Renounceable Rights Issues
RENOUNCEABLE RIGHTS ISSUES
STUPID QUESTION: What is the difference between non-renounceable and renounceable share offers?
REPLY: When a company offers shares to existing shareholders under an entitlement or rights structure (offering 3 for 5 at 120c for example) the offer can be renounceable or non-renounceable. In both cases the shareholder has a “Right” to buy shares which is worth something. If the market price is 150c and the entitlement is to buy shares at 120c then the “Right” is worth 30c.
A renounceable offer means shareholders the “Right” (to buy more shares usually at a discount to the market price)...Continue Reading