HBOS Rights Issue

gazz

Got the details last night, I understand what it is all about and read a number of other threads on this site. But what I don't understand are the 2 different options to not take up the offer (option D & E)
One is sell you rights, and the other is do nothing and let your rights be sold.

Can anybody explain to help me decide?

Thanks Gary

Banderman

http://forums.moneysavingexpert.com/showthread.html?t=887245

gazz

Banderman wrote: »

http://forums.moneysavingexpert.com/showthread.html?t=887245

Saw that post but did not see the answer to my question.

gazz

gazz wrote: »

Got the details last night, I understand what it is all about and read a number of other threads on this site. But what I don't understand are the 2 different options to not take up the offer (option D & E)
One is sell you rights, and the other is do nothing and let your rights be sold.

Can anybody explain to help me decide?

Thanks Gary

Does nobody have any views on this, there must be lots of people with shares.

earlgrey_3

gazz wrote: »

Got the details last night, I understand what it is all about and read a number of other threads on this site. But what I don't understand are the 2 different options to not take up the offer (option D & E)
One is sell you rights, and the other is do nothing and let your rights be sold.

Can anybody explain to help me decide?

Thanks Gary

It's your choice Gazz. Do you think HBOS is a good investment at 275p?

If you want advice from brokers then yesterday, June 24, analysts at Collins Stewart upgraded HBOS to hold with a target price of 375p. They say the current valuation is already discounting extremely negative news.

Or you can believe Panmure Gordon who maintained a "sell" rating on HBOS Plc on 20 June with their new target price reduced from 350p to 250p.

You pays your money and takes your choice. You won't get expert opinion on where the price will go on a site like this and those willing to give it are always the least expert of all. Your guess is probably as good as anyones.

As a general rule prices are depressed during a rights issue for several reasons and often go on to do well. But these aren't normal times especially for bank shares.

debbie42

I think the OP was asking about not taking up the rights, and the fact that there are two options for that? I haven't seen the offer, but would guess it's a bit like the RBS one where you could ask to sell the rights early, at the current market worth, or wait for them to lapse and get whatever the rights value became after the registrars had disposed of the rights?

It's pretty academic at the moment with this particular rights issue as isn't the share price below the rights offer? In which case neither option will make any money.

skoolmaster

S E L L your rights

no short term gains from HBOS (or any other banks in the immediate future)
only BUY or TAIL SWALLOW for a Long-term (10 years timescale)

earlgrey_3

debbie42 wrote: »

I think the OP was asking about not taking up the rights, and the fact that there are two options for that? I haven't seen the offer, but would guess it's a bit like the RBS one where you could ask to sell the rights early, at the current market worth, or wait for them to lapse and get whatever the rights value became after the registrars had disposed of the rights?

It's pretty academic at the moment with this particular rights issue as isn't the share price below the rights offer? In which case neither option will make any money.

You're right Debbie, he did. They were trading at 294.5p at one point today and closed at 292p.

I think he actually has three options to dispose of the unloved rights. I believe HBOS has arranged free selling of rights prior to the closing date up to 11 July(?) or he could sell through a broker or can wait and let them lapse. Would probably depend on the quantity and the details of the free sale. For a small quantity taking up the offer of the free sale *might* be the best bet on balance but that could alter depending on the way the price moves.

hazadaza

I got the same letter today about my parents shares. I think i'm opting to go with Option C, the tail swallow, as it seems to be a "no lose" situation, which is good for me as i am very new with shares. Any other advice would be a great help!

kinola67

I'm new to it too and have only 46 rights allocated to me, I was also thinking why would someone elect to do nothing if the tail swallow option is a 'no lose' situation. Am I right in saying there are no charges involved with this option? Maybe I should 'do nothing' as I don't have the time or energy to read through the 192pg doc and I might get a small cheque in the post sometime in the future...maybe...depending... Can anyone help??

gazz

Thanks for your replies, but I still do not know how the price I get if HBOS sell them for me if I (option D) sell all your rights or (option E) do nothing and so they expire.
Sorry if this is simple question.

Gary