BOS share offer

[forthhibby]

the offer at 38p per share looks too good to be true considering there current price, can anyone explain in laymans terms how this works

[ancient hibee]

You will see today that the price has dropped to around 75p.Basically a company can issue shares at whatever price it thinks the market will welcome.Then you take the new shares add them t0 the existing ones and arrive at a price for the new combined total of shares in issue.The present offer is discounted and the market reckons that there is a built in 25/35p profit in the shares at the price of 38p.This is because Lloyds wants a big take up so that it can use the proceeds to reduce the tax payers holding of preference shares on which it has to pay an annual interest payment.Worth a small punt I think even though there is such a long way to go.Once it is known how many shares existing shareholders are taking up others can buy.

[forthhibby]

cheers for that AH, i think i'll take a wee punt

[ancient hibee]

cheers for that AH, i think i'll take a wee punt

Only remember I mentioned it if it goes well:greengrin(written from the debtors prison)

[Hibs Class]

You will see today that the price has dropped to around 75p.Basically a company can issue shares at whatever price it thinks the market will welcome.Then you take the new shares add them t0 the existing ones and arrive at a price for the new combined total of shares in issue.The present offer is discounted and the market reckons that there is a built in 25/35p profit in the shares at the price of 38p.This is because Lloyds wants a big take up so that it can use the proceeds to reduce the tax payers holding of preference shares on which it has to pay an annual interest payment.Worth a small punt I think even though there is such a long way to go.Once it is known how many shares existing shareholders are taking up others can buy.

I think this is only part of the reason, because the Govt. is underwriting the issue so Lloyds will receive these funds come what may. Their bigger driver is to have as many existing shareholders take up the issue as possible, to keep the Govt's shareholding below 50%, and as it is currently at 43% they need to make the offer as attractive to shareholders as they can.

[Westie1875]

I will certainly be taking advantage of it with a view to a long term gain.

Staff are being restricted to buying 60% of whatever their current shareholding is at the discounted price, I assume the same rule applies to all current shareholders?