QBE: Shareholder purchase plan update

High demand means a significant scale-back

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

QBE Insurance Limited (ASX: QBE) have announced details of how many shares existing shareholders will receive under the $150m Share Purchase Plan (SPP). QBE announced on 28th March 2012, that it had received applications from 75,000 shareholders for much more than the $150m.

If you thought that meant the offer was going to be scaled back a lot – you'd be right. I've reproduced the table below from QBE's announcement showing how many shares each shareholder will receive, based on their holdings as at 27th February 2012.

Number of shares on record date

"Potential allotment"

20,000 or more

1,402 (maximum allocation)

16,813

1,402 (maximum allocation)

10,000

834

5,000

417

2,000

167

1,000

17

50

4

20

2

10

1

The scaleback will be undertaken on the basis that each eligible applicant will be limited to a potential allotment of 8.34% of the value of their shareholding on the record date. If you held less than 10 shares, you'll receive none under the SPP.

Shares will be allotted to shareholders on Wednesday, 11th April 2012, and refunds will start flowing back to investors the same day. Shareholders wishing to sell their shares can do so from Thursday 12th April 2012.

Investors will be sent an allotment notice and refund advice on Friday 13th April 2012.

The Foolish bottom line

Having applied for the maximum of $15,000, I was looking forward to receiving a very nice short term capital gain, but alas it's not meant to be. At least I'm quite happy that not all of QBE's 160,000 shareholders applied for shares.

Given the 32% increase in QBE's share price over the SPP issue price of $10.70, it's likely that some shareholders may elect to sell their shares on Thursday, 12th April. I'll be hoping for some share price weakness and to pick up some more shares then.

If you are looking for ASX investing ideas, look no further than "The Motley Fool's Top Stock for 2012." In this free report, Investment Analyst Dean Morel names his top pick for 2012…and beyond. Click here now to find out the name of this small but growing telecommunications company. But hurry – the report is free for only a limited period of time.

More reading

Motley Fool contributor Mike King owns shares in QBE. The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Click here to be enlightened by The Motley Fool's disclosure policy.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »