National Grid Rights Issue

C_Mababejive

EthicsGradient said:

C_Mababejive said:

Bottom line, if you have sufficient funds to take up all your rights, then i guess thats the best thing to do? The issue of new shares is already baked into the share price and what we are seeing is just minor tremors after the initial shock wave. There is also an ex divi date very soon. Surely the share prices will not drop as low as 6.45 any time soon once the dust has settled??

If the ex-dividend price remains above £6.45 (so !!!!!!-dividend 6.45+0.3912 = £6.8412), then if you don't take up your rights, they'll be sold for you, and you'll get the proceeds. The market should (and has been, so far) keeping the full share and nil-paid price in line, so that one is not inherently preferable to the other. It's really a question of whether, at the current price, you fancy investing more in National Grid, without having to pay trading fees to get it. If you don't, then letting the rights lapse means you'll get a bit of cash back from your investment, but will be entitled to lower dividends in the future.

Thanks,
So assuming you dont want to front up any more money, is it likely that a better price for the rights will be obtained just by letting them lapse?

Im guessing the big institutions dumped huge amounts of rights on the market at the earliest opportunity to get the best price, now theres a glut so the price is a bit depressed but soon they will seek to buy them up again cheaper to get the right to buy hopefully discounted shares? Is there a minimum obtainable price from the underwriters or is it fully exposed to the market ? tnx

Also will i be deemed to hold the new shares on the upcoming ex divi date? its a tight deadline. I think its ex divi on 6th june??

EthicsGradient

C_Mababejive said:

EthicsGradient said:

C_Mababejive said:

Bottom line, if you have sufficient funds to take up all your rights, then i guess thats the best thing to do? The issue of new shares is already baked into the share price and what we are seeing is just minor tremors after the initial shock wave. There is also an ex divi date very soon. Surely the share prices will not drop as low as 6.45 any time soon once the dust has settled??

If the ex-dividend price remains above £6.45 (so !!!!!!-dividend 6.45+0.3912 = £6.8412), then if you don't take up your rights, they'll be sold for you, and you'll get the proceeds. The market should (and has been, so far) keeping the full share and nil-paid price in line, so that one is not inherently preferable to the other. It's really a question of whether, at the current price, you fancy investing more in National Grid, without having to pay trading fees to get it. If you don't, then letting the rights lapse means you'll get a bit of cash back from your investment, but will be entitled to lower dividends in the future.

Thanks,
So assuming you dont want to front up any more money, is it likely that a better price for the rights will be obtained just by letting them lapse?

Im guessing the big institutions dumped huge amounts of rights on the market at the earliest opportunity to get the best price, now theres a glut so the price is a bit depressed but soon they will seek to buy them up again cheaper to get the right to buy hopefully discounted shares? Is there a minimum obtainable price from the underwriters or is it fully exposed to the market ? tnx

Also will i be deemed to hold the new shares on the upcoming ex divi date? its a tight deadline. I think its ex divi on 6th june??

A better price? I don't know (on another board, someone claimed it's always worse to let them lapse, but I pointed out that you don't pay trading fees if you let them lapse, and asked for evidence that it's always worse, and they've suggested none). I have no idea if there's been a big dump of the rights. The overall slump in price indicates there's been more demand to sell than buy, certainly. Lapsed rights should get the difference between the ex-dividend price and the 645p that rights hold have to pay to convert those rights into proper shares (ex-dividend because, no, the new shares can't get the 6th June dividend). 

And today I found out you can't spell the Latin for "with" on MSE, which you normally use as the opposite to "ex-", because it gets converted to "!!!!!!", being a "rude word" in other circumstances (it's the 4th to 6th letters of "circumstances", as it happens).

soulsaver

Nosmo_King_2 said:

What are my likely options as my NG shares are held in an ISA and am close to the annual allowance?

If you want to exercise your rights and no room in your ISA, you can take them up unwrapped. You may need a call to your broker - HL does, I noticed in passing.

Chartac

I have shares and don't really want anymore.  However on reading one of the blogs said I won't receive as much dividend?  Am I going to lose my original shares as I won't get as much dividend? My shares are held in share certs.

EthicsGradient

Chartac said:

I have shares and don't really want anymore.  However on reading one of the blogs said I won't receive as much dividend?  Am I going to lose my original shares as I won't get as much dividend? My shares are held in share certs.

If you don't put any more money in then yes, you will receive lower dividends than before. You won't lose your original shares, it's just that the dividend per share will go down.

SS069BB9

EthicsGradient said:

Chartac said:

I have shares and don't really want anymore.  However on reading one of the blogs said I won't receive as much dividend?  Am I going to lose my original shares as I won't get as much dividend? My shares are held in share certs.

If you don't put any more money in then yes, you will receive lower dividends than before. You won't lose your original shares, it's just that the dividend per share will go down.

To receive full dividends do we need to buy all the shares offered? - I quite like the dividend payments as they are.

ignoramus_2

I have only just received info about National Grid Rights Issue this morning 29th May with a deadline of 31st May. This should be illegal!

narries

Unlike others, I am not into stocks and shares.  I got my National Grid shares  as British Gas shares back in the 1980's I think (???) .  I have done nothing at all with them all those years. I know they got divided up .

I got a letter this morning. It may as well be written in Dutch as far as I am concerned. I have no idea what I am supposed to do or why.   I dont want to sell my original shares ( which only amounts to some 71 shares anyway apparently).  I just do not get it.

I can see that the time factors are mighty close - one needing to be responded to by 31st May.  I only got the paper lunchtime.  My mother, who recently passed away as kit happens , also has some of these shares - and I am still awaiting probate -  and she hasn't even had a letter yet.  How the hell are you supposed to know what to do or not do? 

If I just do nothing, is that going to leave me without any shares as they take them off me or something?  I am not sure I fancy  shelling out  £129  to buy more shares  as I have no idea what any of them are worth anyway. 

It seems to me they are pulling a fast one here.  I would value being given simple instructions on what is best please. Thank you.

Chartac

So my 663 shares will devalue on the dividends paid but if I purchase the 124 shares on offer will I get the higher dividend on all my shares or just the 124? This seems like blackmail by National Grid to force shareholders to cough up.  I have had my shares since British Gas as a former employee on profit sharing scheme and on the split had 3 lots of shares.  Shell pay better dividends. I sold my Centrica

EthicsGradient

SS069BB9 said:

EthicsGradient said:

Chartac said:

I have shares and don't really want anymore.  However on reading one of the blogs said I won't receive as much dividend?  Am I going to lose my original shares as I won't get as much dividend? My shares are held in share certs.

If you don't put any more money in then yes, you will receive lower dividends than before. You won't lose your original shares, it's just that the dividend per share will go down.

To receive full dividends do we need to buy all the shares offered? - I quite like the dividend payments as they are.

Yes, I think that's right. See Appendix 1 here: PowerPoint Presentation (nationalgrid.com) They say their intention is to carry on paying out the same total (£2.2 bn in 2024) in dividends, going up with inflation. That means to keep the same personal dividend, you have to buy all the shares offered, to keep your percentage of the company that you own level. That matches with the graph on the right there - in 2024, the year's dividend was 58.52p per share. So if you owned 24 shares, you got £14.04 in dividends. If you take up the 7 shares offered, you then have 31 shares, which at the new expected rate of 45.3p per share is £14.04 again.