Placement offenders who owe SPP


September 3, 2018

The following list tracks companies which did institutional placements over the past few years that diluted retail investors who are now owed a share purchase plan to make good the injustice.

AMP: started with a $450 million institutional placement at $5.30-a-share in late 2008 followed by a share purchase plan at $5.16 which raised $109 million. Retail were slightly diluted so another offer is in order.

Aquila Resources: Chinese steel giant Baosteel to invest up to $286 million for a 15% stake in the company through a placement at $6.50 a share. Retail investors should be offered a $15,000 SPP on the same terms.

Aristocrat Leisure: $200 million placement at $3.25 in April 2009 followed by a $24.4 million SPP and a $1 million placement to the founding Ainsworth family. Retail own more than 15% so an additional SPP would be warranted.

Asciano: started with a $5000 SPP at $4.30-a-share in September 2008 which raised $103 million, although $79.5 million came from under-writer Goldman Sachs-JB Were. Dithered until mid-2009 when it unleashed a 1-for-1 entitlement offer at $1.10 to raise $769 million, plus $1.56 billion in institutional placements. Finished up with a $10,000 SPP to raise another $100 million in August 2009, but this was heavily scaled back and could have been expanded to $180 million without shareholder approval. Retail investors are owed an SPP worth at least $500 million in 2010 when the requisite 12 months have lapsed since the last SPP.

Axa Asia Pacific Holdings: $500 million placement at $2.85 in March 2009 followed by a $10,000 SPP which raised $166 million. The 92% of shareholders who ignored the SPP were clearly diluted so another offer in March 2010 would not go astray.

Bank of Queensland: $108 million raised in early 2009 through a placement and $45 million through a share purchase plan at $7.64 a share. Came back with another $340 million raising in August 2009 comprising a $143 million institutional placement at $10 a share plus a $197 million 1-for-9 entitlement offer at the same price, with retail contributing $121 million or 61%. This suggests that a further $200 million SPP for retail is warranted to offset the dilution from the two institutional placements.

Bendigo & Adelaide Bank: raised $175 million at $10-a-share in December 2008 comprising $95 million from an institutional placement and $80 million from a $5000 SPP. Followed this up with a $300 million raising at $6.75 in August 2009 which included a $127 million institutional placement, $52 million from the institutional entitlement offer and $121 million from the retail entitlement offer. Given that retail investors started the process owning about 72% of the bank, they are clearly owed an SPP worth about $200 million.

Bluescope Steel:
$300 million institutional placement at $3.10 a share in December 2008 and then a further $113 million raised in a follow-on share purchase plan in early 2009. However, that was dwarfed in May and June of 2009 with a $1.413 billion entitlement offer at $1.55 a share, including $613 million from retail investors. Dilution is minimal, but top-up SPP wouldn't go astray.

Boart Longyear: a four-part capital raising unveiled in August 2009 which comprises a 1-for-1 entitlement offer at 27c, an unconditional $120 million insitutional placement, a $230 million institutional placement conditional on shareholder approval and then a promised SPP for retail, which had better be big given all the dilution. The retail offer finished more than $120 million under-subscribed because the stock struggled to stay about 27c.


Commonwealth Bank: $2 billion raised through institutional placement at $38 a share in October 2008 to fund BankWest acquisition and another $2 billion raised from institutions at $26 a share on December 18, 2008 with a share purchase plan that attracted applications of $865 million with no scale back. However, retail were still shafted twice because there was no SPP with the first raising and in the second they missed out on the $1.13 fully franked dividend that institutions pocketed. Retail investors are owed at least a $1 billion SPP.

Commonwealth Office: $192 million placement on February 9, 2009 at 80c a share and a follow through $5000 unit purchase plan raised only $13.3 million so clearly another $10,000 SPP is now required to help offset the retail dilution.

Crown: $300 million placement at $4.95-a-share in December 2008 with James Packer stumping up $100 million and subsequent $5000 share purchase plan which only raised $40 million from retail investors. Time for an additional $10,000 SPP for retail investors reflecting the expanded maximum of $15,000 in each 12 month period.

CSL:
$2 billion placement to fund US acquisition in August 2008 at $36.75 a share and then followed up with $143 million raised through a share purchase plan, bringing the total to $2.143 billion. Retail investors owed another SPP worth at least $500 million, although the US acquisition fell over so the business now has too much capital.

CSR: did a $125 million placement in December 2008 at $1.40 a share and a one-for-four entitlement offer at the same price as part of an overall $349 million raising. Retail investors are clearly owed an SPP worth about $100 million.

Dexus Property Group:
$300 million placement on December 3, 2008 at 77c a unit and then picked up an additional $11.5 million through the share purchase plan which was attractively priced at 70.67c. Followed up with a $749 million raising in April and May of 2009 but only $91 million came from retail investors in the 2-for-7 offer at 65c. Institutions were placed $90 million as part of this deal. Given the total of $390 million in placements, a $200 million-plus SPP is owing to retail investors.

