Corporate Actions
Prudential Mega Rights Issue
Prudential has announced a mega rights issue. It will be the largest one in British history. Prudential are raising money to buy AIG’s Asian life assurance business. Prudential are hoping to raise GBP14.5 billion by selling shares to its shareholders. Whereas small businesses are struggling with liquidity due to lending restrictions,... learn more »
Lloyds Launches Record Rights Issue
Lloyds Banking Group today announced details of what will be the largest ever rights issue, to raise some £13.5bn in new capital from its shareholders. The rights issue is taking place in order to rebuild the group’s balance sheet, replacing capital that has been eroded following the takeover of HBOS, and will result in the group... learn more »
BA and Iberia Agree To Merge
British Airways and Spanish airline Iberia have agreed to merge in a corporate action that is likely to be effective in the 4th quarter of 2010. The merger has not been approved by the European Commission yet. Assuming that the merger will be agreed by shareholders the new company will be the Worlds third largest... learn more »
Dividend Options and Reinvestment Plans
Dividend Reinvestment Plans Many UK companies offer shareholders to reinvest their cash dividend payment automatically to buy new shares. These events are generally called Dividend Reinvestment Plans (abbreviated to DRIPs). Often PEP / ISA equity holders do not receive this option, although it is the Plan Managers decision whether or not they offer optional dividends.... learn more »
Redemption Events – Bond Maturies, Early Redemptions, Voluntary and Partials
Redemptions can be either mandatory or voluntary in nature. A vast majority of redemptions are when a bond reaches its maturity date and the capital is returned to the shareholder. For example, if you hold HSBC BANK 16.4% MTN 31/08/2009 USD, then this will mature on 31st August 2009, pay in US dollars, at... learn more »
What is a Tender Offer?
Usually in the UK when a company is planning to takeover another, a cash tender offer is made. This gives shareholders the option to accept the cash offer being made for their shares (the target company) by the bidding company. To persuade shareholders to accept the offer, the bidding company usually offers a price... learn more »
Stock Splits and Bonus Issues – Corporate Actions Explained
A Stock Split is a basic mandatory corporate action event. It is simply when the company decide to increase the number of shares in the market without adjusting the total capital, which means that the price of the shares is reduced accordingly. Stock splits are sometimes also called subdivisions, and really as far as... learn more »
What is a Consolidation? Corporate Actions Explained
A consolidation is a mandatory corporate action event, meaning that you have no options concerning the outcome. You may not even be informed that it is going to take place, so the first indication to you could be a reduction in the number of share that you own. If you spot a reduction in... learn more »
What is Meant by Pari Passu?
Pari Passu simple means equal to, in shareholding terms. If you hold a security that was received by way of a rights issue, stock dividend, or scheme of arrangement for example) the stock may be held on a temporary line before being merged with the “parent stock”. This could be because the entitlement that... learn more »
Scheme of Arrangement – Mandatory Corporate Action with Options
A scheme of arrangement / reconstruction is a court-approved agreement between a company and its shareholders or creditors/ It may effect mergers and amalgamations and may alter shareholder or creditor rights. Schemes of arrangement are used to execute arbitrary changes in the structure of a business and thus are used when a reorganisation cannot... learn more »