Help with a Barclays corporate notification

xyz123

hi

asking on behalf of an elderly relative.
shares were left for her by her husband who passed away suddenly

She recently received an email with some notification and her online account says the following. Its about BARCLAYS ORD GBP0.25 shares.

BARCLAYS is undertaking a Rights Issue on the following basis:

1 Nil Paid Right for every 4 Barclays PLC (Barclays) Ordinary shares held on the Ex-entitlement Date of 18th September 2013.

Each Nil Paid Right entitles the holder to subscribe for 1 New Barclays Ordinary share at a price of GBP1.85 per New Ordinary share.

Holders of Nil Paid Rights have the following options:

Option 1 - Take up their Rights.

Option 2 - Partial take up of their Rights.

Option 3 - Sell their Rights.

Option 4 - Cashless take up of their Rights

Option 5 - Lapse (Default/no action required)

Can someone please help understand on options using simple language and perhaps guide on which option to choose. does it change the value of her stocks?

thanks a lot

sabretoothtigger

Been and gone I thought. ex 18th Sept and does it say when the new shares trade

does it change the value of her stocks?

The company is fund raising, values change all the time. It tends to fall on rights, rise after but all a maybe

If you want advice from a stranger, option 4 is the easiest option as no new cash has to be put in. Im guessing she is very late to choose which option so hurry.
If it was me ? I'd take option 1 right now and that means paying more cash towards their fund raising.

The context is Basel 3 and sorry it doesnt get any simpler

If you do absolutely nothing, then a cheque should arrive as they will sell your rights for you. Imagine rights like options or raffle tickets, you can sell them instead of entering and in this case they should be worth something ( I think..)


Overall I dont think it loses the holder money but I sold my Barc shares as I expected them to come down some. This has happened, now Im thinking of buying again maybe. So that loss in value is more coincidental though everything counts kinda

grizzly1911

Discussed and explained here.

https://forums.moneysavingexpert.com/discussion/4760274

A pack should have been received by post.

The 25/9 was the last date for using the special share dealing service for Options 3 & 4. May be able to do those through a broker.

2/10 is last date for receipt of acceptance, instruction and payment under the rights issue and renunciation of Provisional Allotment Letters.

Doing nothing you should get some form of payment but their is no guarantee how much., depends on success of the issue and demand.

xyz123

grizzly1911 wrote: »

Discussed and explained here.

https://forums.moneysavingexpert.com/discussion/4760274

A pack should have been received by post.

The 25/9 was the last date for using the special share dealing service for Options 3 & 4. May be able to do those through a broker.

2/10 is last date for receipt of acceptance, instruction and payment under the rights issue and renunciation of Provisional Allotment Letters.

Doing nothing you should get some form of payment but their is no guarantee how much., depends on success of the issue and demand.

thanks, she didnt receive any letters.

Can you pl clarify if you dont mind:

1) 2nd Oct date is for those who accepted the option by 25/9 or is option 4 still available?
2) If she had 300 shares prior to this and she does nothing, she still has 300 shares. Shares market value will change due to new shaers but its a slightly different story.
3) I dont fully understand the payment you mention. Can you kindly explain.

sabretoothtigger

The rights are worth money. The right to buy a Ferrari for £10 would be a very valuable option.
Its not quite that good but this is a right to buy a Barc share for 180p I think it is, hence its worth will be sold and payment given to the shareholder. Its basically market minus rights price

grizzly1911

xyz123 wrote: »

thanks, she didnt receive any letters.

Can you pl clarify if you dont mind:

1) 2nd Oct date is for those who accepted the option by 25/9 or is option 4 still available?
2) If she had 300 shares prior to this and she does nothing, she still has 300 shares. Shares market value will change due to new shaers but its a slightly different story.
3) I dont fully understand the payment you mention. Can you kindly explain.

AIUI
1.)The 25/9 cut off was for options 3&4 via the Barclays special broker service. The chance to do 3&4 via a standalone broker may still be available.

2/10 date is the date for accepting and paying for the full rights option or confirming you don't want them to Barclays. I would assume this is also the final date for attempting option3&4 via a standalone broker.

2.) The value of her existing shares is at the price currently being shown for barc.l or £2.658 as at close tonight so a reduction on peak pre ex rights price of around £3.06. Dividends may be diluted going forward as there will be more shares in circulation.

3.) As ST has said the rights allowed the purchase of additional shares at £1.85 where you held the rights. If you had exercised option 3 or 4 the price that would have been received would have been based on say £2.65 less£1.85 less dealing costs and a margin. By simply allowing them to lapse that that residual price is not so readily ascertained. It may be lower if no one wants to mop up the rights.

sabretoothtigger

Noticed this on one broker, got till tomorrow to act -

Barclays rights issue

All elections for the rights issue must be made by midnight on Sunday 29th September

We will not debit cash from your bank account for the rights issue so you must ensure that the correct account (share dealing account, ShareBuilder, stocks & shares ISA or SIPP) is funded prior to the closing date.

Which company is it actually

xyz123

Thanks very much to all. She decided to take up the options and buy extra shares at reduced cost. She has given instructions to broker so hopefully it will go through. ta