Bradford and Bingley Shares Offer - Should I buy?

babyblooz

Hello, as we are shareholders in Bradford and Bingley, we have received a letter each offering us the chance to buy shares at 48% below going rate (I think thats about right) but I don't know if I should or not? What is the collective wisdom of MSE's at the moment, buy or not?

Kez100

It's not 48% below now!

babyblooz

it says its a 48% discount on the closing price at 13th May. They are offering 16 shares at a price of 82p each, for every 25 shares that you already hold.

I only got the original shares because we had accounts with them, and I don't know much about shares and when to buy or when to sell, so thought the clever people on here might give me some advice!

Bennifred

babyblooz wrote: »

Hello, as we are shareholders in Bradford and Bingley, we have received a letter each offering us the chance to buy shares at 48% below going rate (I think thats about right) but I don't know if I should or not? What is the collective wisdom of MSE's at the moment, buy or not?

I'd love to know whether this is an advantageous offer or not, too!

dianasnan

closed at 101.5 today so definitely not 48% off , in fact only a saving/gain of 19p depending on how you look at it.

Speculator

see this thread http://forums.moneysavingexpert.com/showthread.html?t=914855

knicol46

On start of business on Tue 17 June 2008 the shares will go EX which based on the figures giving will mean the share price will be reduced by 36% based on the closing price on the Mon 16 June 2008.

Being given the offer to buy at 82p - 16 new shares for 25 old was an attractive offer when it was released however the price has now dived so much I personally will not be buying the additional shares (unless the share price recovered to over £1.40) but will be selling my shares at the highest price on or before Mon 16 June 2008 I can secure them at to sell them. Then would consider buying them again after the EX date as at the very least the money I receive for selling should allow myself to top-up my share holding at no additional cost.

knicol46

On start of business on Tue 17 June 2008 the shares will go EX which based on the figures giving will mean the share price will be reduced by 36% based on the closing price on Mon 16 June 2008.

Being given the offer to buy at 82p - 16 new shares for 25 old was an attractive offer when it was released, however the price has now dropped so much I personally will not be buying the additional shares (unless the share price recovered to over £1.40) but will be selling my shares at the highest price on or before Mon 16 June 2008.

Would consider buying them again after the EX date as at the very least the money I receive for selling them (even at a loss) should allow myself to top-up my share holding at no additional cost and therefore reduce the break even point.

Everyones values will be different based on the orignal prices paid but this plan works for me.

Cozworth806

The rights have a value, and there is no guarantee that the price iwll drop beyond where it is now, less the right value.
If you want to you can also sell the rights into the market, or sell enoug to buy shares @82p at no cost to you (ie sell 5 rights and buy the 6th)

flossy_splodge

Hey cosworth806, can you please explain this a bit more? Saw similar comments on a thread about BOS shares/rights issues buit didn't really understand exactly how to do it.
Thanks:o

earlgrey_3

flossy_splodge wrote: »

buit didn't really understand exactly how to do it.

In the prospectus there'll be a date for when the shares go "ex-rights". At that point the shares and rights can be traded separately through a stockbroker. You can sell all or part of your allotment.

If you don't take up the rights offer the rights will be sold for you after the closing date and you'll be sent a cheque. For someone with just a couple of hundred shares that would normally be the most cost effective but the downside is you don't know in advance what you'll get for them.