Woolwich members lose out in first share auction
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Former Woolwich members who opted to cash in their windfall shares immediately look certain to raise much less than if they had asked for a share certificate and sold in the market on Monday.
The first auction that will determine how much they receive for their shares produced a disappointing average price on Monday night.
The first auction of unwanted Woolwich shares to pension funds and other institutional investors resulted in a lower-than-expected average price of 315.35p, well below the 373.5p the shares reached in first dealings.
The actual price immediate sellers will receive will be the average of Monday night's price and those achieved in three further sales this week.
The announcement of the price sent Woolwich shares sharply lower, dragging the rest of the previously high-flying banking sector down as well. Having fallen from their early high to Monday's close of 334p, the shares tumbled again yesterday to close at 301p.
Abbey National shares fell from 876.5p to 845.5p, while NatWest tumbled from 881p to 843.5p. Recent flotations fared better with Alliance & Leicester down just 0.5p to 613p and the Halifax 8p lower at 761.5p.
The poor showing by Woolwich yesterday was no surprise to analysts, who have warned that the shares are overpriced even by the standards of the banks sector, which has soared more than 35 per cent this year.
One analyst said: "We don't see any short-term support above about 270p, but having said that, bid rumours will persist."
Woolwich is widely seen as a likely bid target with its heavy exposure to the booming South-east housing market.
At 315p, the average windfall of 657 shares would be worth just over pounds 2,000.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments