Corporate Actions

What is a corporate action?

A corporate action is an activity initiated by a company that affects the nature and/or quantity of stock that you hold. Some actions may require a response from you while others may not. It is important that you understand how a particular corporate action may affect your holding.

There are numerous types of corporate action. These are the main ones:

• Takeovers
• Rights Issues
• Open Offers
• Suspension / liquidation
• Conversion
• Redemption
• Tender Offer
• Warrants

 

See our Glossary for definitions and more details of these corporate actions.

 

Does a corporate action prevent me from placing an order?

When a corporate action that would have a material effect on the price of a share is taking place, we will not allow new Limit, Stop or Trailing Stop orders to be placed for a short period of time. Any orders already placed will be automatically rejected by our trading systems.

 

What happens if I accept a takeover on my existing shareholding and then purchase additional shares?

At the time of purchasing the additional shares you should confirm your intention with regard to the takeover offer for those specific shares.

eg: If you hold 1,000 shares and accept the takeover on the full amount we will accept the offer for the 1,000 shares only, we will only accept the offer on any additional shares purchased if you instruct us to do so by our specified deadline date.

 

Why is Barclays Stockbrokers deadline for reply different to the registrars?

We need to be able to process the instructions for all of our clients so we can send the completed documents to the registrars in time to meet their specific deadline. The cut off date by which our Corporate Actions team must receive clients' instructions is usually 5 business days before the registrars deadline date for the offer.
We cannot guarantee that your instructions will be processed if your instructions are received after our quoted deadline.

 

What happens if Barclays Stockbrokers receive my documents after the deadline has passed?

If your acceptance of a takeover is received after our initial deadline we will take the basic offer on your behalf.

 

If I accept a takeover offer on my shares, can I still sell them in the market?

No, you must not sell your shares if you have already accepted a takeover offer on them. If you do sell, we will need to buy the shares back (and you would be liable to cover any price difference, commission and other fees levied as appropriate).

 

I want to receive a copy of the offer document.

We do not automatically send out Offer Documents. If you write to us, we can arrange for a copy to be sent to you. Or you can contact the Registrars directly. Such instructions must be made on an ad hoc basis.

 

I want to receive voting forms and/or AGM/EGM attendance forms.

We do not automatically send out these forms. We can arrange for forms to be sent to you if you write to or call us. Such instructions must be made each time you want voting forms or to attend an AGM/EGM.

 

I want to sell my shares (from a corporate action), but my account has not yet been updated. What should I do?

Provided Barclays Stockbrokers is in receipt of the stock, there should be no problem in selling. Contact us to find out whether you are able to sell your shares. If the stock has not been received you will not be able to sell.

 

How do I respond?

You can either send a secure e-mail through ‘Contact Us’ , telephone or fax our Corporate Actions team or tear off the slip provided and mail it to us.

 

I live abroad and do not always have much time in which to respond to your letter?

We send all of our corporate action letters by airmail to clients that live abroad. You can contact us at any time by telephoning, or e-mailing us in relation to any corporate actions.

 

When will the cash be credited to my account?

Cash received will be processed within 48 hours of receipt and will therefore be in your account within 6 working days.

 

Should I have money in my account when I give instructions, where payment is required (e.g. Rights Issue. Open Offer)?

Yes, you must have cash in your account when payment is due.

 

How may purchase costs be affected by corporate actions?

Corporate actions affect a client's account in several ways. As a result of a corporate action a client will be given something, either in exchange for an existing holding or in addition to an existing holding. The purchase cost will be affected depending on the type of corporate action.

New Stock Received in Place of Old Holding:
The purchase cost for the old holding is transferred to the new holding.

Bonus Issue of the Same Stock:
The existing purchase cost will remain the same although the quantity of the holding will increase. This will effectively reduce the purchase cost of each individual share.

Rights Issues and Open Offers:
When additional shares are purchased from the company at a reduced price, through a Rights Issue or an Open offer, the purchase price is combined with the existing purchase cost for the new holding quantity.

Bonus Issue of Different Stock:
When a shareholder receives shares in another company as well as keeping the existing shareholding the original purchase cost is split between the two holdings. Barclays Stockbrokers within 5 working days of the split announcement will update the purchase cost of the portfolio holdings.

Demerger:
A demerger will result in a shareholder receiving shares in either one demerged company or several new companies, to replace the existing holding.

 

How are purchase costs affected by my dealing history?

When looking at a purchase cost for a holding on the portfolio it must be remembered that the valuation is based on an average value per share. If the stock has been dealt frequently, then the portfolio screen will not show a breakdown of the purchase cost per deal, but a combined total for the entire holding.

First Purchase:
If 100 shares in BNM are purchased at £100 including commission and stamp duty then the purchase cost for the holding will be £100.

Subsequent Purchases:
If another 100 shares in BNM are purchased the purchase cost for the holding will increase by the additional purchase value. If the additional 100 shares cost £200 including commission and stamp duty the new purchase cost will be £300 for the holding of 200 BNM shares.

Subsequent Sales:
If a sale is completed to sell 50 of the 200 BNM shares then the purchase cost will be reduced by a proportionate amount. 200 BNM shares held with a purchase cost of £300, which is the equivalent of £1.50 each, so selling 50 shares will reduce the purchase cost by £75 irrelevant of the sale proceeds. The new holding of 150 shares will now have a purchase cost of £225.