Duet Group: $132 million institutional placement at $1.50 a share in April 2009 was coupled with a 1-for-6.25 shares entitlement offer which raised at further $133 million. An SPP of up to $100 million for retail investors is outstanding.

Fortescue Metals:
placed 17.4% of the company with the Chinese Government at $2.48 a share raising $645 million in March 2009 but still hasn't offered the same deal to its loyal but unloved retail shareholders.

Goodman Group:
1-for-1 entitlement offer at 40c in August 2009 raised $1.11 billion, plus a $167 million institutional placement, which suggests a compensatory SPP should follow the entitlement offer closing.

GPT: $1.6 billion raised through a combination of entitlement offer and placement in October 2008, with the Singapore government emerging as the saviour investing more than $400 million. Retail was entitled to $518 million in the one-for-one offer at 60c but only took up $300 million with the shortfall going to the Singapore Government. Backed up with another $1.7 billion raising in May and June of 2009 which included a one-for-one entitlement offer at 35c, plus a $120 million placement. Retail now owed at least a $500 million SPP.

Hastie: $29 million institutional placement and $48 million 1-for-4 entitlement offer at $1.15 a share in May 2009 with the retail component raising $17 million. Retail clearly owed an SPP worth about $20 million.

Iluka Resources: $353 million raised in a four-for-seven rights issue at $2.55 in March 2008 and then followed up with a $114 million placement at $3 a share in May 2009 but failed to deliver retail investors an SPP, so clearly owe an offer of up to $100 million.

ING Office: raised $414 million through a $150 million placement and 1-for-2.9 entitlement offer at 80c a share in December 2008 and then followed up with a 2-for-5 at 45c in mid-2009 to raise an additional $415 million, although this also included a $90 million placement. Given the total $240 million in placements, retail investors are owed at least a $50 million SPP.

Insurance Australia Group: raised an initial $450 million through an institutional placement at $3 a share in February 2009 with a further $84.4 million raised through $5000 share purchase plan at the same price. Given the large retail shareholder base and new $15,000 SPP limit, another $10,000 SPP offer to mums and dads is warranted.

Karoon Gas: $150 million institutional placement at $6.70 a share in June 2009 followed by a $23.5 million SPP which was unfortunately restricted to $5000 for each shareholder. An additional $10,000 SPP should be offered to retail investors.

Lend Lease: completed a $300 million institutional placement on February 4, 2009 at $6.05 a share to strengthen the balance sheet but the shares then tanked to a 20-year low of $5.50 so they abandoned the SPP for retail investors. Worth coming back with a $15,000 SPP now that the stock has soared and retail investors have finished up heavily diluted.

Lihir Gold:
an early raising in April 2007 through an entitlement offer at $2.30 and a smaller $120 million placement at $2.80 to close out the hedge book. Given the placement, a $100 SPP is owing.

Macquarie Office: raised $508 million in late 2008 comprising a $100 million institutional placement at 20c, $243 million from an institutional entitlement offer and $165 million from the retail component, although $71.8 million came from Macquarie Group as under-writers. Retail comprised 40% of the register when this process started but only stumped up $93 million of the $508 million raised. Therefore, retail investors are owed an SPP worth up to $300 million.

Mirvac: $500 million raising at 90c in late 2008 including a $72 million placement and 0.4-for-1 entitlement offer. This was followed by a $1.1 billion raising in mid-2009 which included a $153 million placement and a 5-for-9 entitlement offer at $1.10. The retail offer was only subscribed for $110 million or 63% although the under-writers bought the 65 million shares left over at $1.10 a share. Given the $225 million in placements and $70 million retail shortfall which is now well in the money, a $200 million SPP looks in order.

NAB:
$3 billion placement in November 2008 at $20 a share and then only a further $250 million raised in a share purchase plan in December 2008 which was priced at $19.97 a share and brought the total raising to $3.25 billion. Backed up with another $2 billion institutional placement at $21.50 a share in July 2009, accompanied by an SPP capped at $750 million, despite receiving applications worth $2.6 billion. Retail investors are owed up to $3 billion worth of SPPs to restore the balance.

Newcrest: $750 million institutional placement at $27 a share on February 2, 2009 with a follow-up $5000 share purchase plan which only brought in an extra $59 million. Given the law now allows for $15,000 SPPs, Newcrest could and should come back with another $10,000 SPP to raise at least $100 million from retail investors.


Nufarm: raised $300 million through an institutional placement at $11.25 a share in May 2009 and then collected an additional $35 million from the follow-on SPP which was priced at $10.18 a share. However, it was the full $15,000 SPP so retail investors missed their chance and have been diluted given the stock has now recovered.

Onesteel the raising in April-May 2009 including a $240 million institutional placement at $1.80 a share, plus a 2-for-5 entitlement offer at $1.80. The retail component of $205 million was well short of the $319 million maximum as investors left plenty on the table whilst institutions cleaned up. Retail investors are clearly owed an SPP worth about $300 million.

Photon Group:
raised $114.6 million in August 2009 through a $26.6 million placement at $1.85 and a 1-for-2 entitlement offer at $1.50 to raise a further $87 million. However, at least the placement was at a very skinny discount.

Primary Healthcare: initially raised $184.5 million through an institutional placement at $11.90 a pop on November 9, 2007 with no SPP for retail. Then came a $1.231 billion entitlement offer at $5.40 in early 2008 which only raised $70 million from retail but did return non-participants a 10c premium after an institutional book build. Followed up with a $315 million institutional placement at $5 in mid-2009 and then a $5000 SPP that only raised $27.5 million. Given most SPPs are $15,000 these days, Primary should follow through with an additional $10,000 SPP.

Qantas: $500 institutional placement million at $1.85 in February 2009 caused the shares to tank and the subsequent $10,000 SPP was capped at $150 million but only raised $26 million at the bargain price of $1.51. The tiny minority of retail investors who took up the offer did well, but the rest have been heavily diluted so another SPP is justified and Qantas could do the full $15,000 from next March.

QBE: $2.1 billion placement on November 28, 2008 at $20.50 a share to fund acquisitions and then raised additional $114 million in a heavily scaled back share purchase plan. Retail investors are owed an SPP worth up to $1 billion.

Ramsay Healthcare: $240 million placement at $10.05 completed in August 2009 with a $40 million SPP to come although this seems capped at an unfairly small amount.

Santos: $500 million placement at $12.55 in December 2010 and no sign yet of a follow-up SPP.

Sonic Healthcare: $425 million placement in November 2008 at $11.60-a-share and follow-on $5000 share purchase plan that only pulled in $44 million. Clearly owe their retail investors an additional $10,000 SPP to raise up to $200 million more.

Stockland: $300 million placement on October 7, 2008 at $5.30 a share, but then canned the subsequent share purchase plan because there was no alternative VWAP market pricing and the stock tanked. Came back with a far more comprehensive $1.98 billion raising at $2.70-a-share in May and June of 2009, which comprised a $200 million institutional placement and a 2-for-5 entitlement offer. Retail investors were offered $420 million but only took up 70% of the in-the-money offer. Given there has been a total of $500 million in placement, retail investors are owed an SPP worth at least $200 million.

Suncorp: emergency $1.046 billion raising in February 2009 at $4.50 a share which included a $390 million placement, $465 million through the institutional entitlement offer but retail only took up $191 million of a possible $502 million. Therefore, the dilution was heavy indeed and retail is owed an SPP worth about $700 million.

Tabcorp: $300 million placement at $5.80 a share in February 2009, with the subsequent $5000 share purchase plan raising $87 million. Should clearly offer another $10,000 SPP to raise at least $100 million more from retail investors.

Ten Network Holdings: completed a $138 million placement at $1.15 a share in August 2009 but failed to follow through with a share purchase plan for retail investors when a $50 million offer should be on the table.

Transfield Services: emergency one-for-one capital raising at just $1.25 in December 2008 which also included a $59 million placement. The retail component of the entitlement offer was $102 million and the institutional $145 million, but retail only coughed up $63 million, so the dilution was quite heavy and a $100 million SPP is warranted. Finally came through with an offer in September 2010.


Virgin Blue: 1-for-1 entitlement offer at 20c raised $210 million in August 2009, plus some lucky institutions shared in a $21 million placement at the same heavily discounted price, so retail investors deserve a $21 million SPP at 20c to keep them in the game.

Wesfarmers: $900 million placement to two institutions at $14.25 as part of $4.5 billion capital raising in early 2009. The rest was a 3-for-7 entitlement offer at $13.50, although retail investors only took up $1.6 billion of their $3 billion entitlement so the dilution has been enormous, especially with Wesfarmers shares now well north of $30.

Westfield: $2.9 billion placement at just $10.50 a share in February 2009, but only $60 million raised from the subsequent SPP at $10.04.

Westpac: $2.5 billion placement in December 2008 at $16 a share followed by a share purchase plan in January 2009 which pulled in an additional $442 million so total of $2.94 billion raised. Given retail investors own about 40% of Westpac, the mums and dads are owed an SPP worth at least $1 billion.

White Energy Company: raised $55 million from an institutional placement at $1.50 in May 2009 but then only an additional $2.5 million came in from retail in the subsequent SPP so perhaps another offer is in order.