Placing of new shares?

, I don;t quite understand this placing of 29m new ordinary shares & over-allotment option of 5m. Is this putting more shares on the market? cap was around 拢60m in dec 06 but not worth 87m-if 拢50m been raised, why is it not 拢60+拢50=拢110m?

Does this mean more share capital for existing shareholders get a smaller portion of the pie? If this is the case, why can't companies create more share when under hostile takeover when the to lower the % share ownership of targeter

"Application has been made for 29,838,848 new ordinary shares of 1p each (comprising 29,484,848 new ordinary shares conditionally placed on 30 November 2006 and 354,000 new ordinary shares conditionally placed pursuant to the over-allotment option granted by the Company to Dresdner Kleinwort)

what is the over allotwhat is the over allotment option? granted to Dresdner?
is this placing like a rights issue?

What are the advantages & disadvantages of new shares placed?

In the US, the SEC grants the right to sell shares on the open market, and they will grant a specific number of shares at a specific par value (usually very low).

The company must apply to the SEC to sell more than this under any circumstances.

In your case, it sounds like there's a business being purchased or merged with and there is an issuance of stock as part of the purchase price. An option was awarded to Dresdner Kleinwort for part of the deal, and an application has to be made to cover the shares being issued. The purchase/merger will probably be pending until the shares are actually authorized for issue.

For current shareholders, deals like this have both good and bad points. Mergers often draw attention and increase stock prices, but at the same time, the issuance of so many shares dilutes the value of shares already outstanding.