Northern Rock Shares

[fcg]

Hi all,

I spend a bit of time buying, selling and investing in shares. I bought a small number of Northern Rock ones a week ago when they were at 1.80 ish (might as well see what happens!)

One thing ive never even thought about is what happens to shares when someone else comes in and buys the whole company?

Do you keep hold of the shares or are they just lost?

Thanks

Andy

 

[sabian1982]

I was under the impression you then own shares in whatever company has taken over (if that happens)... you wouldn't shouldn't lose then... but i may be wrong... just a guess.

 

[multilingual]

Well this is why people buy shares when they hear rumours about a takeover.

Put simply, any company buying Northern Rock would issue a price per share, which would normally be over and above the current share price so that the shareholders agree to sell.

If the majority agree to sell then you have to relinquish your shares, unless it is some merger, but that makes the whole thing a bit complicated.

The reason that no-one is really buying NR stock is because any potential buyer might make a low bid based on its current performance.

I would think it is a risky punt in my opinion.

JB

 

[Jeewhizz]

You continue to own them in most cases.

AFAIK...

When a buyer wants to buy, they obv will need a majority of shares. What generally happens, is that they will offer to buy your shares at a slightly higher rate than the LSE rate.

However, there are cases where a majority shareholder (of 80%+ iirc) can *force* a buyout of all remaining shares, so that they own the full 100%

I think that this is the case. It obv get's more complicated with the different types of shares!

 

[Cornish Steve]

If you own shares in a company, you are the owner of that company! If there's a takeover, the company board acts on your behalf to sell your shares to the buyer. Usually it's a share swap of some sort. For example, if Bank X buys the company you own, you may get 2 shares in the buyer's company for every one share you own.

You have nothing to worry about. In fact, takeovers are usually good for shareholders. Just remember the important principle: You're not just an investor in the company; you're an owner. The principal worry as a shareholder is that the company goes bust, and then you lose everything.

 

[dagr]

I think it depends on the company's statutes. I'm pretty sure for most companies on major Stock exchanges, there will be provision for takeovers. Typically, this means that a new shareholder cannot hold over 25% of all shares without declaring intentions and giving guarantees. Similarly, if a takeover is launched, then it (almost always) must be total. This means you must sell your shares, at a fixed and usually very attractive price.

 

[mconridge]

Typically, this means that a new shareholder cannot hold over 25% of all shares without declaring intentions and giving guarantees.

29.9% or higher.

Check out this thread about NRK:

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=43092

I would recommend selling up now to be honest. I can't see this share ever getting back to the 180p mark I'm afraid. If a buyout occurs, which is the most likely option, it will be around 140p max IMO

 

[fcg]

29.9% or higher.

Check out this thread about NRK:

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=43092

I would recommend selling up now to be honest. I can't see this share ever getting back to the 180p mark I'm afraid. If a buyout occurs, which is the most likely option, it will be around 140p max IMO

I only bought 100 quids worth just as a little game if anything so im not going to sell them......was just wondering generally what happens in a buy out.

 

[mconridge]

I only bought 100 quids worth just as a little game if anything so im not going to sell them......was just wondering generally what happens in a buy out.

That's ok then. There are people that have lost tens of thousands trying to catch this 'falling knife'

 

[ellisn]

I thought I was being smart buying 300 shares for £957.15 a few weeks back, so far I have lost over £500!

Almost as good as my investment in Railtrack a month before they vanished... when will I learn

But you never know, give it a couple of years and I might get my money back.

Neil

 

[ellisn]

Don't know if this is good or bad news.

 

[mconridge]

Don't know if this is good or bad news.

This will happen alot over the next couple of months. They are up 10% today. They will bounce more then Roger Rabbit in the short term .

Could be money to be made by day trading. Very risky though.

 

[ellisn]

Fingers crossed

Neil

 

[coultog]

I still reckon NR is worth a punt. I've decided to put a couple of hundred in there and see what happens. What's the worst that can happen?

 

[Jon123]

I only bought 100 quids worth just as a little game if anything so im not going to sell them......was just wondering generally what happens in a buy out.

I bet you wish you bought more than 100quid now!!

http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/23193/default.stm

You have made a very healthy return in a very short space of time!!

Cheers
Jon

 

[coultog]

That's a 100p rise in a couple of days

I've not bought mine yet

 

[sabian1982]

Almost hit 300 at 11am... its peaked and going back down again now though...

 

[safesys]

Bought 100k two days ago

Shame it wasn't in real money! Doh!

 

[mconridge]

65p now

This was always going to be the outcome for NRK. Hope everyone got out!