Lloyds announces equity placing

Hatone

According to the FT;

''Under the terms of the share placing, existing shareholders will be able to subscribe 0.6213 new shares for every share they currently hold. The new shares will be priced at 38.43p, a 57 per cent discount to Friday’s closing price''

I wouldn't be too surprised if this rights issue becomes fully subscribed to redeem the 4 billion pref shares currently in the hands of our government - a whooping 57% discount is a lot at the current market rate, so you'd have to be pretty daft not to take up this offer.

Baz_2

What's the cutoff date for eligibility for this?

00ec25

Baz wrote: »

What's the cutoff date for eligibility for this?

read it yourself

http://www.lloydsbankinggroup.com/media/pdfs/investors/2009/2009May18_LBG_Placing_&_Open_Offer.pdf

Baz_2

Whats the record date mean?

It says acquired before 20th May, so I guess that's why the price is going up. I bought mine on Friday, I guess that means I am eligible then? Or have I read it wrong?

Hatone

Although the official prospectus will be available after 20th May, but the letter is a bit vague whether you can purchase additional shares other than to say there is no ''excess application facility'' - is that before the conclusion of the open offer or after?

Then again HSBC's 12 billion rights issue held last month was fully subscribed with only 3% of shares sold to the open market.

payless

some confusion over the holding date - may have to have purchased before 13/5 ???

Baz_2

Yep looks like the 13th. So as long as you held some shares before that date then you can buy as many as you like before the 20th and your entire holding will qualify.

No doubt the share price will drop after the 20th.

00ec25

Hatone wrote: »

letter is a bit vague whether you can purchase additional shares other than to say there is no ''excess application facility'' - is that before the conclusion of the open offer or after?

the letter is very clear. There is only one way to buy shares at the 38p offer price, you will be allowed to buy 0.6 new for every 1 you held on the cutoff date

you cannot purchase additional shares in excess of your 0.6 for 1 entitlement at the offer price of 38.xxx p

if there are any shareholders who do not purchase their allocations/entitlements, then those shares will not be made available to shareholders actually taking up the offer to buy at 38p, instead they will be sold by Lloyds itself on the open market where anyone can buy them at the open market price - whatever that is at the time

Baz_2

I'm still confused, why would they even mention the 20th if the cut off date is the 13th?

Is it normally to have two dates when this sort of thing happens?

Lots fo threads on yahoo are suggesting that if you buy today you qualify for the issue.

00ec25

Baz wrote: »

I'm still confused, why would they even mention the 20th if the cut off date is the 13th?
.

13th may - the record date
the record date of 13th May is for Lloyds admin use only and has no impact on your entitlement. Lloyds will send out the paper documents about the offer to the address it holds in its shareholder register as at 13th May.
If you were not a shareholder on or before 13th May you will not automatically receive the documents and will need to ensure that the Lloyds registrars are now aware that you are a new shareholder who has bought shares between 13th - 19th May and you will need to provide your address to them to get the paper based documents sent to you (ie they will not be sent unless you ask for them).

8am 20th May - the ex date
anyone who has purchased shares before 8am 20th May (therefore in reality for the UK by close of business on the 19th) will be entitled to purchase shares as part of the open offer. If you sold your shares before 8am 20th May you will no longer be entitled

paulh0

Read this before you jump in. Seems one of our national newspapers is predicting LLoyds share price to crash this Wednesday!!!

From the Guardian website....

This Wednesday, Lloyds' share price will drop as 10bn new shares are added to the 17bn already in existence.