Placements with entitlement offers where no SPP offered

January 11, 2024

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.

Bank of Queensland: $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%.

Bendigo & Adelaide Bank: 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.

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:
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.

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.

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.

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.

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 with no SPP at all.

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.

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.

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.