Tracking the outcomes of PAITREOs


April 21, 2019

This list tracks what has happened when companies have raised capital by way of a PAITREO. The most important point is whether non-participating institutional or retail shareholders receive the bigger compensation payment from separate bookbuilds and at the moment retail have 9 wins, instos 13 and there have been 5 draws.

29. Nufarm, September 2018: $303 million 3-for 19 PAITREO at $5.85 launched when the stock was at $6.64. Quoted a 90% institutional take-up but this excluded largest shareholder Sumitomo which received 50c a share from the shortfall offer which cleared at $6.35. No transaction just a profit warning due to the drought. The insto offer raised $238 million but there was no precise disclosure of how much came from the shortfall offer. Institutional offers Separately announced $31 million commitment from retail investors but the 6.2 million retail shortfall shares finished short so no compensation for non participants. UBS and Macquarie shared in a 1.9% fee. Another win for non-participating instos, including Sumitomo which was diluted from 18.4% down to below 16%. It was asked to pony up $55.7 million for 9.53 million shares but instead received $4.76 million in compensation and means the institutional shortfall offer was actually offering 12.63 million shares at a take up price of $74 million but which cleared at $80.3 million including the 50c premium.

28. Transurban. September 2018: $4.2b 10-for-57 PAITREO at $10.80 with the stock trading at $12.06 before it was launched. There was also a $600m placement at $10.85. The $3 billion institutional offer was 96% subscribed with the $120 million shortfall clearing at a $1 premium of $11.80. The $1.222 billion retail offer offered rights trading from September 5 until September 11 and traded between 40c and $1.01 with a VWAP of 55c. The retail offer was 67.56% subscribed as 53,800 investors bought $827m new shares. The shortfall of 36.7m shares cleared at $11, raising $403.7 million and giving about 47,000 non-participants a 20c compensation payment collectively worth $7.34 million. Was disappointing to see the share price crash from $11.48 to $11.13 in the 2 days before the retail auction and then bounce back to close at $11.24 on the day after, giving bidders in the auction a one day gain of $8.8 million. Another win for instos who got $1 versus 20c, but confirms that was better for retail to exit on market. In hindsight, Transurban should have pre-sold some of the retail shortfall.

27. APA. March 2018: $500m 1-for-17 at $7.70. The $288m institutional offer was 96% subscribed and the shortfall cleared at $8.00 giving 30c to non-participants. The $212 million retail offer was 47% subscribed with 19,800 of the 75,000 security holders buying new units worth $102 million, leaving a $110 million shortfall which cleared at $7.75, giving non-participating retail investors 15c so another win for institutions. No disclosure provided of rights trading, despite request.

26. Woodside: February-March 2018: $2.5 billion 1-for-9 at $27. The $1.57 billion institutional offer was 90% subscribed and the shortfall cleared at $29.60 giving $2.60 to non-participants. The $930 million retail offer retail offer opened on February 21 and rights trading ran from February 19 until February 28 with the shortfall auction scheduled for March 12. Given the market weakness in recent days, the rights have never traded above the $2.60 which non-participating institutions received so this looks like an offer where institutions will finish in front of retail. Indeed, retail shareholders only received $1.60 so a clear win for institutions. The VWAP for rights trading was $1.80 so shareholders did better exiting on market.

25. Transurban: December 2017-January 2018: $1.9 billion 3-for-37 at $11.40. The $1.35 billion institutional offer was 94% subscribed and the shortfall cleared at $12.50 giving $1.10 to non-participants. Trading ran from December 15 to January 18. The $550 million retail offer closed on January 24 with the shortfall auction comprising 13.6 million shares which delivered 50c in compensation to non-participants so a win for the institutions.

24. Nufarm: October-November 2017: $446 million 2-for-9 at $7.50. The $338m institutional offer was 95% subscribed (excluding Sumitomo) and the shortfall cleared at $8.50 giving $1 to non-participants. The $108 million retail offer attracted $85 million in applications or a healthy 77% take-up, leaving a $26m shortfall which cleared at $8.75, giving non-participating retail investors $1.25, so a win for retail.

23. Link: July-August 2017: $883 million 4-for-11 at $6.75. The $700 million institutional offer was 98% subscribed and the shortfall cleared at $7.70. The $183 million retail offer was 85% subscribed and the 4.1m share retail shortfall did 15c better than the institutional shortfall, clearing at $7.85, delivering $1.10 back to non-participants so a win for retail.

