Whitbread rights issue

Bigbrown

I took my eye off the ball, not realising that Whitbread were doing a rights issue.  So today, a cheque has arrived for approximately half of my shares.  It looks like they have been sold for about half their value.  I was under the impression that normally a rights issue is where every one original share is exchange for 2 new shares so why I have received this cheque.

AnotherJoe

What do you mean "a cheque has arrived for approximately half of my shares"

Do you mean they've sold half and you still own half?

ischris85

Bigbrown said:

 I was under the impression that normally a rights issue is where every one original share is exchange for 2 new shares so why I have received this cheque.

What you are describing there is a bonus issue.

molerat

Didn't you read the prospectus they sent you ? The rights issue gave you the right to buy 1 additional share for every 2 held at a discount price of £15.00 each.  If you did not take up the offer your extra shares were sold.  The price they got for them was £25.50 each which was paid to you less the £15.00 offer price and costs so around £10.45 for each share you did not take up. You still have your original shares but they now only represent 2/3 of your original share in the company.

Bigbrown

I did not receive the prospectus, and was amazed to receive the cheque.  Thanks for explaining.

kinger101

Bigbrown said:

I did not receive the prospectus, and was amazed to receive the cheque.  Thanks for explaining.

On the face of it, you are better off.  You could have paid £15 each for shares now worth £21.95. A £6.95 gain per share assuming you still held today.  Instead, you're up £10.50 per share with no outlay.