Rights wronged

20 November 2008 By Jeffrey Goldfarb Follow @jgfarb

The notion that all shareholders can participate in discounted rights issues is central to European capitalism. Or was. Santander is partly ignoring it in the UK and Barclays snubbed current shareholders. The need for speed is a poor excuse for violating a basic principle.

This content is for Subscribers only

Context News

Banco Santander has notified 1.8m retail shareholders in the UK that they will not be able to take part in its deeply discounted rights issue. Instead, their rights will be sold for cash.

The rights are quoted and their value should equal the difference between the new share issue price of E4.5 and the market price of the shares. Four rights give an existing shareholder the right to buy one Santander share at E4.5. The UK retail shareholders also will be given another opportunity to buy shares at the market rate in December.

Santander said the acceptance period for rights issues in Spain is 15 days, which it said was too short a time to logistically include the UK shareholders.

Email a friend

Please complete the form below.

Required fields *