Lloyds

mrposhman

gozomark wrote: »

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

In a normal offer yes, but this offer is to generate cash to pay off HMG's preference shares so technically will be cash in and cash out so shouldn't really affect the market cap in theory, though the market may see this as good news (especially if HMG continue to stay at 43% and the market cap will increase but the balance sheet should stay static.

gozomark

it will be cash in, and cash out, correct, but will also see elimination of preference shares - that needs to be taken into account, so mkt cap should go up. Otherwise you are saying investors put in more money and get nothing for it - they will - the elimination of the prefs - so the company is worth more/net assets increase ie balance sheet won't stay static.

Also, if govt doesn't participate, their holding as a %age will drop

mrposhman

gozomark wrote: »

it will be cash in, and cash out, correct, but will also see elimination of preference shares - that needs to be taken into account, so mkt cap should go up. Otherwise you are saying investors put in more money and get nothing for it - they will - the elimination of the prefs - so the company is worth more/net assets increase ie balance sheet won't stay static.

Also, if govt doesn't participate, their holding as a %age will drop

HMG have already said they will take up their full %.

Ok there will be a slight reduction but only by the interest payable on the prefs, the other amendments would be made in share capital and not affect net assets so there should only really be a slight movement in net assets but a large increase in shareholding.

Buddy195

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)

Personally am now looking at share price and wondering do I sell or hold on to them and buy offer shares as well. Got a decent return at present, just wondering if it's worth hanging on a few more weeks or not

sabretoothtigger

Government share holding wont change I think, they get their pref share money back if people buy shares to fund it otherwise they'll take shares as payment

Buddy195

sabretoothtigger wrote: »

Government share holding wont change I think, they get their pref share money back if people buy shares to fund it otherwise they'll take shares as payment

Is the offer at 38p only open to share holders on the 8th of next month? I know I still have an option on RBS even though I've sold my shares. Just wondering if Lloyds would be the same? If it's an open offer then I could see a LOT of people buying into it

sabretoothtigger

Not sure when the record date for the offer is but if you sold now you'd miss the div

The option on rbs was above market price and you likely sold after the record date as it was all performed much quicker then lloyds has trundled along.

Lloyds will probably do it around the agm

Buddy195

sabretoothtigger wrote: »

Not sure when the record date for the offer is but if you sold now you'd miss the div

The option on rbs was above market price and you likely sold after the record date as it was all performed much quicker then lloyds has trundled along.

Lloyds will probably do it around the agm

I've an email stating 8th of May as the date. Will have to dig it out and see exactly what it says?

The_MoneySavingKid

Buddy195 wrote: »

I've an email stating 8th of May as the date. Will have to dig it out and see exactly what it says?

Or a simple search through a search engine."Digging" is over exaggerated..all you have to do is search your email.
http://www.lloydsbankinggroup.com/investors/shareholder_information/financial_calendar.asp

mrposhman

Buddy195 wrote: »

I've an email stating 8th of May as the date. Will have to dig it out and see exactly what it says?

The 8th May is the record date for the capitalisation issue which is being made instead of the dividend. On this date, if you hold you will receive 1 share for every 40 that you own.

No-one can tell you whether or not now is a good time to buy or sell. If you are happy with your profit and are nervy about going forward then it could be better to sell.

Failing that, why not sell some in order to buy back at a guaranteed price fo 38p.

Its likely (my interpretation) that the shares will be apportioned at a rate of 0.646 so using that you could effectively work out how many additional shares you could buy when the offer is completed.