If the price falls much further the rights issue will stand at a premium! |
I've bought some at around 451.6p which is a discount on the rump placing price of 460p. I think the technical situation of shorts being closed is now finished and the shares may tread water for a while but they still represent a solid investment around this price. Not quite the recent bottom but not bad. |
Yes 1knocker brokers often refer to it as swallowing your tail especially when directors of the company concerned do it. Sob stories about not having the cash to take up the rights but at least they are swallowing their tail. Haha. I think PNN is alright but I'd like to try and buy more as close to the bottom as possible. |
 Kinwah, correct. I somewhat over-simplified the underwriting position. The effect on the share price of a 'rump' sale and underwriters unloading shares they have been landed with is usually much the same.
I don't understand why it is necessary to get a rights issue underwritten when it is as deeply discounted as this. An unnecessary expense I would have thought, albeit a small one I hope, as the risk to the underwriters is small.
The strategy you describe at the end of your post is colloquially (and picturesquely) known as 'swallowing yiur tail' I believe.
I have no yet finally mae up my mind what to do. On the one hand I am not over-impressed wit the company or the sector (both of which are also political whipping boys). On the other it is unpopular and unfashionable, but provides an essential service requiring capex the governmemt can't afford to fund, so its share price price is relatively low and likely to increase if it makes even a half decent fist of the business. Also if the economy does turn down and /or inflation hots up, the inflation adjusted return on capital it is allowed should continue to sustain a fairly good (and increasing) dividend.Probably I will take up my rights. |
1knocker, let me correct you. If the some of the rights shares are not taken up but the share price remains well above 264p then the underwriters are not involved, it is the company itself which organises a placing of what is called the 'rump'. The rump is placed with friendly institutions at maybe 10p below the market price to ensure keen take up. Should China invade Taiwan or something else to shock world markets and the PNN price drops below 264p then the underwriters will be called to take up the shares not subscribed for. The broker then organises a placing for the underwriters who don't want to hold their shares. This is a placing of the 'stick', i.e. the shares left with the underwriters. My advice for PNN shareholders is that PNN is attractive on a medium term basis but I'd expect the shares to drift now until the rights payment is due as people try and raise money to take up the rights. The National Grid rights issue being a similar heavy rights issue is a good guide. I sold all my PNN in my trading account cum-rights as there were short positions being closed which had pushed the price up. My long term holding I also reduced sharply cum-rights but will take up my rights and look to buy more especially if the price falls ahead of the last day of trading in the new shares. The lowest price PNN reaches is likely to be when the rump is placed. We little shareholders can't access the rump placing but the day it happens or sometimes the day after can be the best time for us to pick up cheap shares as traders take a turn on the rump shares they acquire. If I held a small amount of PNN today and was unsure what to do and didn't want to invest extra cash then I might sell enough old PNN shares now and use the money to take up the rights in full. It's a well-worn strategy but not a bad one nonetheless. Good luck all! |
I would imagine pretty much where they are at now as the 186M rights shares were listed yesterday. |
Some people will not take up all /any of their rights and they will be sold in the market by the underwriters, others will take them up and subsequently sell some or all of them. So there will be plenty of shares sold in market after the issue completes. That will probably cause the price to dip a bit initially, with the price settling down within a couple of weeks.
The best indication of the likely post rights price is probably the current (ex div and ex rights) price of the shares currently in issue.
A rough indication of what you can expect to get if you allow the rights to lapse is a penyn or two below the current price of the shares in issue less the price payable to take up the rights.
All these prices (except the rights exercise price which is fixed) will probably fluctuate quite a bit over the next few days as the market does its arithmetic, especialy as regards the proposed post rights dividend regime. |
Any rough ideas on what Pennon shares might trade at after rights issue on 18 Feb? |
If you want to maintain your percentage holding in the company buy the rights. If you do not want to invest any more let them lapse although because of dilution you will own less of the company. 3rd option sell the rights, your holding will be diluted, you will not increase your holding and you will get money for the rights you sold.
Cheers,
Chozza |
I think it will lapse, and u will receive money instead. It is quite confusing tbh, I'm not sure what to do.. |
RE: Re Rights IssueToday 09:03
Thank you for your thoughts the time deadline means that if I wanted to sell the rights it has to be there by 7 Feb and doesn’t give any time to speak with a broker
I do t have a broker as these shares were a company share save scheme
And I don’t have a broker
I can afford to buy the rights issue and it would not affect my financial position
Any further thoughts this morning |
About £2.03
red |
Any idea what you might get for selling 1 share right |
Buying rights means you commit more of your money so you need to have a positive view on the share price going forward. Selling means you get some cash out and reduce your exposure. |
Re Rights IssueToday 11:58
Hi First time poster here
I was previously employed by SWW and as a result I hold a reasonable amount of Pennon shares
I have read the Provisional Allotment Letter recd today but I have absolutely no idea the advantages or disadvantages of taking up the Rights Issue
Would anyone be so kind as to briefly outline options that I might have going forward
The implications of buying the Rights Issue shares or selling the Rights
There does not seem to be a huge window of time to make my mind up
Any views would be hugely appreciated |
The LSE ticker for the Pennon rights issue is PNNN. The cost of taking up the right for a new share is 264p and the rights are currently trading at 185p. |
Significantly underwater on current price. Looks as if div will be cut. Only bought for div so plan to sell my rights at a price I guess to be about £3.00 though this will change depending on share price movement over the next few days. Water companies no longer a sector I want to be in. |
The Rights Issue Price represents a discount of 47.3% to the Closing Price of 500.81 pence per Existing Ordinary Share on 28 January 2025 (being the last Business Day before the announcement of the terms of the Rights Issue), adjusted for the 2024 Interim Dividend of 14.69 pence per Existing Ordinary Share which will not be payable on the New Ordinary Shares, and a discount of 35.2% to the theoretical ex-rights price of 407.52 pence per Existing Ordinary Share, by reference to the Closing Price on the same date and adjusted on the same basis. Upon completion of the Rights Issue, the New Ordinary Shares will represent approximately 39.4% of the Company’s enlarged issued ordinary share capital (excluding any shares held in treasury) following the Rights Issue.
The Rights Issue Price has been set, following discussions with major Shareholders, at the level which the Board considers necessary to ensure the success of the Rights Issue, taking into account the aggregate proceeds to be raised. The Board believes that the Rights Issue Price, and the discount which it represents, is appropriate. |
Hi all, I am aPNN shareholder. What do I need to do to take up the offer, please?TIA |
Clearly there was a lot of short covering here today. Once the shares have gone ex-rights I suspect they may drift lower again. |
delighted.....what a fab day✅✅ 989;✅✅ |
Quite the rebound here, prob all rights will be taken. |
Just sold all mine at 5.19.
No use waiting for divi since that will be another 14p off tomorrow.
Can't think what will be knocked off when it goes xr on 3rd feb.
And then the slow drag back to the rights price over the coming weeks to 264p (that's what usually happens ime).
Divi will be cut yet again of course. |
Deeply discounted rights issue - |
Yeh this is horrible, gotta be value at this level. |
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