Key questions
What is happening? |
What is a rights issue?
A Rights Issue enables companies to raise additional capital by offering new shares to existing shareholders. The number of Rights offered is proportionate to the number of shares that each qualifying shareholder holds on or before the record date.
Will the proportion of the company I own stay the same?
You should read the Prospectus carefully and, if you decide to buy all the new shares you are entitled to, then the proportion of the company you own will remain the same as it was before the Rights Issue subject to fractional entitlements.
If you decide to sell some or all of your Rights, or let them lapse, then the proportion of the company you own will be smaller once the capital raising has been completed.
Shareholder options |
How do I go about taking up all of my rights?
If you want to take up all the Rights you are entitled to, you need to make out a cheque payable to HBOS Rights Issue for the full amount indicated on your personalised Form of Election (FOE).
Attach the cheque to your FOE and then return it to us in the envelope provided.
Remember that the cheque should be from your own bank account. Third-party cheques may be returned and your application may not be processed.
Can I sell some rights and use the proceeds to take up my other rights?
Yes. This is known as a Cashless Take Up or tail swallowing. If you hold your shares in the HBOS Shareholder Account, we will be offering this option via our free dealing service (See 'Dealing in the Rights' section below).
What happens if I don’t want to take up my rights?
If you decide not to take up your Rights, you can sell your total Rights allocation. The Rights may have a market value because they give their owner the opportunity to buy shares at 275 pence per share.
The price you will receive for any Rights you sell will depend on market conditions (and, if you sell through the free dealing service, will be an average price. See Page 6 for more details). As a result, the price will change on a regular basis, just like ordinary share prices.
How do I sell ALL of my rights?
You can sell your Rights through the HBOS free dealing service (See Page 6). Simply tick the box next to Option D and sign your personalised FOE and return in the business reply envelope provided to reach us no later than 11am on 11 July.
What if you cannot sell my rights?
If there is not a market for your Rights and consequently we cannot sell them, they will lapse. For further details, see question below:
What happens if I do nothing?
If you decide to take no action your Rights will expire or ‘lapse’ after the offer closes on 18 July.
HBOS will arrange for the shares that your Rights entitled you to buy, together with those of other shareholders, to be offered for sale in the market.
Any premium obtained above the issue price, less expenses, will then be paid to you provided the amount is more than £5. Amounts of less than £5 will be donated to charity. The total number of shares you own will stay the same. However, the proportion of the company you own will reduce as more shares will be in issue.
Are there any tax implications I need to consider?
Any personal issues regarding possible tax implications should be taken forward with a duly authorised independent financial/taxation advisor. HBOS cannot provide any tax or other investment advice in relation to the Rights Issue.
Where can I find further information?
More information can be found here on www.hbosplc.com/rightsissue. Alternatively, you can call the HBOS shareholder helpline on 0870 702 0102. Calls from BT landlines will cost a maximum of 8p per minute and a 6p set up fee for 0870 numbers. The price of calls from other telephone companies will vary. The call price is correct at June 2008.
Dealing in the rights |
How does the HBOS free dealing service work?
HBOS is offering a free dealing service for HBOS Shareholder Account customers wishing to sell some or all of their Nil Paid Rights. Halifax Share Dealing Ltd (HSDL), a subsidiary of HBOS, will add your order to those of other users of the service over a period of days and then sell the Rights in bulk, in batches using reasonable endeavours to achieve the best price available at the time of dealing of each trade. It may take a number of days to sell each bulked order and so the price you will be paid will be the average achieved over the relevant sale period. This means you may receive a different price depending on which batch your Rights are sold in, and may result in a less favourable price than if your order had been dealt individually. A confirmation note and your payment, if any, will be sent to you a few days after the trade has been completed and details of the price achieved will be available at www.hbosplc.com/rightsissue or by telephoning our
freephone share price number 0800 923 1502 immediately following the completion of each bulk sale. Proceeds of £5 or less will not be paid to you. These monies will be donated to the HBOS 2008 Charities of the Year – CLIC Sargent, Age Concern and Diabetes UK.
How does the Cashless Take Up (‘Tail Swallow’) service work?
HBOS is offering a free Cashless Take Up (Option C) for HBOS Shareholder Account customers.
You can sell some Rights and take up your remaining Rights using the proceeds from the sale. HSDL will work out how many shares to sell for you and add your order to those of other users of the service over the period up to the deadline for Cashless Take Up (11am 11 July) and sell the Rights in bulk, in batches, in the same way as described above for the free dealing service. A confirmation note will be sent to you a few days after the trade has been completed and details of the price achieved will be available at www.hbosplc.com/rightsissue or by telephoning our freephone share price number 0800 923 1502 immediately following the completion of the bulk sale. The proceeds realised from the sale will then be used to take up the Rights on the balance and a statement showing your new shareholding will be sent to you at the end of July. Any surplus proceeds will be donated to the HBOS 2008 Charities of the Year – CLIC Sargent, Age Concern and Diabetes UK.
Will I definitely receive any shares if I choose Cashless Take Up?
If the price achieved for your Rights does not raise £2.75, you will not be able to take up any new shares. Any surplus proceeds will be donated to the HBOS 2008 Charities of the Year – CLIC Sargent, Age Concern and Diabetes UK.
How much time have I got to decide?
Shareholders should carefully review the Prospectus and other information we have sent hem as soon as possible. If you want to participate in the Rights Issue, we would strongly recommend that you complete and return the enclosed FOE or submit your election online in good time to be received before the deadline stated under each option. No applications will be accepted after the deadline.
How will I know the price of the rights?
The price of the Rights (their legal term is ‘Nil Paid Rights’) will fluctuate like all traded securities.
The price of the Rights will be quoted in some daily newspapers and on a number of online sites. In addition, the price will be updated every 15 minutes at www.hbosplc.com/rightsissue. It is very important to note that the price that you see listed in a newspaper, or at www.hbosplc.com/rightsissue or on another website, is very unlikely to be the price that you will receive if you decide to sell your Rights.
Are the various documents and forms available in braille, large print or audio?
Yes. If you require this documentation in an alternative format, i.e. Braille, Large Print or Audio, please contact us on 0845 602 6832 or email $HBOSDiversity-SharedMailbox@no.halifax.co.uk.
Calls from BT landlines will cost a maximum of 4p per minute and a 6p set up fee for 0845 numbers. The price of calls from other telephone companies will vary. The call price is correct at June 2008.
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