£600m rights issues called “kite flying” but scares investors
RSA shares fell 6.2p to 124.4p on disbelief in the rumour of a £600m rights issue, with stockbrokers saying the firm had a strong balance sheet and no acquisitions planned the Times reports.
Eamonn Flanagan, of Shore Capital, said: “We think it’s kite-flying. RSA doesn’t need the money and it doesn’t feel as if the current management team is acquisitions-led, bearing in mind that it was acquisitions that sowed the seeds of demise at the insurer last time around.”
He said that RSA was “anything but a company in need of a £1 billion rights issue”.
Just raised dividend
The Guardian said traders said they would be surprised at such a move unless a takeover was planned, since RSA had just raised its dividend and bought back part of its debt.
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