LLoyds Open (Exchange) Offer NOV 09

sabretoothtigger

The main question apart from the confusion of variation in price tags is why are they raising the money.

Your opinion on this doesnt even matter that much, the big holders of lloyds shares and bonds already decided it was a good idea and have committed the required 22bn


Apathy hasnt been too profitable so far

melbury

I posted mine off yesterday, decided it is definitely worth the gamble.

Down the line Lloyds shares may rocket again, alternatively they may drop off the radar, but that is very doubtful and I would be kicking myself if they turn it around and I hadn't bought the extra shares.

boomerangs

melbury wrote: »

I posted mine off yesterday, decided it is definitely worth the gamble.

Down the line Lloyds shares may rocket again, alternatively they may drop off the radar, but that is very doubtful and I would be kicking myself if they turn it around and I hadn't bought the extra shares.

The Lloyds/HBOS propaganda worked then. Rather you than me, I'd rather invest my money in a properly run company.

cheekykid

Richard_DandR wrote: »

Yes, you are correct.

You origninally purchased 10,062 shares at a cost of £9,162.86.

On the ex rights date, Halifax have split this into two to reflect the additional holding. The calculation goes something like this:

10,062 shares at 56p = £5,634.72 (66.5559%)
13,483 Nil Paid at 21p = £2,831.43 (33.4441%)
Total £8,466.15

56p and 21p being approximations of the first day dealing prices for the two securities.

Then take your original cost £9,162.86 * £5634.72/£8466.15 = £6,098.42

and £9,162.86 * £2,,831.43/£8,466.15 = £3,064.44

This shows the reallocation of your original book cost between the two stocks. Halifax obviously used slightly different prices to arrive at the figures in your example.

I, like 00ec25, am surprised you have committed so much money whilst having so little knowledge of the basics. Is this a fault of the forum, where it can be made to look so easy?

If you went to Sainsburys at bought a pack of Jaffa cakes for a £1 and there was a buy one get one free offer, the two packs would have cost, in effect, 50p each. Part of the cost of the first has transferred to the second. This is similar to a bonus issue.

If instead of the buy one get one free, you are given a coupon with the right to buy an other pack at 37p (rather than £1), that coupon would have a value as it would save 63p on your next purchase. So in this instance you have paid £1 for a pack of Jaffa cakes together with a coupon with a value of 63p. So again your original cost is shared. This is a bit like a rights issue.

Of course next week when you go to use your coupon, you might find Sainsburys have cut the price of Jaffa cakes to 70p, making the coupon less valuable.

If you buy my rights for roughly 3k which is the difference between current share price and 37p then what is value of my offering since you already paying 3k for my rights which eliminates the discount of the shares plus then another 5k for the 13483 share. Where is the value for you?

sabretoothtigger

boomerangs wrote: »

The Lloyds/HBOS propaganda worked then. Rather you than me, I'd rather invest my money in a properly run company.

The point is Lloyds is or was a well run company, they werent in trouble but they are currently trying to keep the titantic afloat pretty much. If they can turn this situation around the salvage value alone is massive and its looking increasingly likely imo

ozzage

sabretoothtigger wrote: »

The point is Lloyds is or was a well run company, they werent in trouble but they are currently trying to keep the titantic afloat pretty much. If they can turn this situation around the salvage value alone is massive and its looking increasingly likely imo

Couldn't agree more. Lloyds is not a badly run company, and is going to be massive after all this settles. Nothing to do with propaganda!

cardsharps

Well-run companies don't have a rights issue every 6 months!!

P.S. I hope you've all put some money aside for their next rights issue. It shouldn't be long now!

sabretoothtigger

LLOYDS BANKING GROUP PLC ANNOUNCES THE ISSUE OF 107,740,591 NEW ORDINARY SHARES
Lloyds Banking Group plc (the Group) hereby announces that it has today agreed to issue 107,740,591 new ordinary shares of 10 pence each fully paid (New Shares) to two of the Lloyds TSB Foundations in satisfaction of their entitlements in connection with the Group's placing and compensatory open offer in June 2009, pursuant to the Group's articles of association. The Group has agreed to issue 36,259,231 New Shares at an issue price of 38.43 pence and 48,587,369 New Shares at an issue price of 37 pence to the Lloyds TSB Foundation of England and Wales, and 9,783,757 New Shares at an issue price of 38.43 pence and 13,110,234 New Shares at an issue price of 37 pence to the Lloyds TSB Foundation for Scotland.


Application has been made for admission of the New Shares to the Official List of the UK Listing Authority and for the admission of the New Shares to trading on the main market of the London Stock Exchange. The New Shares are expected to be issued, and dealings in the New Shares are expected to commence, at or around 8:00 am on 14 December 2009.


This announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Hong Kong, Israel, Japan, Thailand or in any jurisdiction in which such publication or distribution is unlawful. No public offer of securities of the Group is being made in the United Kingdom, the United States or elsewhere.


In particular, the New Shares referred to in this announcement have not been and will not be registered under the United States Securities Act of 1933 and may not be offered, sold or transferred in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the United States Securities Act of 1933.


The securities mentioned herein may not be offered, sold, resold, transferred or delivered, directly or indirectly, in any jurisdiction in which it would be unlawful to do so absent registration or an applicable exemption from the registration requirements of the relevant laws of any such jurisdiction. There will be no public offer of such securities in any jurisdiction in which such offer would be unlawful. This announcement does not constitute an offer to sell, or a solicitation of an offer to subscribe for, the securities being issued in any jurisdiction in which such offer or solicitation is unlawful.

The New Shares referred to in this announcement will not be admitted to trading on any stock exchange other than the London Stock Exchange.


The contents of the Group's website do not form part of this announcement.


The contents of this announcement are not to be construed as legal, financial, business or tax advice. Each prospective investor should consult its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

Last rights price was 20p ? Not too bad so no one should suffer too much relatively


Chart adjusted for dilution




http://en.wikipedia.org/wiki/Stock_dilution

Richard_DandR

cheekykid wrote: »

If you buy my rights for roughly 3k which is the difference between current share price and 37p then what is value of my offering since you already paying 3k for my rights which eliminates the discount of the shares plus then another 5k for the 13483 share. Where is the value for you?

If I were to buy your rights, it would be at whatever the current market price is - say 20p making £2,696.60. I would then pay the 37p call (£4,988.71) giving me a total cost of £7,685.31 (average cost of 57p ie 20p + 37p).

The current market value of the fully paid shares is around 56p so I'd be losing 1p a share (£134.83).

The dealing costs on buying nil paid shares (and then paying the call) might be lower than buying the fully paid shares. Histoircally, Stamp Duty was not charged on nil paid rights so this would be one benefit (if it still applies) and isn't charged on the call payment. Not sure if the rules have changed re stamp duty on nil paid shares.

Stewster

cardsharps wrote: »

Well-run companies don't have a rights issue every 6 months!!

They do when forced to bail out a bankrupt scottish bank for political reasons by a discredited Labour govenment