Shares

Companies which pre-limited "overs" on pro-rata raisings


August 1, 2022

This list tracks the small number of companies which limited the amount of additional shares or "overs" that retail shareholders could apply for in a non-renounceable issue, before seeing how big the shortfall actually was.

Overs that had a pre-offer dollar figure limit

Australand, 2009: overs were limited to a maximum of $40,000 or 100% of entitlement. Finished 3% short. See announcement.

Folkestone, 2014: 1-for-4 at 20c with all shareholders limited to maximum overs of $100,000. Finished 16% short after only $1.6m in overs applications. See announcement.

Overs limited to 15% of entitlement

Ingenia Communities, 2019: non-renounceable 2-for-17 at $3.93 to raise $110 million with overs restricted to just 15%. See announcement.

Ingenia Communities, 2021: announced a 1-for-4.24 non-renounceable entitlement offer at $6.12 to raise $485 million to fund a series of residential acquisitions. The insto component raised $370 million with a 92% participation rate and the $115 million retail component will be shared across around 5,000 eligible shareholders with applicants entitled to apply for overs equivalent to just 15% of their entitlement.

Overs limited to 20% of entitlement

Redflex Holdings (RDF), 2017: 1-for-3 at 44c to raise $16.4m with overs limited to 20% of entitlement. Outcome announcement said nothing about take-up rates given was under-written by Baillieu.

Overs limited to 25% of entitlement

Flight Centre, 2020: $700 million capital raising with the pro-rata component limited to overs of just 25% of the entitlement.

G8 Education, 2020: $300 million capital raising with $76m retail component limited to overs of just 25%.

GPT, 2009: shareholders limited to overs of just 25% of their entitlement. This only brought in $27 million of overs and left a $300 million retail offer $73 million under-subscribed.

St Barbara, 2019: 1-for-3.1 non-renounceable at $2.89 to raise $490 million with overs limited to 25% of entitlement. The shares tanked so the $131 million retail component only received $4 million in applications. See announcement.

Pact Group, 2017: 1-fo-9 at $5.28 to raise $176m with retail limited to 25% overs. Retail offer was worth $26m and had an 84% takeo-up rate but no break down of split between entitlement and overs. See announcement.

Overs limited to 33% of entitlement

Galaxy Resources (GXY), 2020: $161 million raising at $1.70 (a 15% discount to the previous close of $2) comprising an over-sized $111 placement and a 1-for-14 non-renounceable to raise $50 million with applications for additional shares limited to 33% of entitlement. The accelerated component raised $124 million and the subsequent $37 million retail offer was fully under-written and received $25.1 million in applications delivering a take-up rate of 66%. This split $20.4 million in applications and $4.7 million in overs, leaving a $12 million shortfall which wouldn't have existed if overs were unlimited.

Overs limited to 35% of entitlement

Bank of Queensland, 2021: the entitlement offer limited overs to just 35% of entitlement.

Overs limited to 40% of entitlement

Virgin Australia, 2013: All investors limited to 40% of their entitlement which lead to a $51m shortfall that went to foreign airline under-writers. See this piece in Crikey.

Overs limited to 50% of entitlement

Bega Cheese (BGA), 2020: agreed to buy Lion's Dairy and Drinks business for $534 million and launched a $401 million capital raising priced at $4.60 comprising a $181 million institutional placement, the maximum 15% allowable under the rules, and a $220 million 1-for-4.5 non-renounceable. The $103 million institutional component of the pro-rata offer was supported by 96% of eligible shareholders with the $117 million retail component finish short because overs were limited to 50% of entitlement. Unfortunately, the $115 million retail offer fell $57 million short with just $46 million in applications and $12 million in overs.

Challenger Diversified Property Group, 2009: $130 million 4-for-7 raising retail investors were limited to overs equivalent to 50% of their entitlement, UBS was the under-writer and controlling shareholder Challenger Financial Services was able to lift its controlling stake to 46% at a discount courtesy of an $8 million shortfall. Finished 36% short. See announcement.

DUET Group, 2014: $395 million non-renounceable offer but overs were limited to just 50% of the entitlement. See this piece in Crikey.

Gascoyne Resources (GCY), 2020: $85 million equity raising at 2.5c comprising a $35 million placement of 1.4 billion shares and a 2-for-1 non-renounceable entitlement offer to raise a further $50 million with "overs" limited to 50% of entitlement. The stock last traded at 3.9c on May 29 before being suspended and it still the subject of a DOCA after an earlier collapse. The record gold price is bringing back the dead as Gascoyne promises a revitalised mine plan for its existing Dalgaranga project in WA, plus aggressive pursuit of a number of exploration opportunities. The retail offer attracted $17.1 million in applications and was 71.3% subscribed with the shortfall to be dealt with ahead of trading resuming in late October after a 5 month suspension. Stock finished the year at 43c after a 20-for-1 capital reconstruction so those who shelled out the $85 million at the equivalent of 50c are under water.

Gateway Lifestyle, 2016: non-renounceable 2-for-15 entitlement offer at $2.40 to raise $80m. Retail raised $20m and 50% overs saw it more than 100% subscribed. Scale back was to 50% of overs which was confusing given claims of over-subscription. See announcement.

