Reverse takeover and Conversion of shares

suchafunkymonkey

Hi all,

I'm very new to share dealing and one of my first buys IQ Holding is the subject of a reverse takeover. I've managed to get my head around what it is and why its done, but the document sent out for the upcoming AGM has me a but stumped. The bit in question is as follows:

"That, conditional upon the Offer becoming wholly unconditional, every 1,000 issued ordinary shares of 0.004 pence each in the Company be and are hereby converted into one issued ordinary share of 4 pence each and that the directors shall deal with fractions which arise in any manner it deems fit and in particular may sell the shares representing fractions to which members would otherwise be entitled to any person and to pay any net proceeds to the Company."

Now, I've read this several times but I'm still not sure what exactly it will mean to me.

I have a holding of roughly 118,000 shares in IQH which I bought at 0.09p. How will this affect my shares/money?

Thanks.

chris_m

It looks to me that your 118,000 shares of issue value 0.004p will be converted to 118 shares of issue value 4p.
What that means to the value of your holding depends on what the market thinks, I guess. If the market price takes the same conversion rate they should be 90p each.

The part about fractions would be to cover the case where people hold stock not in multiples of 1000.

suchafunkymonkey

Thanks. That's what I originally thought, but a few message boards were saying that the estimated price was circa 12.3p which would reduce the value by a massive amount. I guess I have to wait and see what happens.

Loughton_Monkey

suchafunkymonkey wrote: »

Thanks. That's what I originally thought, but a few message boards were saying that the estimated price was circa 12.3p which would reduce the value by a massive amount. I guess I have to wait and see what happens.

Nothing whatsover to do with the price of the share. All it is saying is that mathematically, some people (although not you because of the "'000") would end up with an entitlement to 310.9 shares.

The 0.9 of a share will be dealt with 'how they see fit....' I strongly suspect they will round up or down, but even if they don't, I can't see anyone suing them for loss of 11 pence!