RSA rights issue

RSA this morning (25.03.14) announced the details of its much heralded rights issue; so far the price has reacted well, being up 1.5%. The shares will be marked ex-rights tomorrow morning, so if you are not a holder and want to participate in the rights issue, you need to buy today or else buy the nil paid rights up to the 9th April. We are holders of the shares in the equity model portfolio and expect to take up our rights.

The details of the rights are as follows:

  1. The company is raising £748m net of expenses by the issue at 56p each of 3 shares for every 8 held. The share capital will increase by 1381m shares.
  2. Based on the current price of 94.7p, the shares should trade ex rights tomorrow at 84.1p.
  3. Ex rights date and dealings in new ordinary shares – 26.03.14.
  4. Latest time for acceptance – 09.04.14.
  5. The company has said any 2014 interim dividend is likely to be modest but has a medium term goal of paying out 40 – 50% of earnings.

This should give the company adequate capital going forward, taking into account its recent losses and new regulatory requirements.

Email us if you have any questions.

This research has been produced by David Liddell, chief executive and major shareholder in IpsoFacto Limited which has approved this research. David may have equity holdings in any or all of the stocks listed.

The information contained in this research has been obtained from sources that IpsoFacto Limited believes to be reliable and accurate. However, it has not been independently verified and no representation or warranty, express or implied, is made as to the accuracy or completeness of any information obtained from third parties.