IGO Ltd (IGO), 2021: announced a $1.9 billion lithium acquisition partially funded by a $766 million capital raising comprising a $446 million institutional placement at $4.60 (a 9.7% discount to the previous close of $5.09) and a 1-for-8.5 non-renounceable offer to raise $320 million. The $262 million institutional component was 98% subscribed (excluding 13% shareholder Mark Creasy who only took up $20 million of his entitlement) and the $58 million retail component allowed for 50% overs. The take-up rate was a healthy $53 million or 93% which the company advised comprised $38 million in entitlements and $15 million in overs. IGO made the offer to 9,977 eligible shareholders and a healthy 5,085 or 51% took it up. The outcome announcement didn't include this detail.
Kiland (KIL), 2022:
the Kangaroo Island agriculture play announced a 7-for-11 non-renounceable at $1.10 (a 6% discount to the previous close of $1.17) to raise $32.4 million with the unusual rule that retail investors could apply for overs equivalent to 50% of their entitlement up to a maximum of $5 million.

Lynas (LYC), 2020: $425 million raising comprising a $212 million placement at $2.30, a 12% discount to the previous close, followed by a 1-for-7.7 non-renounceable entitlement offer at the same price with applications for additional shares limited to 50% of entitlement. There was no disclosure on the take-up rate in the $100 million institutional component of the entitlement offer. The $114 million retail offer attracted $60 million in applications from 7697 holders, which included $10 million in overs. The $54 million shortfall was given away to under-writers with no bookbuild so retail were quite badly diluted by the whole exercise, starting off with a majority stake in the company but only contributing $60 million of the $425 million raising. Stock finished 2020 at $3.90 so raising was a boomer for participants.

TPG Telecom, 2017: 1-for-11 at $5.25 to raise $400 million with retail offer limited to 50% of entitlement in overs. Finished fractionally short at 99.7%. See announcement.

Panoramic Resources (PAN), 2020: $90 million raising at the heavily discounted price of 7c comprising a $29 million placement and a $61m 1.15-for-1 non-renounceable entitlement offer at 7c with retail shareholders limited to "overs" of 50% of entitlement. The institutional component raised $52m including $23.2m for the accelerated offer with the large $38m retail entitlement offer, which included overs, finishing 66% subscribed, leaving a big shortfall for under-writer Western Areas. 3/10

Select Harvests (SHV), 2020: a $120 million raising to fund a $129 million almond acquisition in regional Victoria, comprising a $40 million placement at $5.20 and a 1-for-6.3 non-renounceable entitlement offer at $5.20. The pricing was a tight 4.8% discount to the previous close of $5.46 and the company claimed to have 99% participation in the $41.5 million institutional component of the pro-rata offer. The $38.3 million retail offer included an ability to apply for additional shares equivalent to 50% of entitlement but it ended up being only 57% subscribed including overs totalling $5.9 million. See outcome announcement.

Overs limited to 100% of entitlement

BWX (BWX), 2022: emergency $23.2 million raising to pay down debt, comprising a $13.5m placement and a 1-for-10 to raise $9.7 million. Both were priced at 60c, a crushing 48.7% discount to the last trade of $1.17. The pro-rata offer attracted $7.6m in subscriptions plus "overs" worth 600k lifting the total to $8.2m which represented an 85% take-up rate. The balance went to under-writer Bell Potter. Overs should have been unlimited rather than restricted to 100% of entitlement. Stock was trading at 68c at the end of July, shortly after the offer closed.

Corporate Travel (CTD), 2020:
raised $375 million through a 1-for-4.03 non-renounceable entitlement offer at $13.85, a 14.3% discount to the previous close of $16.16. The $262 million institutional component was 90% supported with the shortfall going to a undisclosed institutional investors at no premium. The $113 million retail offer went to around 17,000 retail investors and permitted overs of up to a maximum of 100% of entitlement. The stock soared to $17.23 when trading resumed and it ended up being over-subscribed with $92 million in applications and $53 million in overs. See outcome announcement.

Monash IVF (MVF), 2020: $80m capital raising at 52c, a hefty 26.8% discount to the previous trade of 71c. Comprised a $39.8m placement and a $40.2m 1-for-3 entitlement offer with retail able to apply for overs of 100% of entitlement. Good disclosure in the outcome announcement which showed a 43% take up of the $15 million retail offer comprising $5.3 million in entitlements and $1.2 million in overs.

Kazia Therapeutics (KZA), 2020: 1-for-3 non-renounceable entitlement offer at 80c to raise $25 million. Priced at a 16.7% discount to the previous close of 96c. The institutional component raised $16.4 million and the retail component capped overs at 100% of entitlement but only brought in $2.8 million or 32% with the rest being picked up by the under-writers. See outcome announcement.

QUBE: have now done 3 pro-rata entitlement offers with overs limited to 100% which finished over-subscribed. Latest was 2020 which finished 38% over-subscribed. See outcome announcement.

Webjet, 2020: retail investors limited to 100% overs in $115 million entitlement offer which finished over-subscribed.

Overs limited to 200% of entitlement

Coronado (CRN), 2020: A $250 million raising at 60c comprising an over-sized $145 million placement and a 2-for-11 $105 million accelerated non-renounceable which had a 95% participation rate from institutions although a corporate shareholder was diluted without compensation. The $11 million retail offer attracted $9.6 million in applications (including overs which were capped at 200% of entitlement) meaning the $1.4 million shortfall went to under-writers. The stock was at 72c when the retail offer allotted so these were tasty profits for the under-writers left on the table by retail.

Cooper Energy, 2017: 1-for-2 at 31.5c in April 2017 with overs capped at 200%. Finished 60% short but no disclosure of breakdown between entitlements and overs. See announcement.

Oil Search, 2020: $1.16 billion capital raising with $80 million retail component limited to overs of 200% of entitlement.