re shares - can anyone explain please

[pussinwellyboots]

Hi there,

I've had some shares in Barclays for a number of years (received Woolwich shares which transferred to Barclays) and have just received the following letter:

Dear Sharestore member

In line with the terms and conditions of the Rights Issue, we have arranged for the Rights provisionally allotted to you but not taken up to be sold. Please find attached a cheque for the premium over the rights issue price of 185p per new ordinary share (less expenses) Please note that your original shareholding has not been sold, only your rights.

Can anyone please explain this to me - have I omitted to do something which has resulted in me loosing my shares?. What does loosing my rights mean and do I still own my shares? Is there anything I can do about this? It feels like a very bad deal to me, but I am not sure.

Thank you for any help - i'm going to be away from computer until this evening but I do value any replies.

No idea but am intrigued as dh has Barclays shares

no this is all fine :)

Barclays have had a rights issue. This gave you the right to buy some more shares at less than the usual share price. This 'right' was worth something - very simply if you could buy 1 share for £4 and the current price is £6, the right is worth £2. (nb this is over simplified and these are not the relevant prices for the Barclays rights issue, just and example.)

Because you didn't choose to use your right to buy the extra shares, it was assumed that you wanted your right to be sold instead, so you have been given the £2.

That is a very simple version, but you haven't lost anything at all.

You still own all your original Barclays shares and you should be able to see them in your broker account on the portfolio page. What has been sold was the extra 'rights' that you were given.

The value of your Barclays shares has fallen since before the rights issue was announced - this is because they had to make the rights issue to raise money as the governement told them they had to (again this is very simplified.) But the fall in value is not caused by something you have or haven't done - it was caused by the market deciding barclays wasn't worth as much as they had thought before.

Thank you debtcamel - that's really helpful -it makes sense now and i'm relieved that my shares haven't been sold.