22. Downer EDI: March-April 2017: $1.011 billion 2-for-5 offer at $5.95. The $757 million institutional offer was only 66% subscribed and the shortfall failed to clear, delivering no compensation to non-participants. The $254 million retail offer also finished with barely any subscriptions as the under-writers finished up with $250.5 million worth of stock and non-participants received no compensation so this was a draw.

21. Boral: November-December 2016: $1.6 billion 1-for-2.2 at $4.80, plus a $450m placement at $4.80, which was a big discount on the previous close of $6.15. The $1.03 billion accelerated institutional component was 91% subscribed with the shortfall shares clearing at $5.25 as non-participants received 45c. The $484m retail offer was only 50% subscribed with $242 million in acceptances. The 51 million share shortfall cleared at $5.15, returning 35c to non-participants so this was another win for instos.

20. JB Hi-Fi: September-October 2016: $394 million 1-for-6.6 at $26.20. The $259 million institutional component was 94% subscribed with the 593,000 share shortfall clearing at $30.25 delivering $4.05 to non-participants. The $135 million retail component was 67% subscribed and the shortfall of 1.7 million entitlements cleared at $29.40, giving non-participants $3.20, so a win for the instos.

19. Vocus: June-July 2016: $453 million 1-for-8.9 at $7.55 on top of a $202 million placement at $8.42. The $230 million institutional component of the entitlement offer was 97% subscribed with the shortfall clearing at $8.42 delivering 87c to non-participants. The $220 million retail component was 69% subscribed and the shortfall of 9 million entitlements cleared at $8.42, giving non-participants 95c each, so a win for retail.

18. Transurban: November-December 2015: $1.025 billion 1-for-18 at $9.60. The $738 million institutional component was 90% subscribed with the 7.7m shortfall clearing at $10.10, delivering 50c to non-participants. The $287 million retail offer had 8 days of rights trading and was open for 12 days. There was a 70% take-up rate and the shortfall of 9 million entitlements cleared at 30c, giving a win to the instos.

17. Santos: November 2015: $2.5 billion 1-for-1.7 PAITREO at $3.85, plus a $500m placement at $6.80. The $1.17 billion accelerated institutional component was 86% subscribed with the 42.5m shortfall shares clearing at $4.60 in what was a $196m share sale as non-participants received 75c. The $1.35b retail offer closed 57% subscribed with $775 million worth of stock taken up. The 152m renounced retail offer shares cleared at $4.10, returning 35c to non-participants. Instos were the winner with 50c more compensation.

16. Origin Energy, Oct-Nov 2015: $2.5 billion 4-for-7 raising at $4. $1.35 billion insto offer was 92% subscribed with $108m shortfall clearing at $5.20, returning $1.20 to non-participants. $1.2 billion retail offer 67% subscribed and 100m shortfall shares fetched $5.35, returning a premium of $1.35. This hefty $535m raising sold at a 5.1% discount given the stock closed at $5.64 the day before. Retail were the winner with 15c more compensation.

15. Treasury Wine Estates, Oct-Nov 2015: 2-for-15 at $5.60 to raise $486 million. 89% take-up of $368 million institutional offer with $41 million shortfall clearing at $7.10. The $119 million retail offer was 57% subscribed and the 9.1m shortfall shares cleared at $7.16, returning $1.16 to non-participants, so a win for retail who got an extra 6c.

14. Westpac, Oct-Nov 2015: $3.5 billion 1-for-23 at $25.50. $1.6 billion insto offer was 95% subscribed with $80 million shortfall clearing at $30, returning $4.50 to non-participants. $1.9 billion retail offer closed on November 11 with 70% take-up as shortfall auction of 22.7 million entitlements on November 16 raised $670 million, returning $92 million or $4 per entitlement to non-participants. Instos got an extra 50c.

13. CBA, August-September 2015: $5.1 billion 1-for-23 raising at $71.50. $2.1 billion institutional component was 90% subscribed and shortfall cleared at $78, returning $6.50 to non-participants. $3 billion retail offer was 50% subscribed and raised $1.5 billion. Shortfall of $1.5 billion cleared at $73.50 returning $2 to non-participating retail investors, so a win for the instos who got an extra $4.50 in compensation.

