RE: Rights Issue21 Apr 2015 09:55
Good morning.
The rights issue is so that the company can raise money. For this they give you a discount (you can buy at 166p), but the existing shares are diluted, ie: they go down. You have 3 options: do nothing, and you should receive the price of the rights on the day they expire (roughtly the share price less 166)*, sell them at any time before that (eg: at time of writing they are 109p/ea), or exercise them. To exercise them you have to put up more money, in your case 666 lots of 166p ie: £1105. If you do not have this extra money available, then you should sell your rights. If you have the extra £1105, you need to think whether you have more confidence in the company now they have announced this deal - if so, you should take up the rights, ie: buy the 666 extra shares at 166p.
*You should check this with your broker