LLoyds Open (Exchange) Offer NOV 09

cardsharps

Don't give Lloyds any more money. What happened to the last load of cash they took off shareholders? And the load of cash before that, etc. Can no-one spot a pattern emerging here?

Give it 12 months, and they'll be back looking for even more cash off you.

opinions4u

cardsharps wrote: »

What happened to the last load of cash they took off shareholders?

I made about £800. That's what.

lotsadogs

Rollinghome wrote: »

When the shares go ex-rights their value goes down by the value of the rights which can then be traded independently of the shares. But the value of the shares plus the rights together should be worth roughly the same as before (ignoring normal movements). It's that splitting of the rights from the shares that makes it look as if the price has dropped.

If you don't want to exercise the rights you can sell them or the company will sell them for you. The price always gets jittery when there's a rights issue and there can be a hit to the price if a large chunk of the rights aren't taken up due to the overhang or, alternatively, there can be bit of a boost if they fly off the shelves.

Thnak you for posting that. Much appreciated. But Ive sold them all now and Im cool with that. I bought them in March so have made a good deal on them and I feel safer "out" than "in" with LLoyds at the mo.

Good luck everyone with your choices.

anna42hmr

i have decided to take up the options, i only hold a small amount anyway (around 100 shares) so its only cost around £40 its a risk but for that small amount i am not going to loose sleep over it, plus never invest more than you can afford to risk

sabretoothtigger

Last load of cash was uesd to pay down expensive debt. That is a rubbish point to make because it improved company worth..

Im wondering whether to sell rights now, speculate on a higher short term price and buy shares separately afterwards and maybe gain on the difference.

LLOYDS BANKING GP - Rights Issue

LLOYDS BANKING GP (the 'Company') is undertaking a Rights Issue on the following basis:

1.34 New shares for every 1 Existing Ordinary share held at a price of 37 pence per New share.

The terms and conditions of the Rights Issue are fully detailed in the Prospectus dated 3 November 2009 available online through the link below (the 'Prospectus').
Unless the context otherwise requires, expressions defined in the Prospectus have the same meanings in this communication.

Your options are detailed below, with a section at the bottom of this notification to make your election. Once you have made your election, you should receive a reference number to confirm it has been lodged.

For options 01 & 02 you may be required to take further action to fund your account - please read "How Will Payment Be Made?"

The Company has also undertaken a Share Subdivision of its Existing Ordinary shares on the following basis:

Each Ordinary share of 25p has been subdivided into 1 New Ordinary share of 10p and 1 Deferred share of 15p.

The Share Subdivision will give the Company more flexibility in its capital structure going forward.

No application has been made for the Deferred shares to be listed on the Official List or admitted to trading on any stock market or securities exchange. These shares have extremely limited rights and benefits attached to them and cannot be transferred at any time without the written consent of the Directors. At the appropriate time the Company may seek to repurchase or cancel the Deferred shares. These shares have therefore not been added to your account. How This Affects You:
Based on your holding of LLOYDS BANKING GP ORD GBP0.1 shares you will receive an entitlement to LLOYDS BANKING GP Nil Paid Rights. This letter sets out your options under the terms of the Rights Issue.

You Have The Following Options: 1 Take-up all of your Rights to buy LLOYDS BANKING GP Ordinary GBP0.10 shares at a cost of GBP
Your election will be applied to and based on your holding of Nil Paid Rights as at the close of business on 10 December 2009. Please ensure monies to take up your Rights are available as detailed in the 'How Will Payment be Made?' section.

If you do not have sufficient cleared funds to take up all of the specified number of shares then we will take up the maximum number of shares we can based on the funds available. 2 Partial Take-up of your Rights to buy a specified number of LLOYDS BANKING GP Ordinary GBP0.10 shares.
The quantity you elect to take-up will be applied to and based on your holding of Nil Paid Rights as at the close of business on 10 December 2009. Please ensure monies to take up your Rights are available as detailed in the 'How Will Payment Be Made?' section.

If you do not have sufficient cleared funds to take up all of the specified number of shares then we will take up the maximum number of shares we can based on the funds available. 3 Sell your LLOYDS BANKING GP Nil Paid Rights.
If you wish to sell your Nil Paid Rights, we are offering a commission-free service for those customers electing to sell via this notification and the following conditions will apply:

