares than anyone else
  • Baz_2
    Baz_2 Posts: 729 Forumite
    gozomark wrote: »
    its an open offer - I'm not sure if existing shareholders have any more right to buy the shares than anyone else

    Are you saying anyone can buy these shares? How does that work then?

    And if that is the case why is the share price still relatively high compared to the offer price?
  • gozomark
    gozomark Posts: 2,069 Forumite
    edited 7 April 2009 pm30 1:57PM
    Are you saying anyone can buy these shares?
    thats my understanding

    How does that work then?
    presumably you just apply

    And if that is the case why is the share price still relatively high compared to the offer price ?
    good question - presumably because there is so much demand for them, that demand outstrips supply. That, or maybe market anticipates the offer price will be raised ?

    all the above assumes it really is an open issue, and that existing shareholders have no pre-emption rights. I suspect they will.
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    edited 7 April 2009 pm30 2:07PM
    Fairly sure the Government have agreed to underwrite at 38.5p a share as part of the Asset Protection Scheme. That part can't be raised.

    Looking at this one with great interest.

    The wider they can cast the net for buyers, the less likelihood of them being majority owned by HM Government.
  • dc110
    dc110 Posts: 262 Forumite
    its an open offer - I'm not sure if existing shareholders have any more right to buy the shares than anyone else

    Open offer = existing shareholders given opportunity to buy additional shares at a fixed price. Unlike a rights issue, no rights to sell so you either take up, or dont. there wont be any lapsed rights proceeds as with a rights issue.

    Confusion for the previous poster may be that in a rights issue a non-existing (?) shareholder can buy rights on the market with the intention to then pay the offer price to get the new shares. In this way someone who isnt an existing shareholder can benefit from the rights issue (although obviously not as much benefit as an existing shareholder will get)
  • Buddy195
    Buddy195 Posts: 144 Forumite
    fatpig wrote: »
    Lloyds are creating more new shares faster than Zimbabwe prints new banknotes. They'll be giving them away free in Cornflakes packets soon enough.

    Still nothing to contribute I see :rolleyes:
This discussion has been closed.
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