Open Offer

An open offer, also known as an entitlement issue, is an offer made by a quoted company to its shareholders inviting them to buy new shares in the company at a set price, which is normally lower than the current market price. The purpose, as with a rights issue, is to raise new capital for the company. Unlike a rights issue, an open offer cannot be traded or sold on by the shareholder Ð usually, if you do not take up your entitlement, it lapses. Because of this, when an open offer is announced, you will be allocated sub shares, not nil paid shares.