United Utilities A Share

They went "Ex-Rights", and the Nil paid rights (UU.N) are quoted separately. The A shares are now worth one half of an Ordinary Share.

I'm still slightly puzzled. Back in March my A shares were worth circa £4.68 each. They're now apparently £3.23. My Ordinary Shares were worth circa £6.08 and now worth £6.48

Why have the A shares dropped when the performance of the main share suggests the company is performing better than it was?

Is this reduction just some sort of temporary technical movement, and other things being equal when the rights issue is complete they will move back nearer to what they were?

I suppose what I'm saying is that I don't fully understand the workings of the effect of the rights issue on the number of shares and the value of each share.

Rgds

__ Richard Buttrey Grappenhall, Cheshire, UK __________________________

You now have the nil-paid rights, UU.N, which have a value, approximately the difference between the price of the A-share, UU.A, ,and the 165p required to convert the nil-paid into fully-paid A-shares, UU.F.

That is 323-1658p. Before they went Ex-Rights, your A-shares would have been 323+158H1p (ignoring the dividend).

Thanks Terry,

I think I'm nearly there, if you'll bear with me one more time.

If I pay the rights issue of 165/share what will my share be worth? Are you saying that when the whole exercise is finished my original share will be valued at 481 plus the additional 165 = 646?

Rgds __ Richard Buttrey Grappenhall, Cheshire, UK __________________________

In message of Fri, 17 Jun 2005, Richard Buttrey writes

When you've paid the rights of 165p you will have twice as many 'A' shares than had previously. They will then be converted into Ord shares at the rate of 2:1.

Your original value you mention above is still the same (subject to market fluctuations). EG one 'A' share was (say) £4.80 and is now (say) £3.22, but you also have one 'A' share nil paid at value (say) £1.58. Total value £4.80.

David

Ah, excellent; understood.

Many thanks David.

Rgds

__ Richard Buttrey Grappenhall, Cheshire, UK __________________________

Thanks for the response, David. I been off-line for a day or so.