Corporate Actions

Rolls-Royce Group – Restructure

Rolls Royce have announced that they are performing a company restructure today.

For each share held in Rolls-Royce Group plc (ordinary shares of 20p) shareholders will receive 1 new share of Rolls-Royce Holdings plc. in replacement.

  • Effective Date: 23rd May 2011
  • Old: Rolls-Royce Group ISIN GB0032836487
  • New: Rolls-Royce Holdings ISIN GB00B63H8491

The value of your shares will be not affected by this change.

If you have any questions regarding this issue you can call the Market Operations team at the London Stock Exchange on 020 7797 4310 who will advise.

Note that this is not in related to the recent news that a Trent 900 Rolls-Royce engine failed on a Quantas A380 earlier this month. It is just a corporate restructure.

Rolls-Royce share price did dip today to 620p, down 15p. You can follow the latest share prices on the Rolls-Royce website: www.rolls-royce.com/investors/detailedshareprice/index.jsp

Commerzbank EUR5.3 Billion Rights Issue

Commerzbank is hoping to raise EUR5.3 billion by means of a rights issue. Commerzbank plans to offer 2.44 billion new shares at a price of EUR2.18 each. This represents a 45 percent discount.

Shareholders will be able to subscribe to 10 new shares for every 11 held. The sub-rights will be trading from the 24th of May until 6th of June.

Commerzbank Rights Issue Terms and Dates

  • Ex-date: 24/05/11
  • Pay date: 07/07/11
  • Ratio: 10 new for 11 held
  • Call Price: EUR2.18

The purpose of the rights issue is to raise capital to help repay outstanding loans. Currently Commerzbank is around EUR14.3 billion in debt.

Commerzbank bought out Dresdner Bank 2 weeks before Lehman Bros collapsed. It received EUR18 billion bail out from th German government but still has huge debts to clear.

 

Royal Dutch Shell plc Scrip Dividend Plan

Royal Dutch Shell plc have announced their first quarter 2011 scrip dividend. They are giving shareholders the option to receive dividends in cash or in shares via a Scrip Dividend Programme.

  • Dividend: Reference Share Price of $0.42 per A ordinary share (“A Share”) and B ordinary share (“B Share”).
  • Reinvestment: Reference Share Price $34.986

Shareholders who do not join the Script Dividend Programme will continue to receive in cash any dividends declared by RDS.

Key Corporate Action Dates

  • Ex-dividend date – May 11, 2011
  • Record date – May 13, 2011
  • Scrip reference share price announcement date -May 18, 2011
  • Closing of scrip election and currency election  – May 27, 2011
  • Pounds sterling and euro equivalents announcement date – June 3, 2011
  • Payment date – June 27, 2011

Learn more from Shell’s website: Royal Dutch Shell plc Scrip Dividend Programme

 

Intesa Sanpaolo SPA Rights Issue – May 2011

Intesa Sanpaolo SPA ordinary and savings shares have annouced the details of thie rights issue for May 2011:

Intesa Sanpaolo are paying an ordinary dividend and also running a rights issue to raise around EUR5 billion

  • Dividend EUR0.091

Terms of Rights Issue:

For every 7 Intesa Sanpaolo SPA savings shares you are entitled to subscribe to 2 new shares.

  • Issue date – 20 May 2011
  • Effective date – 23 May 2011
  • Expected pay date – 22 June 2011
  • The call price is EUR1.369
  • The price represents a discount of approximately 24% to the Theoretical Ex Right Price
  • It closed trading on Friday 20th May at EUR1.75

Company information

Intesa Sanpaolo is a banking group resulting from the merger between Banca Intesa and Sanpaolo IMI.

Website: www.group.intesasanpaolo.com/

IS Pharma Scheme of Arrangement and Reduction of Capital

IS Pharma and Sinclair Pharma are planning a Scheme of Arrangement and Reduction of Capital which is the method chosen to complete the merger of Sinclair Pharma plc with IS Pharma.

Effective date for the scheme will be 20th May 2011. On Monday 23rd May 2011 the trading of IS Pharma’s Shares on AIM will be cancelled.

Key Dates

  • Effective Date of the Scheme – 20 May 2011
  • Cancellation of IS Pharma Unapproved Options – 6.00 p.m. 20 May 2011
  • Exercise of IS Pharma EMI Options – 6.00 p.m. 20 May 2011
  • Issue of IS Pharma Shares to holders of IS Pharma EMI Options – 6.00 p.m. 20 May 2011
  • Admission of Sinclair Pharma shares – 23 May 2011
  • Cancellation of listing of Scheme Shares – 23 May 2011
  • Latest date for despatch of cheques and certificates and settlement through CREST – Fourteen days from the Effective Date, ie. 03 Jun 2011

Terms of the Scheme of Arrangement

For each IS Pharma Share held you will receive 2.6868 New Sinclair Pharma Shares.

Grahame Cook, Chairman of Sinclair Pharma said:

“The Merger of Sinclair Pharma and IS Pharma will create significant benefits to both companies and their shareholders. There is good potential to increase revenues on a combined basis.”

 

AstraZeneca Takeover Bid For Shire?

The second of the AstraZeneca Takeover stories today is that they are apparently considering a bid for Shire Plc.

Shire is a biopharmaceutical company which specialises in treatments for attention deficit hyperactivity disorder (ADHD), human genetic therapies (HGT) and gastrointestinal (GI) problems.

