Text of email request to Macquarie re $1.5b placement in 2021

November 8, 2021

Below is the text of an email request sent to Macquarie Group after it announced a $1.5 billion institutional placement on October 29, 2021. It was pleasing to see some of the requests taken up in this ASX announcement.

Greetings Team Macquarie,

Well done on a record interim result announced on Friday, plus the accompanying capital raising.

I have a couple of disclosure requests for the period ahead.

Firstly, in terms of the placement outcome announcement on Monday morning, I would be delighted if you could do any or all of the following:

# Outline the approach Macquarie took to accommodating the pro-rata entitlement of existing shareholders, similar to what Transurban did with this 2020 placement outcome announcement which it described as a pro-rata offer and said that all eligible institutions were fully satisfied if they bid for their pro-rata entitlement.

# Provide some detail on the mechanics of the bookbuild in terms of bid numbers and book coverage, such as what Computershare did in this retail shortfall outcome announcement earlier this year.

# Clarify which Macquarie staff, directors or executive share ownership vehicles were not permitted to participate in the placement.

# Seeing as there was no third party under-writer or book runner, explain who ran the auction and the board oversight, particularly from independent directors.

# Disclose how many bookbuild participants were allocated stock, including the range of allocations and overall average.

In order to demonstrate the practical implementation of these requests, these are the 4 paragraphs that you would include in Monday's announcement, although I'm obviously guessing the numbers and policy decisions, such as where the line was drawn on insider participation. I've also included some foreshadowing commentary on the upcoming SPP, which includes a comment about your excellent history of having never scaled back retail investors in an SPP:


The $1.5 billion placement of approximately 7.9 million ordinary shares was the equivalent of a 1-for-46.7 pro rata offer considering that Macquarie had 368.83 million ordinary shares on issue when the placement was launched. Where practical in order to minimise dilution, Macquarie allocated new shares close to the equivalent pro-rata allocation for existing institutional shareholders which bid at the clearance price.

A total of 579 parties participated in the bookbuild auction, including eligible institutional shareholders, some existing sophisticated retail shareholders, former staff and clients of Macquarie Securities. The book was 2.5 times covered at the base price of $190 and 1.2 times covered at the final clearing price of $192.50, a discount of just 2.7% to the previous close of $197.83. A total of 127 bidders were allocated stock, ranging between $5 million worth of shares and $47 million with the average allocation being worth $11.8 million. The auction was run by executives from Macquarie Capital on Friday and overseen by a committee comprising the CEO, CFO and three independent directors, which approved the final allocations. Final binding offers were lodged by 4pm on Friday. The offer was not under-written and therefore incurred minimal costs for shareholders.

Macquarie Group directors, members of the executive committee and Macquarie's existing 17,000-plus staff were not permitted to participate in the placement auction.

The forthcoming $30,000 Share Purchase Plan will be open to approximately 200,000 eligible retail shareholders and the board is not placing an explicit cap on the amount to be raised but reserves the right to scale back applications. If that were to occur, the scale back policy would be pro rata based on size of holding. Macquarie Group has completed 6 previous SPPs since 2006 and never imposed a scale back.

I will be sharing this request with executives from the ASX and writing about it in future Crikey and Eureka Report columns, including the Macquarie response.

Whilst it would clearly not be practical to accommodate all of these requests in the short time frame, it would be terrific if Macquarie could pro-actively embrace maximum transparency and disclosure in Monday's outcome announcement. Macquarie was one of the first issuers to routinely disclose how many retail shareholders participated in their SPPs, so it would be great if you could match or beat recently disclosure initiatives embraced by the like of Transurban and Computershare.

Kind regards
Stephen Mayne
Macquarie Group shareholder