|
|
Open offer |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Open offerAn open offer, also known as an entitlement issue, is an offer made by a quoted company to its shareholders inviting them to buy new shares in the company at a set price, which is normally lower than the current market price.The purpose, as with a rights issue, is to raise new capital for the company. Unlike a rights issue, an open offer cannot be traded or sold on by the shareholder - usually, if you do not take up your entitlement, it lapses. Because of this, when an open offer is announced, you will be allocated sub shares, not nil paid shares.The other way that open offers differ from rights issues is that sometimes you will be allowed to apply for more than your strict entitlement under what is known as 'excess application'. Shareholders tell the company (or its registrar) how many shares they want to buy, including any excess shares, and pay over money to cover their application. The company, before announcing the offer, will have determined how much capital it wants to raise, and the number of shares it needs to sell in order to raise the amount. When it has received all applications, it will either scale them back (if more shares have been applied for than it wants to sell) or it will issue all the shares requested (including any excess applications). If a shareholder's application is scaled back, he or she will be repaid funds for the shares not actually issued.One point worth noting is that shareholders who hold the relevant company shares in a PEP, ISA and SIPP will only be able to take up their entitlement rights if they have enough money in those accounts to pay for the new shares. For the purposes of CGT, the acquisition date for an open offer is the acceptance date that a client took up their entitlement.Similar MatchesSplit offeringSplit offeringA municipal bond issue that is made up of serial bonds and term maturity bonds. Electronic public offeringElectronic public offeringAn initial public offering, or new issue of shares, in which the process of applying for shares is handled electronically (via websites).See 'initial public offering'. Public offeringPublic offeringUsed in the context of general equities. Offering to the investment public, after compliance with registration requirements of the SEC, usually by an investment banker or a syndicate made up of several investment bankers, at a price agreed upon between the issuer and the investment bankers. Antithesis of private placement. See: Primary distribution and secondary distribution. Competitive offeringCompetitive offeringAn offering of securities through competitive bidding. OfferOfferIn the stock market, offer means that a seller is willing to sell a share at a given price.In contract law, an offer is one half of the contract equation, the other being 'acceptance'. Once an offer is accepted, whether verbally or in writing, both buyer and seller are bound by an agreement, provided that 'consideration' has been provided. Contracts for the sale of land have to be in writing. Further SuggestionsRights offeringParis Interbank Offer Rate (PIBOR) Offerings Blank check offering Blitzkrieg tender offer Registered secondary offering Offer curve tender offer offer price initial public offering Godfather offer rights offering Offer Tender offer premium Underwritten offering offer for sale Dual syndicate equity offering Public securities offering Elastic offer curve Asked to bid or offer Self tender offer Fixed price tender offer Offer wanted Rights Offering General cash offer |
|
|
|