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:
POTENTIAL COMMENTARY IN
MACQUARIE'S PLACEMENT OUTCOME ANNOUNCEMENT TO THE ASX
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
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