Lloyds

mrposhman

dc110 wrote: »

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.

Effectively, an open offer is a rights issue but without a lot of the intricacies of the rights issue.

All existing shareholders still have the right to buy their allocation. This is a guaranteed allocation and cannot be forcibly reduced. The open offer allows you to request more than your share of the issued shares so for example, if you are allowed 20,000 shares, you can request whatever you want say 100,000 new shares but theres no guarantee that you will get anymore than 20,000.

As I understand the issue as a whole, HMG will not subscribe to anymore of their allowance but PI's / institutions probably will. If some shareholders do not take up their allowance then these will be provided to the shareholders that have requested more. If this element of the issue is oversubscribed then the shares will be split on a pro-rata basis to the shareholders who have requested more and this would mean that there would be no need for the underwriters, therefore HMG would only get their allowance which they are taking up in full. If the remaining shares are undersubscribed, all shareholders who requested more will get the full allowance they have requested and any remaining shares will be sold to the underwriter (HMG).

As far as I can see, anyone who doesn't own shares on the record date will not be eligible to take up the offer and these will not be sold on the open market.

Buddy195

mrposhman wrote: »

As far as I can see, anyone who doesn't own shares on the record date will not be eligible to take up the offer and these will not be sold on the open market.

What is the record date? Has it been confirmed as yet?

The_MoneySavingKid

dc110 wrote: »

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)

Sorry,could you clarify?
Is the share price likely to fall in reaction to this at all?

gozomark

The_MoneySavingKid wrote: »

Sorry,could you clarify?
Is the share price likely to fall in reaction to this at all?

in theory yes, as owning a share now allows you to buy more at a lower price, so the current share price includes 2 "bits" of value. Once we pass the ex date, the price should drop

dc110

The_MoneySavingKid wrote: »

Sorry,could you clarify?
Is the share price likely to fall in reaction to this at all?

That wasnt really part of the point i was making but answered by gozomark nonetheless

mrposhman

gozomark wrote: »

in theory yes, as owning a share now allows you to buy more at a lower price, so the current share price includes 2 "bits" of value. Once we pass the ex date, the price should drop

In theory it should drop to the as the market cap will not change but the shareholdings will increase = lower sp.

mrposhman

Buddy195 wrote: »

What is the record date? Has it been confirmed as yet?

Afraid not. We are still waiting for LBG's statement.

Truly.Yours

I have a bit of money and would not mind buying share in Lloyds.

I have never brought any shares before, yet I would like to as a possible small investment.

How would I buy say, 250 shares? (is the even possible?)#

EDIT: sorry for being a bit off topic

sabretoothtigger

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.

1/40 or 2.5% which is the amount of capital they wish to move from the balance sheet to the present shareholders, ie. it aint for free

gozomark

mrposhman wrote: »

In theory it should drop to the as the market cap will not change but the shareholdings will increase = lower sp.

the mkt cap "should" increase, because new equity is going into the bank, but by less than the % increase in number of shares, therefore price "should" fall