Bradford and Bingley Rights Issue

[redjas71]

Hi all

My wife has received her pack through the post with the rights offer. Being a novice at this sort of thing, I hoped I could get some advice to aid my understanding ?

The current share price (52p today) will presumably drop with the issue of new shares, as her % in the company will reduce ? Is that right ?

Also, the rights issue price is 55p, above the market value, so is this a definite sign to steer clear, as presumably she could just buy the extra shares freely on the market cheaper if she wished to ?

Any advice gratefully received ?

Thanks a lot !

 

[Trader333]

Also, the rights issue price is 55p, above the market value, so is this a definite sign to steer clear

Yes it is pointless paying more than the market value in my view.


Paul