Aveva released a RNS today detailing their proposed takeover of another company, ‘OSIsoft’. Part of the capital raise is by way of issuing an additional 125M new shares (to existing share holders) at a heavily discounted price (around 30%) to the recent share price. The ‘sell’ is you can buy 7 discounted new shares for every 9 you currently hold.
If you choose not to take up the offer, then your share holding will drop considerably in value (note the recent drops over the last 48hrs) once these new shares hit the market.
Rolls Royce did a very similar thing recently, although they weren’t looking to make acquisitions but to shore-up their bank.
My question is, how will Freetrade manage this? As an existing holder of Aveva will I get the option to buy at this discounted price? Also, if your holding isn’t divisible by 9 or is less than 9 shares, will the issue be pro-rata? I think the ratio works out to be 1: 0.77
First time I’ve been in this position with a holding so I’d appreciate any advice. Thanks