Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • DIYhelp76
    • By DIYhelp76 16th May 19, 5:31 AM
    • 90Posts
    • 8Thanks
    DIYhelp76
    M&S Rights Issue - their email - sell rights?
    • #1
    • 16th May 19, 5:31 AM
    M&S Rights Issue - their email - sell rights? 16th May 19 at 5:31 AM
    Hi

    Hope someone on this forum can help.

    An elderly relative holds M&S Shares.

    She's received an email about some "rights issue" M&S are having to do with raising money for a link up with Ocado.

    The email says to ensure your shareholding is registered so that when the time comes you can buy OR SELL rights.

    Know next to nothing about shares and stuff. Can anyone tell me in a nutshell if this means my relative can sell some "rights" to make some money? Don't really understand what this means.

    She doesn't want to sell her shareholding as the shares are at a bad price at the moment.

    Many thx in advance.
Page 1
    • MovingForwards
    • By MovingForwards 16th May 19, 6:00 AM
    • 1,213 Posts
    • 1,483 Thanks
    MovingForwards
    • #2
    • 16th May 19, 6:00 AM
    • #2
    • 16th May 19, 6:00 AM
    I would be phoning m&s on the number held on official paperwork and not responding to the email / clicking any link or calling the number on the email.

    See what m&s say needs to be done.
    • Malthusian
    • By Malthusian 16th May 19, 9:24 AM
    • 5,876 Posts
    • 9,732 Thanks
    Malthusian
    • #3
    • 16th May 19, 9:24 AM
    • #3
    • 16th May 19, 9:24 AM
    I am also a bit suspicious of the mention of "selling her rights". Typically in a rights issue the shareholder has the option to pay money to buy more shares at a special price.

    Has she given her email address to the M&S investor relations team?

    If she doesn't want to invest more money in M&S she should simply do nothing.
    • alanq
    • By alanq 16th May 19, 9:46 AM
    • 4,154 Posts
    • 2,732 Thanks
    alanq
    • #4
    • 16th May 19, 9:46 AM
    • #4
    • 16th May 19, 9:46 AM
    I am also a bit suspicious of the mention of "selling her rights". Typically in a rights issue the shareholder has the option to pay money to buy more shares at a special price.
    Originally posted by Malthusian
    Nothing suspicious with that. If one does not wish to take up the offer of discounted shares one can sell the rights to someone who does. I have done this myself.
    Last edited by alanq; 16-05-2019 at 9:54 AM.
    • steampowered
    • By steampowered 16th May 19, 10:06 AM
    • 3,309 Posts
    • 3,342 Thanks
    steampowered
    • #5
    • 16th May 19, 10:06 AM
    • #5
    • 16th May 19, 10:06 AM
    This is a perfectly normal part of a rights issue.

    During a rights issue, all shareholders are given a right to buy some of the new shares, at the rights issue price, proportionate to their shareholding.

    Any shares which are not taken up by existing shareholders will then be offered to new shareholders.

    Imagine that the rights issue price is £10 per share. But - when the rights issue finishes - the stock market price is £12 per share.

    Your relative could either:
    - Take up her right to buy more shares at £10 per share.
    - Do nothing - in which case her rights are sold to a new investor - and she pockets the £2 the difference.

    If your relative wants to buy more M&S shares, she should take the opportunity to buy more shares at the discounted price.

    If your relative does not want to buy more M&S shares, she should just sell her rights. This will probably happen automatically if she does nothing.

    Nothing to be concerned about this is all normal practice.
    • DIYhelp76
    • By DIYhelp76 17th May 19, 4:41 AM
    • 90 Posts
    • 8 Thanks
    DIYhelp76
    • #6
    • 17th May 19, 4:41 AM
    thank you
    • #6
    • 17th May 19, 4:41 AM
    Steampowered,

    Thank you so much for taking the time to reply and for your clear and helpful explanation.

    I understand now so can advise my relative and she can decide what she'd like to do.
    • Tom99
    • By Tom99 17th May 19, 5:38 AM
    • 4,259 Posts
    • 2,997 Thanks
    Tom99
    • #7
    • 17th May 19, 5:38 AM
    • #7
    • 17th May 19, 5:38 AM
    If she sells her rights she will reduce the value of her shareholding, if she takes up the offer she will increase the value of her shareholding by investing new money.
    Sometimes there is a 3rd option which is to sell some rights and use that money to take up the remaining rights, so a neutral position which will leave the same amount as now invested in M&S shares.
    • Tom99
    • By Tom99 18th May 19, 12:42 PM
    • 4,259 Posts
    • 2,997 Thanks
    Tom99
    • #8
    • 18th May 19, 12:42 PM
    • #8
    • 18th May 19, 12:42 PM
    M&S are due to announce details of the rights issue on Wednesday along with their full year results.
    • AnotherJoe
    • By AnotherJoe 18th May 19, 12:44 PM
    • 14,604 Posts
    • 17,418 Thanks
    AnotherJoe
    • #9
    • 18th May 19, 12:44 PM
    • #9
    • 18th May 19, 12:44 PM
    If she sells her rights she will reduce the value of her shareholding, if she takes up the offer she will increase the value of her shareholding by investing new money.
    Sometimes there is a 3rd option which is to sell some rights and use that money to take up the remaining rights, so a neutral position which will leave the same amount as now invested in M&S shares.
    Originally posted by Tom99

    Did you mean in the generality, eg if everyone sold their rights their would be more shares? Because if she owns say £10k worth of M&S shares now they wont be taking money off her shares.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Tom99
    • By Tom99 18th May 19, 12:56 PM
    • 4,259 Posts
    • 2,997 Thanks
    Tom99
    Did you mean in the generality, eg if everyone sold their rights their would be more shares? Because if she owns say £10k worth of M&S shares now they wont be taking money off her shares.
    Originally posted by AnotherJoe
    Say she owns £10k worth of shares and the rights to more shares can be exercised at a cost of £2k, or they can be sold say for £2k.
    If she sells the rights for £2k then the shares she retains (same number as owns now) are likely to be worth £8k. If she exercises her rights and invests £2k then the increased number of shares she owns are likely to be worth £12k.
    Alternatively she may be able to sell half the rights for £1k and exercise the other half paying £1k after which her increase number of shares are likely to be worth £10k ie the same value as now.
    Last edited by Tom99; 18-05-2019 at 12:59 PM.
    • AnotherJoe
    • By AnotherJoe 18th May 19, 1:37 PM
    • 14,604 Posts
    • 17,418 Thanks
    AnotherJoe
    Ok that works in the generality but for any one individual seller it doesn't make a jot of difference what they do unless they are say Woodford with £2bn worth of rights (just an example I don't know that he has) OP's Mum selling her £2k is irrelevant and IMO it's totally misleading to state that if she sells her rights her shares will drop in value as if they are specially marked or she can control the share price. The shares will do what they do when you take all the rights uptake into account. One small shareholders holding is irrelevant.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Tom99
    • By Tom99 18th May 19, 1:46 PM
    • 4,259 Posts
    • 2,997 Thanks
    Tom99
    Ok that works in the generality but for any one individual seller it doesn't make a jot of difference what they do unless they are say Woodford with £2bn worth of rights (just an example I don't know that he has) OP's Mum selling her £2k is irrelevant and IMO it's totally misleading to state that if she sells her rights her shares will drop in value as if they are specially marked or she can control the share price. The shares will do what they do when you take all the rights uptake into account. One small shareholders holding is irrelevant.
    Originally posted by AnotherJoe
    M&S shares are currently about 268p and if M&S follow the normal form the rights issue will give existing shareholders the right to buy a certain number of new shares at a discounted price, lets say 200p. When those new shares go live there will be an increase in the number of M&S shares and they will be worth less that 268p per share. How much less depends how many new shares are issued and the level of discount they are offered at.
    If OP's Mum sells her rights then the value of her shares will drop by about the same amount as she gets for selling the rights.
    Last edited by Tom99; 18-05-2019 at 1:54 PM.
    • Jingscrivvens
    • By Jingscrivvens 2nd Jun 19, 4:44 PM
    • 13 Posts
    • 4 Thanks
    Jingscrivvens
    My wife's an M&S shareholder, and I'm trying to get my head round this Rights Issue offer. I'm not clear how taking up all her rights will be beneficial.
    For ease of calculation, say she has 1000 shares: that means she has rights to 200 more, at a cost of 200*£1.85=£370. But, prior to the offer affecting the price (e.g. on 21/5/19), the share price was £2.60, so back then, her 1000 shares were worth £2600. If we add to that the £370 she'd pay to exercise the offer, her "stake" would be £2970. But she would now have 1200 shares. So in order not to lose money, the share price, after the dust settles with the rights issue, would have to be at least £2970 / 1200 = £2.47 a share.
    However, what I can't understand is how that squares with the fact that there's now 20% more shares around. Wouldn't that mean that, everything else being equal, the £2.60 share price will settle at around 20% lower, i.e. £2.08?
    I'm scratching my head. Am I missing something?
    • Tom99
    • By Tom99 2nd Jun 19, 5:42 PM
    • 4,259 Posts
    • 2,997 Thanks
    Tom99
    My wife's an M&S shareholder, and I'm trying to get my head round this Rights Issue offer. I'm not clear how taking up all her rights will be beneficial.
    For ease of calculation, say she has 1000 shares: that means she has rights to 200 more, at a cost of 200*£1.85=£370. But, prior to the offer affecting the price (e.g. on 21/5/19), the share price was £2.60, so back then, her 1000 shares were worth £2600. If we add to that the £370 she'd pay to exercise the offer, her "stake" would be £2970. But she would now have 1200 shares. So in order not to lose money, the share price, after the dust settles with the rights issue, would have to be at least £2970 / 1200 = £2.47 a share.
    However, what I can't understand is how that squares with the fact that there's now 20% more shares around. Wouldn't that mean that, everything else being equal, the £2.60 share price will settle at around 20% lower, i.e. £2.08?
    I'm scratching my head. Am I missing something?
    Originally posted by Jingscrivvens
    No because M&S have received £1.85 for each of the new shares issued so the market capitalisation of M&S now takes account of all the cash they have raised. Therefore your £2.47 calculation is nearer the mark.
    • tel_
    • By tel_ 2nd Jun 19, 7:34 PM
    • 61 Posts
    • 11 Thanks
    tel_
    I've hit a stumbling block. Here's my lack of understating of the rights issue:

