Tracking retail take-up rates in pro-rata offers


December 31, 2018

The following lists tracks retail take up rates in pro-rata capital raising offers.

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

Amcor:
see announcement. on September 15, 2009 when Amcor confirmed it raised $407 million from retail investors at $4.30, still leaving a shortfall of 13.2 million shares or 16.2%. No breakdown between entitlement and overs but would guess approximately 50% of shareholders took up the offer.

Alumina 2009 (no disclosure of retail entitlement take up): 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

Alumina 2008 (53% retail take up or $141m out of $266m): raised $910 million through a renounceable 5-for-19 offer at $3 a share in September 2008 which saw retail investors who didn't participate receive a 35c premium courtesy of the institutional bookbuild. The $266 million retail offer was only 53% subscribed.

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

APN News & Media (55% subsscribed by retail with $8.8m out of $16m but then swamped with overs). completed 1-for-5 entitlement offer at $1 a share in June 2009 to raise $99 million. The controlling Irish shareholder did not participate in. The institutional component was $83 million and the retail $16 million, which closed fully subscribed courtesy of $8.8 million in applications and $39.4 million in overs, which were heavily scaled back.

Asciano: raised the maximum $427 million through a retail entitlement offer in 2009 which attracted $604 million in applications but no breakdown provided of entitlement and overs. This announcement said 80% of retail investors participated. The scale back policy was a flat 2.1 times the entitlement.

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

Australand 2008:$461 million renounceable rights issue at 60c completed in September 2008. Singapore Government stepped up with $300 million as major shareholder but $122 million retail offer received applications of $96 million but no breakdown between entitlement and overs. No premium from the bookbuild for investors who declined to participate.

Australand 2009: $475 million 7-for-10 entitlement offer in August 2009 at just 40c a share, which included $80.3 million from retail investors and $15 million from under-writers. The second offer accepted $100,000 in "overs" with no renounceability. No breakdown between entitlement and overs.

Australian Infrastructure Fund: see announcement on July 17, 2009. This company was close to 50% owned by retail before 1-for-2 capital raising at $1.10. No disclosure of breakdown between entitlement and overs but they scaled back 12% of overs applicants and were left with a shortfall of 18m shares or 19%. Am guessing the $106m retail offer was about 50% subscribed before overs.

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: $121 million retail offer at $6.75 attracted $121 million in total applications but no breakdown between entitlement and overs. Scale back policy was a minimum of 1000 shares or 3 times. See announcement on September 14, 2009.


Billabong (59% retail take up or $36m or $61m): 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.

Bunnings Warehouse Property Trust $150 million: 1-for-3.06 entitlement offer at $1.50 a unit in May 2009 with no placement component. Retail applied for $53 million in "overs" but this still left a $26 million shortfall for institutions.

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.

ConnectEast $871 million: revealed a one-for-one offer at 55c in December 2008 which saw professional tollroad investor and main underwriter CP2 finish with 27% of the company. All retail applications asking for additional shares over and above the entitlement were satisfied before CP2's underwriting kicked in. Came back with another $421 million 1-for-2 raising at 33c in August 2009 with no ability for retail to apply for extra.

DUET: a 1-for-6 at $1.30 in 2009 had a maximum retail allocation of $48.6 million which was met by allowing overs of 3.5 times the entitlement. No disclosure of entitlement and overs breakdown. See announcement on May 1, 2009.

Fairfax Media: (53.3% retail take up or $97.6m out of $183m theoretical maximum). 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.

FKP 2008: the troubled Queensland property player announced a $150 million 5-for-14 entitlement offer at $1.50 in October 2008 but this only produced $105 million as the market tanked. Retail participation appeared very small but no disclosure as was all done as one offer.

FKP 2009: $324 million 1-for-1 entitlement offer at 40c in mid-2009. Retail component was worth $120 million and received 46% acceptances even though it was renounceable and investors could not apply for overs. The remaining $65m was offered in a bookbuild by Goldman Sachs JB Were and cleared at 40c, so no premium was paid to non-participants.

GPT Group (73% subscribed by retail): 1-for-1 $1.7 billion 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 $73 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, which at least disclosed that the total overs comprised just 27 million shares out of the 857 million on offer. This suggests the retail offer was 73% subscribed for retail entitlements, equivalent to $218 million out of $300 million.

Gunns: entitlement offer at 90c was over-subscribed courtesy of the overs so full $31 million raised but no disclosure of breakdown. See announcement on September 30, 2009.

Gunns $334 million: raised $333 million from institutions through an accelerated 7-for-10 entitlement offer at $1.50 a share in August 2008 but then only an additional $1.4 million came through the door from the retail offer given the stock had tanked with the whole market after Lehman Brothers collapsed.



Hastie (66.86% retail take up, then oversubscribed by overs): 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

Incitec Pivot $902 million: 5-for-13 entitlement offer at $2.50-a-share in late 2008 but the focus was very much with the $819 million raised from institutions rather than the $83 million from retail investors, which was well short of the $351 theoretical maximum. The retail offer wasn't under-written.


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 Airports: raised $356 million through 1-for-11 raising at $2.30 in September 2009 to fund purchase of management contract. Received $670 million of application and there was only 11.6m shares or just 7.5% of those available left on the table by the combined retail and institutional investors. No disclosure of retail breakdown but take-up was clearly very high.

Macquarie Office: did a $100 million placement and then raised $408 million in a 1-for-1 offer at 20c in 2008-09, including $162 million through the retail offers which comprised accepting all applications for additional securities. Even former CEO Simon Jones applied for extra stock, something he couldn't have done if he was still a director. There was no disclosure of the breakdown between entitlement and "overs" in the retail offer and with Macquarie itself stepping in to buy an additional $78 million through its under-writing of the retail component. The institutional component was $243 million and Macquarie took up $28 million through this facility for a total investment of $106 million.

OneSteel: (50.16% retail take up or $160m out of $319m) 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.

Orica (52% retail take up or $153m out of $295m): the $899 million renounceable entitlement offer in August 2008 was a one-for-eight at $22.50 a share. Institutions stumped up $604 million and retail were offered $295 million. However, only 52% of the shares available were taken up (6.8m out of 13.1m) and the rest were sold to institutions at a 10c premium of $22.60 which raised $138 million. Retail investors couldn't apply for overs but did renounce into the bookbuilt, for which they collected just 10c a share.

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. 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.

Paperlinx ($35 million of $77 million retail component received or 45.45%): a 2-for-5 entitlement offer at $1.25 a share in October 2008 which raised $185 million and has been a disaster for investors. Retail component was $77 million but only $35 million was received given lack of overs and no renounceability.

Santos: (less than 40% take up) 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.

Peet $77 million: 1-for-3 entitlement offer at $1.10 a share in May 2009 with no placement component. Retail maximum was $17 million and received $13.2 million or 77% but this included unlimited "overs" with no disclosure of breakdown.

Rio Tinto $US15.2 billion: raised in June 2009 through a strictly pro-rata 21-for-40 renounceable rights issue as is required by British law. The Australian shortfall saw 7.86 million shares auctioned off at the offer price of $28.29. Institutions bid $48.50, so non-participants collected $20.10 per right. No break down between institutional and retail but the overall Australian offer was 94% subscribed.

Sigma Pharmaceutical $297 million: 1-for-3 entitlement offer at $1.02 a share in September 2009 which had no placement component and a bookbuild to compensate those who don't participate.

SP Ausnet $405 million: completed a 1-for-4 entitlement offer at 78c a share in June 2009 raising $333 million from institutions and $72 million of the $80 million sought from retail. Good disclosure revealed that 54% of investors participated and the ability to apply for "overs" was important, but no breakdown between entitlement and overs. All "overs" were accepted.

Suncorp (26.89% take up or $135m out of $502m) : announced a big placement and 1-for-5 entitlement offer with a theoretical retail maximum of $502 million but Suncorp only received $191 million in applications, comprising $135 million in entitlements and $56 million in overs. There was no scaleback as this announcement explains.

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 (50% take up or $1.5bn out of $3 billion): 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, 2009, 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.