LLoyds Open (Exchange) Offer NOV 09

Yakubu22

Quick Question:

If I do nothing (as I did last offer). Then obviously my holding is diluted, but will I get another cheque compensating for the price fall? If so what price per share will they compensate with this time?

Yakubu22

Yakubu22 wrote: »

Quick Question:

If I do nothing (as I did last offer). Then obviously my holding is diluted, but will I get another cheque compensating for the price fall? If so what price per share will they compensate with this time?

and also if I elect to Sell All, do i just get the current market price (about .55) per share?

Thanks for your help

Rollinghome

Yakubu22 wrote: »

Quick Question:

If I do nothing (as I did last offer). Then obviously my holding is diluted, but will I get another cheque compensating for the price fall? If so what price per share will they compensate with this time?

You now own two separate securities: your ex-rights shares and the nil-paid rights. At the market close today the prices were 55.15 pence and 17.75 pence respectively. That could go up or down if you wait for them to sell the rights for you. The value of the rights will depend on the value of the fully paid shares at the time of sale.

Quite a good explanation of the options here http://www.thisismoney.co.uk/investing/article.html?in_article_id=495105&in_page_id=166&position=moretopstories

sabretoothtigger

If you do nothing you get the rights price proceeds which are sold on your behalf at the end of term and you keep your original shares now at a lower price

cheekykid

I noticed this in my halifax sharedealing account which is confusing to me.



They took out some money from my normal shares in order to buy the rights issue shares or not? why they splitted my shares like this?

They bought 13483 shares with £3061 as the pic shows. If so why now they ask me for almost 5k for the same amount of shares?

Are these shares different from the ones they say i need to make a decision on by 7Dec ?

someone please clarify for me what is going on

Richard_DandR

If you look back to your original purchase of 10,062 shares, you should find that they cost £9,162.86. When Halifax added the nil paid shares they split this cost across your two holdings (£6,101.28 and £3,061.58).

You will still have topay the call of 37p for each of the nil paid shares if you want to take them up.

x2-zero

Still confused about how the shares become diluted. I only have a small number 317 shares and have been allocated 424 new shares, in effect adding 100 + shares,if i sell my rights or do nothing, once the rights issue is done and dusted will i lose around 100 + shares and my shares will then stand around 200.

00ec25

x2-zero wrote: »

Still confused about how the shares become diluted. I only have a small number 317 shares and have been allocated 424 new shares, in effect adding 100 + shares,if i sell my rights or do nothing, once the rights issue is done and dusted will i lose around 100 + shares and my shares will then stand around 200.

No - you will still have 317 shares
the dilution is because those 317 shares now represent a smaller % of the total number of shares in circulation than before. If you buy the rights you will have a total of 424 shares which will represent exactly the same % of the total number of shares in circulation as you owned before the rights

Richard_DandR

If he buys the rights, he will have 741 shares - his original 317 plus the 424 new.

Dilution comes from the fact that the number of Lloyds shares in issue is being increased.

If you take up your rights, you will own the same percentage of LLoyds as before the rights issue. If you sell or allow the rights to lapse, you holding in Lloyds will be a smaller percentage of the total shares in issue - ie diluted.

Special_T

Maybe I have misunderstood...........


Supposing I don't want to invest any more cash and have say 1000 shares, so rights issue is for 1340 shares

Option 1: swallowtail - Sell rights (price 17p at the mo) to take up rights issue. Wouldn't seem I could buy many extra shares - selling 900 rights at 17p only generates £153 and would cost £162 to buy remaining 440. Would take total holding to 1440

Option 2: sell 900 ordinary shares at 55p (price at the mo) would generate £495 which means full right issue would be taken up in full. Would result in 1440 shares (i.e. 1340 from rights plus 100 of existing holding).

Doesn't seem to make much difference - no outlay & same no of shares from either option. Am i missing something here?

Whilst simplistic figures, my holding is much higher :eek: