Best practice capital raising outcome announcements


September 27, 2019

Here is a list of best practice announcements by companies at the end of capital raisings.

AMP: partially adopted the new model for disclosing participation rates in the SPP with these words on September 10, 2019 but didn't disclose low percentage of 2.1% and rounded up the participation number:

"The SPP was sent to 713,273 eligible share holders, with valid applications received from approximately 15,000 shareholders and an average application worth A$10,000."

AMP reported that it had 738,817 shareholders in May 2019, so 96.5% were eligible for the SPP.

Transurban: adopted the new model for disclosing participation rates in the SPP with these words on September 4, 2019:

"The SPP offer was sent to 117,291 eligible security holders and Transurban received valid applications from approximately 23,460 eligible security holders. The applications received represented a participation rate of 20% of eligible security holders and equates to an average application amount of $13,292."

Transurban reported that it had 117,707 shareholders in August 2019 so 99.64% were eligible for the SPP.

Abacus Property Group: adopted the new model for disclosing participation rates in the SPP with these words on August 28, 2019:

"The SPP offer was sent to 5,867 eligible securityholders and valid applications totaling $4.3 million were received from 392 holders. This represents a participation rate for those eligible securityholders of 6.7% and an average application worth $11,001."

Growthpoint: adopted the new model for disclosing participation rates in the SPP with these words in July 2019:

“The SPP offer was sent to 3,958 eligible securityholders and 1,672 applications were received, providing a take-up rate of 42.24% and an average application of $14,086.”

GPT: lifted a $50 million cap on its SPP to $66.8 million and then used these excellent words in the outcome announcement:

“The SPP offer was sent to 31,781 eligible Security holders and valid applications were received from 5,980 Security holders. This represents a participation rate of 18.8% and an average application worth approximately $11,170.”

GPT reported it had 32,614 shareholders in March 2019 so 97.44% of shareholders were eligible for the SPP.

Mirvac: see this announcement in July 2019 which included the following key paragraph:

“The SPP offer was sent to 24,158 eligible Security holders and valid applications totalling $46.2 million were received from approximately 3,386 Security holders. This represents a participation rate for those eligible Security holders of 14 per cent and an average application worth $13,600.”

Mirvac reported it had 24,183 shareholders in August 2019 so the offer was sent to 99.9% of shareholders.

Dexus: voluntarily set a new benchmark for transparency and data disclosure in their announcement in June 2019 by including this paragraph:

“The SPP offer was sent to 26,774 eligible Security holders and valid applications totalling $63.9 million were received from approximately 4,640 Security holders. This represents a participation rate for those eligible Security holders of 17.3 per cent and an average application worth $13,800.”

Dexus reported in August 2019 that it had 26,175 eligible shareholders so somehow the SPP was sent to 102.3% of eligible holders.

APA Group: Announced that 19,800 of their 75,000 shareholders applied to participate in a 2018 PAITREO and also did well revealing the size of the retail shortfall the night before the auction. However, no information was provided on retails rights trading.

Woodside Energy: After email requests, it was great to get a positive response which saw Transurban-style disclosure from the oil and gas giant at the conclusion of its $2.5 billion PAITREO capital raising. Woodside's 1-for-9 offer at $27 saw $1.57 billion raised from the institutional offer which was 90% subscribed. 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. Best practice set by Transurban saw Woodside make this ASX announcement, disclosing the size of the retail shortfall before the auction. It was 40% or 14.4 million entitlements costing $389 million. The announcement also revealed that $12 million worth of rights were traded in a range between $1.12 and $2.58.

Transurban: It is always pleasing to see new levels of transparency in the public company space and this announcement from Transurban on January 29, 2018 set a great benchmark. After making a specific request for additional disclosure of Transurban, we loved this response from the company because never before had there been such detail revealed on capital raising participation. When chronic non-participation by retail investors in capital raisings is a major problem, we need more data on what steps need to be taken to both lift participation and ensure non-participants are compensated fairly when diluted.

Transurban revealed that 53,800 shareholders applied for $395 million shares, comprising 72% of the $554 million worth of new shares on offer in the PAITREO. Even better, was this statement: “Retail entitlements worth approximately $7.5 million were traded on the ASX between 15 December and 17 January in a range between 26c to $1.75. The volume weighted average price for retail entitlements traded during this period was 88 cents.”

No issuer had ever summarised the outcome of rights trading in this level of detail before and we trust others will follow suit in the future.