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Have opted to take up the allocation but still have a bit of leeway either to change my mind or time to place the funds with my broker. One of the ftse risers today so I guess the market likes it.
2617 @56p offer taken, wise or not ?, we shall see.
They buy because RSA lost 200m. The more money RSA lose, the better a stock RSA becomes. In a way it make sense because if RSA didn't lose the 200m, they would not have all the extra 100's of millions now. It seems that if RSA want more money, they just need to go lose some more.
I put in a limit order a while back for RSA for 90p - my target price at the time. The next day they crashed and because of an in-built systems delay on market opening I go them for about 82p. They rallied quickly, and I sold them at 90p, so a bit of a profit. Since then, we have seen the loss of the divi and a rights issue. So in my mind they are no longer worth 90p. I can buy a bank or supermarket at a book value of 1 or less and get a good divi. What will be the NAV of RSA after consolidation and when again will we see a decent divi? Hester has got his cash, when do the Shareholders see theirs? Until I get some clarity in DD Style - I am out.
Your clear advice is very much appreciated Bonz. Please keep it up because when I read these boards, there are very posters on this sight who give such a balanced view and I trust. I am taking up my RI as I have quite a lot of money left from the Vodafone payout. At 56p a share, it's a little too good to say no to.
The date and time by which you need to pay for your rights or sell the Nil-Paids. If you do nothing by this time they will lapse and you will then receive cash for them when they are eventually sold.
For those that have not had the forms of acceptance arrive yet and given the fairly tight timeline,,it is possible to phone your confirmation thru and you can buy immediately,after giving personal details to your broker. At least that is what I have just managed to do at the ''\Share Centre''
Not really very terrifying when as you say with the rights we are approx. 5% ahead. And not everyone will be in a position to take up all of their rights, which is why some will sell enough of their shares to fund their rights take-up. Agree with your view of future prospects, although there will be no Final div and next years Interim is likely to be a token payment, once divs are re-instated in full this should easily be 100p+. ATB.
Excellently put Bonz! You are quite right - I was quoting the default for empoyees of RSA with share options - so reading wrong document! Thanks for correction with great explanation and examples.
absolutely right- despite this terrifying drop ! i bought around 94/95p and am nicely ahead 5% and expect more when it is all done and pasted. Surely it`s easier just to take up the rights and then not have to not worry what the value of the nil paid will be when they are sold. As rights issues go this one is pretty undemanding
With yesterdays closing sp of 95.2p the 1000 shares would have been worth £952. If you had paid the 56p on the 375 rights it would have cost you £210 for a total investment of £1,162. And with a current sp of 88.15p your 1,375 shares would be worth £1,212 - giving you a profit of £50 or 4.3%. If you choose to sell those 375 rights for the 32p they are currently trading at you would receive £120, plus your original 1000 shares would now be worth ££881.50, meaning with a total value now of £1001.50 you would be £50 or 5.2% better off than you were yesterday - though you would now own a smaller share of RSA.
NO. They do NOT force you to take up any of your rights if you do not want to. If you let them lapse they are sold and you get the cash proceeds, less your very small share of any dealing costs.
So... If rights are selling at 32p then I reckon you will end up with around 135 free shares for every 1000 that you hold, if you do nothing. A rough calculation on price yesterday of 95p would mean your shares worth £950 yesterday will be worth around 1135 x 84.5p = £959.07, which is roughly break even!
Hi Bonz, I think the default (if you do nothing) is that they sell enough "Rights" to take up remaining rights so you end up with a few FREE shares as opposed to selling enough shares to take up all rights, which you would have to do yourself. Am I right?
Just sold rights @32p
You are correct QE, no charges to take up your rights. Also, if one doesn't want to take up their rights, and doesn't want to pay a dealing cost to sell them, they can be allowed to lapse. That way they will be taken up by the underwriters and you will receive the proceeds at the end of the RI period, ie after 9/4. ATB.
As Opium mentioned earlier, you do have the option of selling enough RSA shares to generate the cash to take up your rights. Though this will reduce your holding by 17.5% but would mean you would not have to find any new money. ATB
charged to take up rights my broker has told me.
With the sp 4p above the 'Theoretical ex-rights price' of 84.5p, the Nil-Paids (RSAN) are also 4p up on their opening price of 28.5p at 32.5p. Looks like the market likes this RI. Currently a nice little profit for those intending to take up the RI. ATB.
The future is sunny - The future is RSA!
Thanks Bonz, they have appeared now. Lets see if I can scrape something together.
You should notice in your trading account a number of Nil-Paids in the ratio of 3 for every 8 you hold. It is your choice to pay the 56p to turn them into fully paid shares, to sell them for approx. 28p (for which you will pay a dealing cost) or to let tem lapse where they will be sold after the RI closes and you will receive their value.
Your short would have been recalculated to take into the effect of the RI. With the sp up slightly on the 'Theoretical ex-rights price' you would not have made any money. ATB.
Thank you for your kind words Dear Lady. As a veteran of almost 40 years investing I've seen a few RI's in my time, they're very simple to understand and work out when you know how they work, but always seem to confuse so many people. ATB.
RI worth 17p