Shire have been performing well in the current climate. In their annual review they say:

“Shire visualized a tough future several years ago; it planned for it and continues to execute effectively. The results achieved this year once again demonstrate the wisdom of Shire’s business model.”

Shire closed today at 1,921.86p, down 14p.

Astrazeneca were also rumoured to be considering a takeover bid for Cubist Pharmaceuticals.

AstraZeneca Takeover Bid For Cubist Pharmaceuticals?

Before corporate actions are officially announced there are generally rumours circulating on the Internet. When I started out in corporate actions in 1997 such things never existed.

The latest rumour is that the FTSE100 pharmaceutical company AstraZeneca may be considering taking over Cubist Pharmaceuticals, a Massachusetts company.

The deal is related to Cubicin, a medicine which treats the superbug MRSA and some serious skin infections. This antibiotic had sales in the region of $600 last year and some analysts feel that this drug could turn out to be a golden egg.

Cubist won a patent dispute for Cubicin against Israels Teva which strengthens their position.

At the moment Cubist is certainly a very tempting target for a takeover as it has a potentially huge client base with proven sales already.

MedImmune takeover

This would not be the first takeover of a company that specialising in vaccines. In 2007 AstraxZeneca acquired MedImmune at a cost of $15.2 billion to combine with its Cambridge Antibody Technology division.

If AstraZeneca was to successfully acquire Cubist Pharmaceuticals it will control a large share of the global vaccine market.

Today AstraZenaca stock price fell slightly to 3186.86p.

Learn more:

 

MICHELIN 2010 Dividend Reinvestment Plan

Michelin have announced details of their dividend reinvestment plan for 2010. The dividend is set at EUR1.78 with a reinvestment option.

Reinvestment price has been set at EUR56.5, a 10% discount to market value. Ex-date is 20th May 2011.

Current share price (at 17:39 on 05/20/2011) is EUR62.93.

The market default is cash, shareholders have until the 7th June 2011 to elect to reinvest (although asset management deadlines are likely to be sooner).

Pay date for the dividend or reinvested shares is 20th June 2011. News shares rank pari passu.

Find out more about Michelin in the Shareholders Corner of their website: www.michelin.com/shareholder-section

Banco Comercial Portugues Rights Issue 2011

Banco Comercial Português (ISIN PTBCP0AMS055) have announced a subscription offer, approved at the AGM on the 18th April 2011.

The plan is to increase the share capital from EUR5,805,147,000 to EUR6,064,999,986 by issuing 721,813,850 new shares. Sub-rights will be issued and trade at EUR0.36 each.

Shareholders will are entitled to take up 0.1113585667 new shares for each sub-right held.

Final day for subscription is 9th June 2011. Pay date for the call is expected to be 14th June 2011.

 

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, Prudential is borrowing money from its shareholders.

So, why are Prudential wanting to buy an Asian bank during these tough economic times? Is it a safe investment for its shareholders?

Terms of the Pru Rights Issue

Shareholders are entitled to subscribe to 11 shares for every 2 shares held at a call price of 104p per share.

Under the terms of the Rights Issue, Prudential will issue 13,964,557,750 Rights Issue Shares at the Issue Price of 104 pence per Rights Issue Share on the basis of 11 Rights Issue Shares for every 2 Existing Shares held by Qualifying Shareholders on the Record Date of 4 June 2010. The Issue Price for HK Shareholders and Singapore Shareholders is HK$11.78.

The Issue Price of 104 pence per Rights Issue Share represents a 39.3% discount to the theoretical ex-rights price (TERP) based on the Closing Price of a Prudential Share of 542.5 pence on 14 May 2010 and a 80.8% discount to that Closing Price.

The Rights Issue is expected to raise proceeds of approximately £13.8 billion (net of fees and Transaction-related expenses) and is fully underwritten by Credit Suisse, HSBC and J.P. Morgan Cazenove together with a syndicate of other underwriters.

  • Nil paid sedol: B64R3G5 – PRUDENTIAL ORD GBP0.05 (N/P 23/06/10)

Key Dates

  • Ex-date: 8 June 2010 – this is the date that the nil paid rights will be added to your account. The market price of the ordinary shares will fall to compensate these additional shares. They start trading on this date.
  • Pay Date: 23 June 2010 – the closing date has been announced as the 23 June 2010, this is likely to be the paydate, when the call is paid and the nil paid rights converted to ordinary shares.


See the latest Pru prices.

Equation to Sell Rights to Take Up

In response to one of our readers (Joyce) we have added an equation to allow ISA holders (or any shareholder) to quickly calculate how many nil paid rights you need to sell to take up the remaining using the sale proceeds.

No of nil paid rights to sell = Your holding X (Call Price – Total price of nil paid rights incl. fees).

If rights trade at about 20p, and with any brokerage fees the value to sell is £0.20. For a holding of 22,000 nil paids (based on a holding of 2,000 ordinary shares) your calculation is:

22,000 x (1.04 – 0.20) = 18480 nil paid rights. These will give you £3696.00.

Then to take up the remaining 3520 nil paids (i.e. 22,000-18480) your call is £3660.80 which leaves you with £35 left over. If you fiddle with the figures you may find that you can sell 1 or 2 nil paid less and end up with less money left over.