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2 for 5 ie every five you own/buy get next two at3.35 (currently £5.71), where is the catch?
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NG are raising a lot of money £3.2b, and paying £100m to the underwriters to guarantee the offering.
The share reaction this morning (down over 4%) looked like a negative, but when you factor in that you can't buy the shares today with the rights attached, the calcualation could be interpreted as a rise of 40p or so providing you take up your rights (or they command the equivalent tradeable value) and the share price doesn't collapse.
More of interest is what they plan on doing with the dosh, they seem to pretty opaque on the mattter. One suspects that a huge dollup of the cash is to be used to hook up the offshore windfarms to the grid. The issue is, will NG be able to recover their costs (or more accurately their shareholders investment)? With wind farms barely generating 10% of their capacity for much of the year it may be that the numbers just won't stack up, unless, they think they can pick the pockets of the taxpayer, or ratchet up the cost to the distributors.
At 08.00 the rights issue looked ok on balance, by 13.00 with the market turning 180 degrees and falling like a stone it doesn't look so clever.
I will be interested in the views of the business hacks tomorrow.
The share reaction this morning (down over 4%) looked like a negative, but when you factor in that you can't buy the shares today with the rights attached, the calcualation could be interpreted as a rise of 40p or so providing you take up your rights (or they command the equivalent tradeable value) and the share price doesn't collapse.
More of interest is what they plan on doing with the dosh, they seem to pretty opaque on the mattter. One suspects that a huge dollup of the cash is to be used to hook up the offshore windfarms to the grid. The issue is, will NG be able to recover their costs (or more accurately their shareholders investment)? With wind farms barely generating 10% of their capacity for much of the year it may be that the numbers just won't stack up, unless, they think they can pick the pockets of the taxpayer, or ratchet up the cost to the distributors.
At 08.00 the rights issue looked ok on balance, by 13.00 with the market turning 180 degrees and falling like a stone it doesn't look so clever.
I will be interested in the views of the business hacks tomorrow.
but when you factor in that you can't buy the shares today with the rights attached
Whoops, that is incorrect the shares go ex rights on the 26th May. The interpretation I made that the shares may have actually gone up by factoring in the value of the rights is, I believe, still valid.
Whoops, that is incorrect the shares go ex rights on the 26th May. The interpretation I made that the shares may have actually gone up by factoring in the value of the rights is, I believe, still valid.
Also be aware that the dividend will be rebased, simply because there will be more shares in circulation.
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