AREO capital raisings which compensated non-participants but had no retail rights trading

January 12, 2024

This list tracks AREO capital raisings which compensated or attempted to compensate non-participants but offered no rights trading, a structure which was the precursor to the PAITREO.

APN News & Media, May 2016: 1-for-3 at 53 to raise $180m with the $160m accelerated insto component supported by 95% of eligible shares with the small shortfall clearing at 65c generating 12c for non-participants. The $20m retail offer attracted $14.4m or 69% support whilst the retail shortfall cleared at 67c, generating 14c for non-participants, which exceeded the equivalent institutional payment by 2c.

Cockatoo Coal (COK), October 2010: a 2-for-5 renounceable at 40c to raise $96.4m, accompanied by an additional $57m placement at a premium of 45c. Non-participants in the accelerated insto component got 5c in compo as the shortfall placed at the placement price of 45c. Retail took up $27.2m worth of stock leaving a $13.3m shortfall which cleared at a healthy 51c, giving 11c to the non-participants which was a win for retail on the compensation stakes.

Evolution Mining (EVN), 2016: launched a $400 million 2-for-15 at $2.05 with the accelerated insto component raising $311 million and the $90 million retail offer falling $30 million short but they offered a bookbuild of the shortfall which cleared at $2.35, providing 30c of compensation for non-participants.

FKP, 2009: $324 million 1-for-1 entitlement offer at 40c in mid-2009. Retail component was worth $120 million and received 46% acceptances even though it was renounceable and investors could not apply for overs. The remaining $65m was offered in a bookbuild by Goldman Sachs JB Were and cleared at 40c, so no premium was paid to non-participants.

Orica the $899 million renounceable entitlement offer in August 2008 was a one-for-eight at $22.50 a share. Institutions stumped up $604 million and retail were offered $295 million. However, only 52% of the shares available were taken up (6.8m out of 13.1m) and the rest were sold to institutions at a 10c premium of $22.60 which raised $138 million. Retail investors couldn't apply for overs but did renounce into the bookbuild, for which they collected just 10c a share.

Slater & Gordon, April 2015: launched a disastrous 3-for-5 renounceable offer at $6.37 to fund its crazy $1.3 billion Quindell acquisition in the UK. The insto component brought in $608 million with an 80% participation rate and the shortfall cleared at a healthy $7.50, generating $1.13 for the lucky non-participants, which included plenty of management. The $282 million retail component brought in $120 million with a 41% participation rate but the $162 million shortfall only cleared at $6.38, generating just 1c for non-participants.