This option will only be available up until midnight 7 December 2009.
Your instruction to sell your Nil Paid Rights will be processed on the next working day after we receive your instruction.
A contract note will be available confirming the sale details.
We may aggregate your sale order with orders from other LLOYDS BANKING GP shareholders opting to sell LLOYDS BANKING GP Nil Paid Rights; this may result in a slightly more or less favourable price than if we had sold your Rights separately. The order will be carried out in accordance with our Order Handling Policy which is designed to secure the best price available to us at the time we execute the order in the market.
If you buy any additional Nil Paid Rights after making your election, you will need to contact our call centre by 10 December 2009 if you wish to take up the Offer on those additional Rights, otherwise they will lapse.
4 Cashless Take-up (Tail Swallow) - Sell some of your Rights to take up the remaining Rights.
This option is available up until midnight 7 December 2009.We will arrange to sell (commission free) the correct amount of Rights to take up the remaining Rights without you having to make a payment.
Your instruction for Cashless Take-up on your Nil Paid Rights will be processed on the next working day after we receive your instruction and will be based on your holding of Nil Paid Rights at that time.
A contract note will be available confirming the sale details.
We may aggregate your sale order with orders from other LLOYDS BANKING GP shareholders. This may result in a slightly more or less favourable price than if we had sold your Rights separately. The order will be carried out in accordance with our Order Handling Policy which is designed to secure the best price available to us at the time we execute the order in the market.
The remaining Rights will be taken up under the terms of the Rights Issue.
If you buy any additional Nil Paid Rights after making your election, you will need to contact our call centre by 10 December 2009 if you wish to take up the Offer on those additional Rights, otherwise they will lapse.
If you opt for the Cashless Take-up and the price achieved for the sale of your Nil Paid Rights does not raise 37 pence or more in total, then we will not be able to take up any New shares for you. In this case your Rights will be sold and any proceeds will be credited to your account

Lapse. - If you decide to take no action your Rights will expire or lapse. Lloyds Banking Group will arrange for the shares that these Rights entitled you to buy, to be offered for sale. Any premium obtained above the Rights Issue price, less expenses will be paid to you. The total number of shares you will own will stay the same. However, the proportion of Lloyds Banking Group plc you own will reduce as more shares will be in issue.

Important Information & Other Key Dates:
This document is not a summary of the Prospectus and should not be regarded as a substitute for reading the Prospectus. Any decision to subscribe for any New shares under the Rights Issue must be made only on the basis of information contained in and incorporated by reference into the Prospectus. The Prospectus is available online at www.lloydsbankinggroup.com.

The Prospectus is also available for inspection in hard copy at the Company's registered office as well as at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ between the hours of 9.30am and 5.30pm Monday to Friday except public holidays until 14 December 2009.

Unless otherwise defined herein, capitalised definitions shall have the same meaning as in the Prospectus published by Lloyds Banking Group plc on 3 November 2009.

If you are in any doubt as to the action you should take you should seek advice from an appropriate professional adviser duly authorised under the Financial Services and Markets Act 2000 if you are a resident in the UK or, if not, from another duly authorised independent financial adviser of your own jurisdiction.

The distribution of this document, directly or indirectly, into jurisdictions other than the United Kingdom may be restricted by law. Persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions.

Neither the Rights nor the New shares have been or will be registered under the US Securities Act of 1993, as amended, and may not be offered or sold in the United States, absent registration or an applicable exemption from such registration. There will be no public offering of securities in the United States. Due to legal and practical restrictions the shareholders resident in certain jurisdictions will not be able to participate in the Rights Issue.

If you sell or transfer or have sold or transferred some or all of your Existing Lloyds Banking Group plc Ordinary shares (other than ex-rights) before 8am on 27 November 2009, you will not be entitled to the Rights arising from those shares and we will be required to pass these on to the purchaser or transferee. You should therefore ignore this documentation or contact us with any queries.

Dealings in the Nil Paid Rights are expected to commence on the London Stock Exchange on 27 November 2009 and the stock will also be credited to your account on the same day.

Should you wish to sell your Nil Paid Rights you can do so either via our online service or with our call centre between 8.00am and 4.30pm to obtain an immediate price. Standard dealing commission will apply. You can instruct us to sell your Rights online or through our call centre up to 4.30pm on 8 December 2009. Alternatively if you select option 3 your Nil Paid Rights will be sold on the next working day after we receive your instruction commission-free and may be aggregated with orders from other shareholders.

The availability of all options which involve selling Rights is dependant on there being a market for the Rights.

Dealings in the New shares are expected to commence on the London Stock Exchange on 14 December 2009. If you take up your Rights, the New shares are expected to be credited to your account on or around that same date.

Investors should not subscribe for any Nil Paid Rights, Fully Paid Rights or New shares referred to in this form except on the basis of the information contained in the Prospectus.

What Happens If I Don't Elect ?
If we do not receive a valid election from you, your Rights will lapse and will be offered for sale to other investors.

When Is The Last Time I Can Elect ?
Please ensure you submit your option before 10 December 2009 to enable us to process your instruction in accordance with the Company's timetable for this event.


How Will Payment Be Made ?
Your Cash Management Account must be funded with sufficient cash by 10 December 2009.

The most efficient way to fund your Cash Management Account is by using a debit card, where you can fund your account immediately using the 'Fund and Withdraw' facility online or by contacting our call centre.
If you do not have a debit card set up on your account, simply contact our call centre and we can set this up immediately.
You can also sell shares held in your Share Dealing Account. Settlement of the sale should be by 10 December 2009.

Please note that it is your responsibility to ensure sufficient cleared funds are available in your Cash Management Account by 10 December 2009. Payment will NOT be taken from your bank account automatically.

If you do not have sufficient cleared funds then we will take up the maximum number of shares we can based on the funds available.


