Galliford Try (Rights Offer)

[Darka]

Some information on the Galliford Try (GFRD) rights offer - haven't read it yet so undecided myself.

http://www.londonstockexchange.com/exch ... 32151.html

regards,
Darka

[monabri]

Well, it's been over a week since the RNS and there has been no information on which to make a decision.

[vrdiver]

I saw that, but until they publish the terms of the rights issue, it's hard to say whether it will be worth subscribing or letting it lapse.

If, as they imply (in Directorspeak) they have had a great year apart from the Carillion debacle, then I wouldn't expect to see a large discount for the new issue - just enough to attract attention. On the other hand, if all is not well under the covers, then a large discount may be needed to get institutional investors to partake.

I haven't defined "large" on purpose, but above 10-20% I might become suspicious that something, somewhere, is not what it seems!

VRD

[Gengulphus]

Well, it's been over a week since the RNS and there has been no information on which to make a decision.

Doesn't matter. The regulators simply won't allow them to ask shareholders to make a decision without providing the information about how much they're being asked to pay and what they get for it - and a great deal more information besides. Far more information than any ordinary investor really wants, in fact, as anyone who has ever tried to read the entirety of the shareholder circular that details a rights offer will know - it really goes into the offer in excruciating detail, with lots of details relevant only to special groups of shareholders (for instance, nominee companies), conditions about possibilities that can happen in principle but are extremely unlikely to in practice, etc. The real challenges with reading such shareholder circulars are to know which parts of them you can safely skip and where to find the bits of information you actually want to know!

Anyway, all Galliford Try have done so far is announce that they're going to make a rights offer. They need to actually make one, with an accompanying shareholder circular, before the clock even starts ticking on shareholders making decisions about it.

Gengulphus

[NeilW]

The general approach with rights issues in HYP is to let them lapse and take the money.

[vrdiver]

The general approach with rights issues in HYP is to let them lapse and take the money.

Unless, of course, the company is a top-up candidate, in which case you might want to add fresh money, or unless you want to keep your holding as undiluted as possible without adding fresh money, in which case you might go for the tail-swallowing option, or unless you see that specific company as no longer a great HYP share, so are happy to have a free transfer-out of some of the capital in readiness to deploy elsewhere.

Short form: the general approach is to look at the rights issue and make a decision on what you want to do, based on your HYP criteria!

[Gengulphus]

The general approach with rights issues in HYP is to let them lapse and take the money.

Unless, of course, the company is a top-up candidate, in which case you might want to add fresh money, or unless you want to keep your holding as undiluted as possible without adding fresh money, in which case you might go for the tail-swallowing option, or unless you see that specific company as no longer a great HYP share, so are happy to have a free transfer-out of some of the capital in readiness to deploy elsewhere.

Short form: the general approach is to look at the rights issue and make a decision on what you want to do, based on your HYP criteria!

Indeed. And as evidence that at least one fairly prominent ;-) HYPer has done just that, see:

* https://web.archive.org/web/20170213190 ... sort=whole, in which he sold the rights and reinvested the proceeds in a top up of the original holding.

* https://web.archive.org/web/20170213190 ... le#8156489, in which he let the rights lapse and reinvested the lapsed-rights payment in a top up of the original holding.

* https://web.archive.org/web/20161107041 ... e#11790446, in which he states that he let some rights lapse and reinvested the lapsed-rights payment as a top up of a different holding, the original holding having ceased to pay dividends.

* https://web.archive.org/web/20170213113 ... sort=whole, in which he sold the rights and took the proceeds as income.

Gengulphus