HBOS Rights Issue

[Dudley]

Now that the HBOS share price has dropped below the rights issue offer price of 275 pence, is there any value in taking up the offer?

[johnny37]

Not if you can buy them cheaper on the market. As I understand it existing shareholders should be able to buy at a discount (whatever that is - 30%?). I did not vote on the issue as institutional shareholder have the majority of shares but its an interesting question. What will they do next? I remember this happening a few years back with my employee sharesave offer. The offer was withdrawn and the process started again.

[BenDToy]

The rights issue is underwritten by a merchant bank(?) and will go ahead regardless. But you are right, why buy for more than you would pay on the open market - except perhaps you would save stamp duty.

[Dudley]

Thanks guys, rather what I thought but good to have your confirmation. Might be worth buying when the price looks to be near the bottom because I believe they will recover in the medium term. Too big to continue the downward spiral for very much longer I would think. The mercant banks must be wringing their hands.

[Captain Spod]

Hope I'm not too late with this. The press yesterday (29 Jun) reported that so many people had shorted this issue that the demand is likely to put the "stockmarket" price up to higher than the rights price. So the gamblers may lose, but you might be able to turn a profit. All about timing isn't it? (Frustratingly)