    I have received documents explaining the rights issue for current M&S shareholders, and have decided to take Option 1 on the form: Take Up ALL My RIghts. I did this online using the ref no and allotment no from the Provisional Allotment Letter. I thought I could then follow the same procedure and buy the shares that are on the other form - Form Of Instruction, but when I type in the ref no and allotment number for this it says it's not recognised.

    I thought I had a fairly clear picture of what to do when I had read the literature, but clearly not

    I take it I cannot buy the shares via the Form Of Instruction, because I have misunderstood something using the Provisional Allotment Letter?
    • Jingscrivvens
    • By Jingscrivvens 2nd Jun 19, 7:55 PM
    • 13 Posts
    • 4 Thanks
    Jingscrivvens
    No because M&S have received £1.85 for each of the new shares issued so the market capitalisation of M&S now takes account of all the cash they have raised. Therefore your £2.47 calculation is nearer the mark.
    Originally posted by Tom99
    Thanks, Tom99. Of course....M&S are now worth a lot more (approx 20%, not including the discount).
    • Jingscrivvens
    • By Jingscrivvens 2nd Jun 19, 8:00 PM
    • 13 Posts
    • 4 Thanks
    Jingscrivvens
    I've hit a stumbling block. Here's my lack of understating of the rights issue:

    I have received documents explaining the rights issue for current M&S shareholders, and have decided to take Option 1 on the form: Take Up ALL My RIghts. I did this online using the ref no and allotment no from the Provisional Allotment Letter. I thought I could then follow the same procedure and buy the shares that are on the other form - Form Of Instruction, but when I type in the ref no and allotment number for this it says it's not recognised.

    I thought I had a fairly clear picture of what to do when I had read the literature, but clearly not

    I take it I cannot buy the shares via the Form Of Instruction, because I have misunderstood something using the Provisional Allotment Letter?
    Originally posted by tel_
    I think you're trying to do the same thing twice. The top of the Form of Instruction says "Only use this form if you are unable to participate online". But you did participate online. Nice try, though
    • Tim_S
    • By Tim_S 6th Jun 19, 8:19 AM
    • 1 Posts
    • 0 Thanks
    Tim_S
    I've hit a stumbling block. Here's my lack of understating of the rights issue:

    I have received documents explaining the rights issue for current M&S shareholders, and have decided to take Option 1 on the form: Take Up ALL My RIghts. I did this online using the ref no and allotment no from the Provisional Allotment Letter. I thought I could then follow the same procedure and buy the shares that are on the other form - Form Of Instruction, but when I type in the ref no and allotment number for this it says it's not recognised.

    I thought I had a fairly clear picture of what to do when I had read the literature, but clearly not

    I take it I cannot buy the shares via the Form Of Instruction, because I have misunderstood something using the Provisional Allotment Letter?
    Originally posted by tel_
    It depends on whether your shares are held as a certificate or in the Share Service. On the M&S shareholder page, you can tell which link to click on based on the colour of the document you received, white or green. The numbers on the Form of Instruction should get you through if you’ve chosen the right link. It sounds like you may have completed the process once but, if you hold both types of shares, you'll need to complete it for the other shareholding too.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,720Posts Today

7,915Users online

Martin's Twitter
  • RT @thismorning: As a ban on rip-off bank fees is announced, @MartinSLewis explains if you can reclaim, and how to cut your overdraft costs?

  • RT @justinbones: Just looking at how the bad weather may be impacting business and the economy. Thankfully someone has already looked at th?

  • RT @bbc5live: .@MartinSLewis joins @EmmaBarnett from midday to answer your money saving questions. ???? 08085 909 693 ???? 85058 Or post your q?

  • Follow Martin