Agreed the sp has recovered to pre-RI levels quicker than is usual, but this is just following the pattern of every major RI I've been involved in over the last 40 years - the sp does eventually recover. I bought IMT shares in their RI @ 480p, they're now worth over £20, and the recent RI's in NEX and NG have also been very profitable. If the company is basically sound then a RI is the perfect way to get a cash injection to see them through a difficult period, along with the £300 million from the sale of their Eastern European operations they are now sitting on close to £1 billion to strengthen their business. The City obviously like the terms of this RI as the sp has risen 12% from the ex-rights price and is now within a whisker of the pre-RI sp of 95.2p. Fully expect this to be 100p+ soon - barring Stock Market falls - and with a token 2014 Interim div being talked about and the prospect of a return to divs with the 2014 Final this should be back to pre-trouble levels within 12-18 months IMHO. ATB.
Increase in net assets
RSA has today announced the sale of its operations in the Baltics and Poland for £300m. The transactions are expected to add around £200m to the Group’s tangible net assets, improving the Group’s capital strength.
I agree that the cash helps a bit, but not to the extent that 37.5 % more shares has no effect on the SP. Most sp's fall after a substantial dilution. Time will tell.
One of the main reasons that RSA is now worth more than it was before is because we have just given it a £750 million cash injection in the RI, and it is now in a stronger position than it was before. ATB.
Seems logical in one way. However, it is a fact that an SP always goes up once divis start or resume. Over on the Lloyds board everyone is expecting a jump in SP once divis resume aftyer a 5 year wait.
Look at it this way ,If you dont have to pay rent ,Would you be worth more and better off !
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