Making My Decision: Take-Up - I elect to take up my Rights to buy LLOYDS BANKING GP Ordinary GBP0.10 shares at a cost of GBP
Please ensure you have funds available as detailed in 'How Will Payment Be Made?' section. Partial Take-up - I elect to take up my Rights to buy a specified number of LLOYDS BANKING GP shares. Please ensure you have funds available as detailed in the 'How Will Payment Be Made?' section to take up the number of New shares applied for below. Please enter the total quantity of shares required: Sell - I elect to sell my LLOYDS BANKING GP Nil Paid Rights. I have read, understand and agree to the conditions to sell the Rights. Cashless Take-up - I elect to sell sufficient of my LLOYDS BANKING GP Nil Paid Rights to exercise the remaining Rights. I have read, understand and agree to the conditions to sell the Rights. I understand that if the value from the proceeds of the sale of Nil Paid Rights is insufficient to purchase at least one New share, I will only receive the proceeds (if any) from the sale of my Nil Paid Rights.

melbury

I have decided to buy them, Lloyds was basically a good sound bank and hopefully will be again some day. They just should have steered well clear of getting hitched up with HBOS:eek:

cheekykid

I don't yet understand what the "rights issue" really means. I've read much online but am still confused. I have 10000 shares with Lloyds and am offered around 13000 more for aprox £5,000. Am not sure what to do.

Example:
A company has 10 shares worth $5 each and I owe one of them so my percentage of the company is 10%. Suppose they do a right issue at 1:1 with a 50% discount on the share price. They issues 10 more shares so the amount is doubled now. I understand that if I do nothing my percentage will drop to 5% though my cash value will remain the same.

What I don't understand is the following. Firstly where do they find these new shares? They devide the company into more pecies in order to generate new shares?

Secondly what is the benefit in buying the new shares even if they had a 90% discount? (other than retaining your % of the company).
Basically they ask me for more money and i earn nothing out of it. It's not like the discounted shares i get i can then sell for a profit afterwards. Why get them anyway? After all my real percentage of lloyds with 10k is so so small anyway that even a right issue really makes little to virtually no difference. If I had 100million on Lloyds then that would have been a different scenario of course.

Lastly, what do they mean exactly when they say that if the share price drops below your bought price you only lost money "on paper"? havent I actually lost money since if i sell my asset i wont get back my original amount since its value have fallen?

opinions4u

cheekykid wrote: »

A company has 10 shares worth $5 each and I owe one of them so my percentage of the company is 10%. Suppose they do a right issue at 1:1 with a 50% discount on the share price. They issues 10 more shares so the amount is doubled now. I understand that if I do nothing my percentage will drop to 5% though my cash value will remain the same.

That's a fair enough summary.

What I don't understand is the following. Firstly where do they find these new shares? They devide the company into more pecies in order to generate new shares?

They print them (or create them electronically). So yes, they divide the company in to billions of smaller pieces.

Secondly what is the benefit in buying the new shares even if they had a 90% discount? (other than retaining your % of the company).

If you believe that the company will succeed, then surely you would buy them if you have the resources to do so.

Basically they ask me for more money and i earn nothing out of it.

It is about earnings. The alternative, remember, was for LBG to join the Asset Protection scheme and become 60%+ Government owned. This would, in my view, have had the Government directly or indirectly driving the policy of the bank. This would, most likely, have inhibited the bank in its recovery (and probably have seen political pressure to ease the scale of job cuts which are part of a programme to deliver £1.5bn in annual cost savings - a not too shabby sum of money) and been responsible for reducing the value of the shares.

It's not like the discounted shares i get i can then sell for a profit afterwards.

You can if they go up in value.

Why get them anyway? After all my real percentage of lloyds with 10k is so so small anyway that even a right issue really makes little to virtually no difference.

Again, it's not so much about your %ge share of the company. It's about what you think will happen to the share price after the rights issue. Up = buy. Down = why were you still holding the shares?

If I had 100million on Lloyds then that would have been a different scenario of course.

Not really. The logic behind the decision would still be the same. You'd just be a richer person!

Lastly, what do they mean exactly when they say that if the share price drops below your bought price you only lost money "on paper"? havent I actually lost money since if i sell my asset i wont get back my original amount since its value have fallen?

You only realise a loss when you sell. While you continue to hold you have a paper loss with a potential for profit.

As I understand things, you have 4 choices:

1) Buy the discounted shares
2) Sell the rights (which I think are worth about 20p each at the moment) and retain your existing shares. This will give you a cash payment of £2,600 to compensate you for the drop in share price that you have seen recently.
3) Tail swallow - sell enough of your existing shares (by ticking the right box on the form) to buy the new, cheaper, shares.
4) Sell all your rights and all your shares and get out of LBG.

lotsadogs

opinions4u wrote: »

4) Sell all your rights and all your shares and get out of LBG.

I did that. I couldnt afford to buy into the option at this time. I think that if the shares go very low at any time I might partially buy back, but will see how it goes.

cardsharps

cheekykid wrote: »

I don't yet understand what the "rights issue" really means.

In summary, Lloyds are begging their unfortunate shareholders for even more money because they're up shiite creek yet again.

You might be willing to give a beggar money once. But 3 or 4 times? surely not.