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HBOS rights issue sinks

http://www.ft.com/cms/s/0/82e163c6-5371-11dd-8dd2-000077b07658.html?nclick_check=1

Underwriters braced for hit as HBOS shares slide

By Chris Hughes and Peter Thal Larsen
Published: July 16 2008 21:05 | Last updated: July 16 2008 22:24

Underwriters to the HBOS rights issue were Wednesday night preparing to pick up the tab for the UK mortgage bank’s £4bn cash call after a fresh slump in the stock made it highly likely that shareholders would shun the fundraising.
HBOS shares fell as much as 13.5 per cent in morning trade, and closed down 2 per cent at 254.5p, 7.5 per cent below the 275p subscription price. Investors have until Friday morning to take up their rights, but bankers said most would have made a decision by later Thursday.
If the underwriters are forced to honour their commitment as buyer of last resort for the shares, it will be the highest profile offering to fail since the stock market crash of October 1987 left investment banks holding most of a £7bn share issue by BP.

Failure of the UK’s fourth-largest rights issue is also likely to add fuel to the debate surrounding this type of fundraising, with many bankers and investors calling for the rights issue timetable to be shortened.
There had been hopes that leading shareholders in HBOS would back the fundraising if the bank’s shares stayed only slightly below the issue price, as they had until this week. But the recent global sell-off in financial stocks has dashed those hopes, leaving HBOS dependent on a substantial sectoral rally Thursday.
“I would think that [institutional investors] would let it lapse. The market situation has become more extreme. I’d be amazed if it was taken up at the last minute,” said one big shareholder. At least two big shareholders had decided not to take up their rights, investors said. Meanwhile, financial advisers have been advising HBOS’s small shareholders to sit tight.
People close to HBOS on Wednesday night stressed that the bank would receive £4bn in cash regardless of the outcome of the rights issue, and defended the decision to boost its capital reserves. They also argued that the slump in the shares, which have lost half their value since the bank unveiled the fundraising in April, reflected a broader sell-off in the sector.
As much as half of the issue might have been sold to sub-underwriters, bankers said, leaving Morgan Stanley and Dresdner Kleinwort, the lead underwriters, on the hook for about £1bn each. At Wednesday’s closing price, that would leave them with a paper loss of £75m each, although this will be mitigated by fees and hedging.

setmefree

agent_orange wrote: »

I've a few bob on a good day for barc tomorrow. Buy on the dips, sell on the rise.
Big share price fluctuation is what the trader is looking for. You can make money on the way down as well.

Well there you go then, clear proof that no one really gives a toss. it's more of a point of making money as agent orange has stated above...:beer:

:rotfl::rotfl::rotfl::rotfl:

setmefree

YorkshireBoy wrote: »

Just been on the news that HBoS have announced 100's of job losses this evening.

Are we going to gloat about that as well, and accompany such gloating with lots of laughing emoticons?

gloat????


Chief executive Andy Hornby led the way in what the bank said was a "demonstration of confidence" in the stock, splashing out more than £400,000 on 92,812 shares with his annual cash bonus last Thursday.

Shares in HBOS ended the week at 473.75p, netting Mr Hornby a paper profit of more than £25,000 from his morning share swoop.
He and the other staff involved had been paid their annual cash bonuses on the Thursday.

Now that's gloating, especially when billions of pounds of public funds had to be injected into the Banking Industry, doh i know lets wait for the government to get the Bof E to stump up some cash, and when it does we can all make a nice profit (not)..

The difference between other Banks and HBOS is that others didn't make allegations about rumours and short selling just because their share price dropped.. you can only cry wolf so many times, and when the FSA made a statement of no evidence found ,well confidence in HBOS was obviously going to drop..

setmefree

Good start today 270.50

http://www.youtube.com/watch?v=QIwMppB3ZNQ

purch

Good start today

Yep.............everything that was wrong with the Banking sector, has suddenly changed overnight :rotfl: :rotfl:

setmefree

purch wrote: »

Yep.............everything that was wrong with the Banking sector, has suddenly changed overnight :rotfl: :rotfl:

LMFAO

:rotfl::rotfl::rotfl::rotfl:265.50 , PUT MORE BATTERIES IN THE TICKER

setmefree

Slowing down a bit now 260.75



http://www.youtube.com/watch?v=UHBDVau_2W4

setmefree

270.50 a little bit more and the shareholders might just about break even

http://www.youtube.com/watch?v=3rUQ056RAe4

something_girl

well with all these people opening up the 10% saver account, hopefully that will boost the bank?

setmefree

something_girl wrote: »

well with all these people opening up the 10% saver account, hopefully that will boost the bank?

Well you would have thought so 267.25

http://www.youtube.com/watch?v=t_-sRQRPgss