re Stobart share offer

[08012006]

"Stobart announces that as at 11.00 a.m. on 16 May 2011 it had received valid acceptances from Qualifying Stobart Shareholders in respect of 19,728,984 Open Offer Shares, representing approximately 25.5 per cent. of the Open Offer Shares available pursuant to the Open Offer." I am wondering why did anyone buy these at £1.55, when the open market price was around £1.30?

[dzug2]

Maybe they had a contractual obligation to do so - a bank or director promoting the offer could be in this situation.

[twix123]

Financial institutions had already agreed to buy all the new shares being offered at the issue price of £1.55 prior to the offer to existing shareholders, at the same price. When the price was struck, the original shares were trading at £1.46

The cash received from the offer is being used to buy the 50% of the company 'Biomass' not already owned by the Stobart Group, and to buy another business, therefore adding value, and diversification, to the company. By buying shares under the offer the existing shareholders ensure that their shareholding is not diluted.

It is unfortunate for those that took up the offer that the Stock Market has fallen since the offer price was struck.

[08012006]

Thank you both for your comments.