Companies which refused or scaled back applications for new shares

Amcor: see announcement. on September 15, 2009

Australian Infrastructure Fund: see announcement on July 17, 2009 savagely scaled back to just 50-odd new shares after applying for $20,000 in entitlement offer at $1.10.

Alliance Resources: raised $41 million through a placement at 68c and subsequent 1-for-12 entitlement offer at 60c in June 2009 but didn't allow for shareholders to apply for extra shares. However, $5 million of shortfall placed at 68c so at least company didn't give the stock away. See announcement on July 3, 2009

Alumina: could have raised the maximum $1.02 billion from a 7-for-10 entitlement offer at $1 but after pocketing $737 million from institutions - $103 million more than first estimated - decided to scale back retail investors who applied for extra. After receiving $299 million in applications (5% above the theoretical retail maximum of $285 million), a $60 million scale back reduced the final retail raising to $239 million. The scale back formula was 3 times the entitlement but with no minimum and this led to more than 2000 small shareholders being left unsatisfied. Alumina still haven't said what percentage of applicants was satisfied like Wesfarmers, Bluescope, Fairfax and Onesteel did. See announcement that was dropped at 5.10pm on Friday, May 8, 2009

Apex Minerals: 2-for-15 entitlement offer at 20c in June 2009 which didn't allow for any additional applications.

APN News & Media: applied for $15,000 worth of news shares at $1 in entitlement offer but scaled back to just $41 worth of new shares. See announcement on May 28, 2009.

Asciano: savagely scaled back to less than 100 new shares after applying for $57,000 at $1.10 through two entitlement offers. See announcement on August 20, 2009

Aspen Corporation: applied for $10,000 worth of shares at 30c but scaled back to tiny allocation. See announcement on June 19, 2009.

Ausenco: $45,000 into three $15,000 SPPs at $3.20 but scaled back to $6000 and made profit of about $1200. See announcement on July 7, 2009

BC Iron: announced a $9.4 million placement and $12.6 million 1-for-6 entitlement offer in June 2009 which is underwritten by Argonaut Securities. The retail component doesn't appear to have any ability for retail investors to apply for extra. See announcement on July 23, 2009.

Bendigo & Adelaide Bank: See announcement on September 14, 2009. Applied for $30,000 worth of shares across two entitlements and allocated 2000 shares at $6.75. Sold for an average $8.29 for a profit of $3083.



Billabong: the first entitlement offer where the "overs" of $42 million exceeded the entitlement applications of $36 million. It seems the word is spreading. The retail maximum was $61 million but the scale back policy was generous to smaller investors because it accepted for a minimum of 7,500 shares worth $56,250 or 3 times the entitlement. Our $25,000 application was accepted in full.

Charter Hall: billionaire John Gandel agreed to become a cornerstone shareholder at just 33c a share and when the shares spiked up to more than 50c after the original announcement, he scooped up the entire retail shortfall of 9 million shares. Why did Charter Hall even bother to invite additional applications if it had agreed to do this? See announcement on June 23, 2009.

Clarius: see announcement on September 30, 2009. $20,000 into 1-for-3.5 entitlement offer at 64c but scaled back to just 10 new shares as formula was 2.3 times entitlement.

Clean Seas Tuna: I applied for $3300 worth of shares but was only allocated 13 in their 1-for-8 entitlement offer in June 2009. The really strange thing was they suggest they were left with a shortfall so it looks like existing shareholders were shafted and the under-writer picked up the discounted left overs. See announcement on June 17, 2009.

Cougar Energy: exited two scaled back $15,000 SPPs at 8.25c for 9.9c to make a profit of $2600.

DUET: limit was 3.5 times the entitlement but with no minimum. See announcement on May 1, 2009.

Energy & Minerals Australia: $15,000 into two entitlements to $15,000 SPP at 21c but scaled back to just $4084 allocation which were sold at average 25.7c for a profit of $914. Also sold 19,450 free options at 7.2c for a profit of $1400 so total profit $2314.

Fairfax Media: raised $623 million in a 3-for-5 entitlement offer at 75c in April 2009. Retail component had a maximum of $183 million and Fairfax received $123.3 million in applications, comprising $97.6 million in entitlements and $50.4 million in additional applications. The overs were scaled back by $23 million and the formula was 3 times the entitlement or 50,000 shares worth $33,333. This led to 98% of applicants for additional new shares being satisfied but the offer finished $61 million short of the retail maximum. See announcement on April 3, 2009.

Fletcher Building: bought 1226 at $4.15 in scaled back share purchase plan and sold 1266 at $5.09 for profit of $1152. See announcement on May 21, 2009.

GPT Group: 1-for-1 entitlement offer at 35c in June 2009 which only allowed retail investors to apply for "overs" equivalent to 25% of their entitlement. This partly explained why the offer finished $75 million short of the $300 million under-written retail component, all of which went to the under-writer UBS and its clients. See announcement on June 16, 2009.

Gunns: see announcement on September 30, 2009. $18,000 into entitlement offer at 90c. Scaled back to virtually nothing.

Hastie: raised $77 million through a 1-for-4 entitlement offer in June 2009. The maximum retail component was $17.2 million but Hastie received $22.7 million comprising $11.5 million in entitlements and $10.7 million in additional applications. The "overs" were cut in half to $5.7 million through a formula which gave shareholders 3.76 times their entitlement but with no minimum allocation to look after small shareholders. See announcement on June 17, 2009.

Hills Industries: see announcement on September 18, 2009

MacMahon Holdings: initially announced a $60 million raising comprising a $25 million institutional placement at 32c, an accelerated $20 million 1-for-5 institutional entitlement offer at 32c and a retail entitlement offer raising a maximum of $14.8 million. Despite taking up its full entitlement, major shareholder Leighton applied for extra shares in the retail offer and there was only a shortfall of $2.8 million anyway, which was massively over-subscribed by those retail shareholders who applied for extra. The scale back formula revealed that retail shareholders would get no more than 59% of their entitlement in extra shares. See announcement on June 15, 2009.

Macquarie Leisure: applied for $45,000 in three $15,000 SPP offers at $1.15 a share but scaled back to 1305 shares in total worth $1435 which were sold at an average $1.41 to make a gain of $340. See announcement on August 7, 2009.

QBE Insurance: did a $2 billion placement at $20.50 in December 2008 and then scaled back $226.5 million worth of SPP applications from 48,000 shareholders to just $114 million, equivalent to only 5.4% of the $2.114 million raised. Have a listen to QBE chairman John Cloney attempt to defend the outrageous scale back at the recent AGM in Sydney. The scale back formula saw everyone who applied for the maximum $5000 get only 50 shares if they owned less than 500 shares and to get the maximum they had to own more than 5000 shares. See the announcement on January 16, 2009.

OneSteel: 2-for-5 entitlement offer at $1.80 with a retail component worth a maximum $319 million. Received $238 million in applications, comprising $160 million in entitlements and $78 million in "overs". A $33 million scale back was imposed which saw the "overs" limited to 3 times the entitlement or 18,000 shares worth $36,000. This led to 99% of applicants for additional new shares being satisfied. See announcement on May 12, 2009.

Pacific Brands: 3-for-4 entitlement offer at 60c in June 2009 which raised $256 million, including $92 million through the retail offer. The company only allowed retail investors to apply for double their entitlement, partly explaining why the under-writer had to pick up the 17 million share shortfall, which is showing a profit of about $4 million. No disclosure of the size of the amount refunded and the percentage of applicants satisfied. See announcement on June 10, 2009.

PanAust: allocated retail shareholders who applied for extra stock no more than 54% of their entitlement in "overs". See announcement on June 25, 2009.

Ramsay Healthcare: exited three heavily scaled back $15,000 SPP offers at $9.835 for average $10.52 to make profit of $200.

Santos: revealed a $3 billion 2-for-9 entitlement offer in May 2009 which received $1.75 billion from institutions and had a theoretical maximum of $1.25 billion for retail investors. Applications of $1.1 billion poured in but no break-down was provided between entitlement and additional applications. Santos was the second secondary retail offer ever after Wesfarmers to receive more than $1 billion in applications but they came up with a bizarre scale back where everyone gets the minimum of 5000 shares unless you applied for more than 5000 shares in which case you get scaled back to 3 times your entitlement. This formula caused refunds of more than $160 million which increased the under-written short-fall to a whopping $312 million or 25% for the likes of JP Morgan and its partners Citi and Deutsche. Clearly some very small shareholders made some massive applications for "overs" because this policy fully satisfied 98% of applicants. See announcement on June 16, 2009.

Sedgman: $10,000 into $10,000 SPP at $1.30 but scaled back to 2693 shares worth $3500 and exited at $1.695 for profit of $1063.


Sky City Casino: bought 1700 in scaled back share purchase plan at $2.03 and sold 1,500 at $2.17 for profit of $238. See announcement on May 28, 2009.

Seek: stuck to its promise of allocating shareholders at least 13.35% of their existing shareholding in the $5000 share purchase plan, but also promised all shareholders a minimum of 1000 shares which disproportionately benefitted tiny shareholders such as me but at least all those with un-marketable parcels get to scale up, unlike with MacMahon. See announcement on June 16, 2009.

Structural Systems: offered $15,000 SPP at 78c in September 2009 but only wanted to raise $5.71 million and received applications worth $7.51 million from 595 shareholders so all applicants were scaled back by 24%. See announcement on September 8, 2009.

Virgin Blue: offered a heavily discounted 1-for-1 offer at 20c in September 2009 and came up with a flat scale back formula for "overs" of 0.842 of each applicant's entitlement. There was no minimum allocation of "overs" for all those thousands of shareholders stuck with unmarketable parcels courtesy of the Toll de-merger and plunging share price. See announcement on September 8, 2009.

Wesfarmers: 3-for-7 entitlement offer at $13.50 with a theoretical retail maximum of $3 billion. The scale back announcement dropped at 7.28pm on February 25 revealed that despite only receiving $1.8 billion in applications, $100 million of the $300 million in "overs" was being rejected. So whilst institutions were placed shares worth $900 million over and above their entitlement, retail investors ended up leaving $1.3 billion on the table. The scale back formula was 3 times the entitlement or 1,000 shares worth $13,500 and this led to 95% of applicants for additional new shares being satisfied. See announcement on February 25, 2009.