Shares digital

by Simon Keane

The goal posts are moving for Cattles watchers, so a helpful update from Credit Suisse’s Robert Self ahead of the £200 million rights issue is well timed. Self has re-worked his numbers based on the increase in share base that will accompany the 9-for-20 rights issue. He has come out with a new revised share price target of 290p – down 32% from his previous 425p.

As we all know, a rights issue puts downward pressure on the share price. Of course, anyone who participates in the rights issue, will have protected themselves from its dilutionary impact by subscribing to the new shares. But Self’s new calculations do help investors get a feel for what they should be aiming for.

The rights issue needs to be approved at an EGM scheduled for 9 May. But Self is ahead of the game, having already adjusted earnings forecasts for 2008 and 2009 by 24% and 32% respectively on the assumption the share issue will get the green light.