Share advise , thanx?

Question

the company acambis has some good news today at 5.30pm.

they say the shareholders will get a 190p a share. they closed today at 116p a share.

does this mean that on monday morning 8am when the market opens will it open at around 116p a share.

if it does and i invest £500 at 116p a share and it rises to the 190p a share it will give me a new amount of £818 makeing around about £300 after commison etc.

Answer 1

yes

Answer 2

It should open at about 186-92 on Monday. Unless people think it is worth more, although it is a friendly offer and presumably the directors will recommend it. You could buy at 190 something fairly confident (though not guaranteed)that you are protected at 190p.

The offer may not go through. They may have to increase their offer. Another higher bidder may emerge.

Answer 3

You're suggesting that shareholders will get £1.90 per share. You haven't got any shares, it's too late to buy them as the announcement has been made.

If you were an existing shareholder, you'd receive a dividend of £1.90 per share, and still have your shares worth £1.16 each.

The money is usually part of an incentive deal for existing shareholders.

However, you have got the wrong end of the stick: Acambis has been bought outright as a company for £1.90 per share, this is not a dividend, it's merely a result of dividing the purchase price of £276m by the number of shares floated by the company.

There is no direct relation between this & the actual share price, but it should have a positive effect.