Can somebody help I had 1435 shares in united utilities and have recently recieved 2 cheques 1 which seems to be a dividend payment and another 1 is something to do with a money release option and I have also recieved a new certificate stating that I still have 1435 shares but it seems to say that they are now worth 5p but the cheque for the money release was nowhere near the £7 a share value. Anybody tell me in laymans terms whats happened how much I should of received and what shares and value do I now hold

Thanks

First of all, if they are 5p shares, that means next to nothing. The face value of the shares may be 5p but they will be changing hands for much more in the stock market. You should have got 17 United Utilities Group shares for every 22 United Utilities Shares that you held so, in your case, that's (1435/22) x 17 = 65 and a bit times 17 = 1108 and a bit. You should now have 1108 shares in United Utilities Group and a cheque for a small amount (the bit of a share left over in the calculation).

You also should have got one "B" share for each United Utilities share - that's 1435 "B" shares. There were various options for you to choose for the "B" shares most of which meant that you would get £1.70 for each one (£2439.50) at some stage. If companies didn't do things like this from time to time, there would be a lot of accountants with nothing to do all day.

http://www.unitedutilities.com/?OBH=6104

Thanks for your reply yes the cheques Ireceved were for the amount you said but this doesnt add up. In effect I had 1435 * £7 which is over £10000 but have acheque for £2500 and 1018 shares at 5p which is £50. Can you suggest what the remaining 1018 shares are likely to be exchanged for as it seems like tis is a big company scam and I have lost out. Also is it worth keeping them or trading them ?? thanks for your help

5p is just the nominal value of each share. It doesn't usually mean much more than the value when the shares were first traded - it's a bit like saying that a Penny Black has a value of a penny. When the market closed today, each share was changing hands at £7.10 (the share price is given in the top right corner of most of their web pages). The small difference between 1435 x the old share price and 1018 x the current share price plus the value of your cheque is just due to a small change in the market value of the company.

I am puzzled by why the nominal value changed from £5 to 5p but this does not have anything to do with the value of the company. You still "control" the same percentage of the company as you did before but, instead of owning a percentage of a business plus a large pile of cash, you now own a percentage of a business plus a small pile of cash - the difference between the piles of cash has been given to shareholders like yourself.

You have not been scammed and your investment is as safe as any other investment in the larger UK companies, perhaps moreso.

Thanks for the reply maxsteam