12. NAB, May-June 2015: $5.5 billion raising at $28.50. $2.7 billion institutional component was 97% subscribed and $100 million shortfall cleared at $33.80, returning $5.30 to non-participants. $2.8 billion retail offer was 72% subscribed with $2.04 billion raised. Shortfall of 28.5m shares cleared at $31.60, returning $3.10 to non-participating retail investors, so a win for the instos who got an extra $2.20 in compensation.

11. Tabcorp, Feb-March 2015: $236 million 1-for-12 raising at $3.70. Institutional offer 92% subscribed with 3.2m share shortfall clearing at $4.51, returning 81c. Retail shortfall of 7.7m shares cleared at $4.52, returning 82c to non-participants, so a win for retail by 1c.

10. Arrium, Aug-Sept 2014: $754m raising including $656m 1-for-1 raising at 48c. $367 million institutional entitlement offer was supported by 77% but shortfall cleared at offer price of 48c so no compensation. $290m retail component only attracted about $12m in applications and shortfall failed to clear, going to the under-writers. Everyone a loser, especially under-writers and instos who participated, but no winner on shortfall sales.

9. AGL, Sept 2014: $1.23 billion 1-for-5 offer at $11. Institutional component raised $516m with 95% take-up. 2.3 million shortfall shares cleared at $2.85. 56,000 retail shareholders took up $500m or 70% of retail offer. The 19.7 million retail share shortfall cleared at $2.25 so a win for the instos by 60c.

8. ALS, July 2013: $246m 1-for-11 at $7.80. $112m raised in institutional component with 92% take-up as shortfall cleared at 95c. $134m retail offer had healthy 78% participation rate and shortfall also cleared at 95c, so no winner.

7. ASX, June 2013: $553 million 2-for-19 at $30. Institutional component of $267m with 96% take-up as shortfall cleared at $3.70. $286 million retail offer had 75% take-up with $3.40 clearing price in bookbuild, so a win for instos by 30c.

6. Brambles, June 2012: $450m 1-for-20 at $6.05. Institutional offer raised $333m with 83% take-up rate. Shortfall of 9.2m shares cleared at 45c. Retail offer raised $68m with 61% take-up rate. 7.8m share retail shortfall cleared at 25c. A win for instos by 20c.

5. AGL, May 2012: $904 million 1-for-6 at $11.60. The $356m institutional offer had a 95% take-up and the 1.4m shortfall cleared at $2.85. 60,000 retail shareholders applied for $404m worth of shares in the $532m retail offer with a 75% participation rate. The $128m retail shortfall cleared at $2.90. A win for retail by 5c.

4. Bluescope Steel, Nov 2011: $600m 4-for-5 at 40c. $338m institutional offer had 83% take up with 175m share shortfall clearing at 40c offer price. The $260m retail offer had a 48% take-up. The large shortfall cleared at 40c, so no compensation to non-participants and no winner.

3. Super Retail Group, Oct 2011: $334 million 9-for-19 at $5.34. $282m institutional offer only 47% subscribed and 28m share shortfall failed to clear at offer price. $50m retail offer had 46% take-up and retail shortfall of 4.3m shares cleared at $5.38, a premium of 4c, so win for retail by 4c.

2. Goodman Fielder, Sep 2011: $259 million 5-for-12 at 45c. $190m institutional offer 95% taken up and 30m share shortfall cleared at 50c. $69m retail offer was 60% taken up and 60.6m retail shortfall cleared at 50c, so no winner.

1. Origin Energy, March 2011: trail-blazing $2.3 billion 1-for-5 at $13. $1.13 billion institutional offer with 95% take-up as shortfall cleared at $2. $1.17 billion retail offer with 79% take-up as retail shortfall cleared at $2.80, so a win for retail by 80c.

PAITREO COMPANIES WHICH DID EARLIER AREOS


Transurban: $2.34b 10-for-43 AREO at $6.75. 95% insto take up of $1.79 billion insto offer which comprised 76.5% of the offer. The tiny shortfall of 13.2 shares cleared at $7, giving non-participants 25c in compensation. There was no retail rights trading so the $557.4 million retail offer was left with a shortfall of $193.3 million or some 34.68% of the total $557.4 million offer. The shortfall cleared at $7.21, giving non-participants 46c in compensation, which exceeded what the instos got.