A small bit of confusion . . . make sure you understand what is...

A small bit of confusion . . . make sure you understand what is going on!

You have the opportunity to buy 12 shares for every 7 you own, if you owned or bought shares last week.

Today ERA is trading Ex-Entitlement. If you buy today - you will NOT get an opportunity to buy any shares (12 for 7) at $1.53 via the offer on the new shares.

There are really two parts to the offer - the institutional part, and the retail (non institutional) part.

Today the result of the institutional bookbuild (IBB) was published. A boodbuild is pretty much an auction. As the IBB was priced at $2 - institutional investors who did not take up their entitlement to shares at $1.53 will get $0.47 for each share not taken up.

If you want to take up your "retail offer" shares at $1.53 - you need to get your payment in (booklet with details coming) by the close of the offer which is the 9/11/11. If you do not take up your shares at $1.53 - there will be a retail bookbuild (RBB) (auction) on about the 14/11/11 of all the "retail" shares not taken up. You will get whatever the resulting price of the auction is, minus the $1.53.

So if the auction result is $1.53 or less - you get nothing. If it is $2 (same as the IBB) - you will get 47cents for every share you did not take up. So for every 7 shares you have, you will get 12 x 47c = $5.64 in the unlikely event the bookbuild is $2 again. Obviously the price will most likely be different.

Retail investors will not get any opportunity to take part in the bookbuild, or to subscribe for extra shares at $1.53 via the offer. (Different story if the share-price falls to this price and you can buy on market.

bpay
I haven't seen the rulebook yet - but usually you can take up your offer via bpay - and can pay in the afternoon of the close of the offer (9/11/11 I believe). Just be aware that your bank may have a limit on the size of your daily bpay payments, and this could stuff you up. From memory - one of my Westpac accounts allows me to bpay $25k, and another one only allows $10k in one day. I have an ANZ account that allows bpay of $50k for some reason.

Disclaimer : Another thing - I believe they can change the rules if they want to - and do you own research to double check what I have told you if it is important that you get this right - don't rely on anybody else - the detailed rules (offer booklet) comes out within the next few days.