{"id":57156,"date":"2023-11-27T18:33:47","date_gmt":"2023-11-27T18:33:47","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem"},"modified":"2023-11-27T18:49:51","modified_gmt":"2023-11-27T18:49:51","slug":"arc-investments-rights-offer-problem","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem","title":{"rendered":"ARC Investments rights offer problem"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>African Rainbow Capital Investments (ARC Investments) plans to raise R750 million through a rights offer, but there is a problem.<\/p>\n

ARC Investments\u2019 share price dropped to well below the rights offer price, which means it makes no sense to buy shares at that price.<\/p>\n

The holding company announced it will offer 150 million ordinary shares for R5.00 per rights offer share.<\/p>\n

There will be a ratio of 11.06579 rights offer shares for every 100 existing ordinary shares held on the record date for the rights offer \u2013 Friday, 1 December 2023.<\/p>\n

\u201cThe rights offer price represents a 7.32022% discount to the 30-day volume weighted average price of the ordinary shares as of Friday, 10 November 2023,\u201d it said.<\/p>\n

However, the share price declined to R4.72 by Friday, 24 November. This means the rights offer shares are no longer offered at a discount.<\/p>\n

Shareholders participating in the rights offer will now pay a significant premium for these ordinary shares.<\/p>\n

It follows that it makes no sense for investors to exercise their rights and participate in the rights offer.<\/p>\n

ARC Investments is in a rare situation where shareholders will be better off not exercising their rights offer.<\/p>\n

By not participating in the rights offer, shareholders will make an immediate risk-free gain on their investment.<\/p>\n

At the current share price, the ex-rights offer price of ARC Investments that will leave investors in a neutral position is R4.75.<\/p>\n

Therefore, at the current share price of R4.72, investors that do not exercise their rights offers would make an immediate gain of 0.59%<\/p>\n

Investors exercising their rights would have to contribute additional capital and, at the ex-rights price of R4.75, not make a gain or a loss.<\/p>\n

Daily Investor asked ARC Investments what incentive shareholders have to participate in the rights offer, but it preferred not to answer the question. The table below illustrates why it is better for ARC Investments shareholders to sit out the rights offer at the current share price.
\n<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. African Rainbow Capital Investments (ARC Investments) plans to raise R750 million through a rights offer, but there is a problem. ARC Investments\u2019 share price dropped to well below the rights offer price, which means it makes no sense to buy shares at that price. The holding company announced it will offer 150 […]<\/p>\n","protected":false},"author":84,"featured_media":57155,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-57156","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nARC Investments rights offer problem - South Africa<\/title>\n<meta name=\"description\" content=\"African Rainbow Capital Investments (ARC Investments) plans to raise R750 million through a rights offer, but there is a ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ARC Investments rights offer problem\" \/>\n<meta property=\"og:description\" content=\"African Rainbow Capital Investments (ARC Investments) plans to raise R750 million through a rights offer, but there is a ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-27T18:33:47+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-27T18:49:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/11\/sm_1701098231.319322.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"576\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"ARC Investments rights offer problem\",\"datePublished\":\"2023-11-27T18:33:47+00:00\",\"dateModified\":\"2023-11-27T18:49:51+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem\"},\"wordCount\":333,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/11\/sm_1701098231.319322.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/arc-investments-rights-offer-problem\",\"name\":\"ARC Investments rights offer problem - 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