Shares

SPPs priced on VWAP at a discount to earlier placement


May 25, 2020

This list looks at Share Purchase Plans (SPPs) which offered a VWAP pricing alternative that delivered a final price lower than what institutions paid in the earlier placement.

Afterpay, 2018: retail paid $16.96 for $25 million in a scaled back SPP based on a VWAP with no discount after an earlier $117 million institutional placement at $17. See announcement.

AMP, 2003: raised $95.7 million from retail investors based on a $5000 SPP priced at $4.82, which was a 5% discount to VWAP based on the 15 days of trading after the offer closed. UBS under-wrote the SPP to the tune of $550 million so it picked up the balance. There was an earlier $1.2 billion institutional placement at $5.50 in May 2003, so retail received a 12.3% discount but the take-up from AMP's 900,000 shareholders at the time was modest.

ANZ, 2015: The ANZ SPP ended up raising $720 million at $26.50, a healthy 14.4% discount to the earlier $2.5 billion institutional placement at $30.95 which subsequently became the subject of some ASIC enforcement action. Investors were offered a 2% discount to VWAP in the SPP and the original $500 million cap was lifted to $720 million so there were no scale backs. This is the biggest ever VWAP priced SPP.

Bank of Queensland, 2019: $250m placement at $7.78 which was followed by an $89.7m SPP which was priced at $7.27 based on a 2% discount to VWAP. Therefore, retail ended up paying 51c or 6.55% less than the institutions.

Bendigo and Adelaide Bank, 2020: after a $250m placement at $9.34, the SPP was offered at a 2% discount to VWAP and raised $44.8 million at $6.72, a hefty 28% discount to the institutional price. See announcement.

Bendigo and Adelaide Bank, 2012: after a $150m placement at $8.45, the SPP was offered at a 2.5% discount to VWAP. The needlessly constrained $7000 SPP ended up raising $46 million at $7.43 so this was a useful 12% discount to what the institutions paid. See announcement.

Challenger Financial Group, 2014: raised $250 million in a placement at $7.53 but then the $15,000 SPP was offered with a 2.5% discount to VWAP. The pricing finished at $7.10, a 5.71% discount to what the institutions paid. The soft cap of $30 million was lifted to accept all of the $40 million in applications. See announcement.

Metcash, 2020: $300 million placement at $2.80 followed by a $30m SPP at $2.80 or a 2.5% discount to the 5-day VWAP. Stock traded at a discount throughout the offer period and ended up being priced at $2.28, an 18.2% discount to the placement price. Only 6.3% of holders or 1214 contributed $13.6 million to the SPP which ended up comprising just 4.3% of the overall $313m capital raising. See SPP outcome announcement which had excellent transparency. 6/10.

Orica, 2020: launched a $500 million placement at $21.19 and the follow-on SPP ended up raising just $17.3 million at $15.93, a 2% discount to the 5-day VWAP and a 24.8% discount to the placement price.

Over Fifty Group, 2010: $6.5 million placement at 72c followed by a a $15,000 SPP at 72c or a 10% discount to VWAP which came in at 64c, an 11.1% discount to what the institutions paid. SPP was capped at $4 million but the full $4.28 million in applications were accepted. See announcement.

QBE Insurance, 2020
: $30,000 SPP at $8.25 or a 2% discount to VWAP after $US750m placement. Finished up attracting $91.5 million and being VWAP priced at $7.51, an 8.9% discount to the placement price, so QBE joined our growing list of companies where retail paid a lower price than institutions in a capital raising.

Steadfast, 2018: $100m placement at $2.83 to fund Whitbread acquisition and subsequent SPP was offered with a 1% discount to VWAP and finished up raising $7.7m at $2.75, a 2.8% discount to the placement price. See announcement.

Tassal, 2019: $108m placement at $4.40 to accelerate prawn farming strategy with a capped $25m SPP at $4.31 (adjusted for distribution) or a 2% discount to VWAP. SPP ended up raising $17.4 million at $4.16. See announcement.

Transurban, 2019: $500 million placement at $14.70 but then retail were offered a $200 million SPP at the same price or a 2% discount to VWAP which finished up settling at $14.64 as per this announcement. All $312 million in applications were accepted, making this one of the few finely priced ASX200 SPPs which was priced based on VWAP but also received applications exceeding the nominated cap.