Best practice capital raising outcome announcements

Treasury Wine Estates (TWE), November 2023: did a 1-for-9.45 PAITREO at $10.80 to raise $825 million to fund $1.6 billion US Wine acquisition. It disclosed that the $604 million million institutional component was only 78% subscribed. The retail offer finished heavily short but at least they disclosed that 15,800 shareholders or 18% of the total took up 23% of the available shares.

Weebit Nano (WBT), April 2023: excellent transparency in this SPP outcome announcement which revealed 9.8% of eligible shareholders - 1,197 out of 12,185 - contributed $18.64 million to the fixed price SPP at $5 which was up-scaled from $10m to $15m with good transparency in the outcome announcement on the scale back formula.

Flight Centre (FLT), March 2023: announced a $180 million placement at $14.60, a 7.8% discount to the previous close of $15.83, followed by a $40 million SPP with secondary pricing based on a 2% discount to VWAP. The SPP was swamped by $350 million in applications from 19,304 of the eligible 104,719 shareholders.

Orica, September 2022: excellent transparency in this SPP outcome announcement which revealed 8.7% of eligible shareholders - 3,200 out of 36,809 - contributed $41 million to the VWAP-priced SPP which was capped at $75 million, following an earlier $600 million placement priced at $16.

Bannerman Energy, April 2022: Excellent transparency in this SPP outcome announcement which disclosed that 1,856 out of 6,342 eligible shareholders participated, 45% weren't scaled back and those that were could work out their allocation through a handy table.

Stanmore Resources, March 2022: Revealed that 280 retail shareholders applied for the $23 million of retail entitlements but failed to disclose how many applied for additional shares.

AMCIL, March 2022: Went with an uncapped SPP which was priced at $1.16 on a VWAP -2.5% formula and included the following in the outcome announcement:

"...applications from approximately 530 shareholders (representing a participation rate of 16%) totalling $10 million."

MA Financial (MAF, formerly Moelis), February 2022: Received $45.3 million in applications for its SPP but only lifted the cap from $10 million to $20 million but at least we got this excellent participation data showing a staggering 65% participation rate:

"The SPP...was open to 3,379 eligible holders, a total of 2,206 shareholders participating in the plan, with valid applications received of $45.3 million, or an average of $20,533 per applicant."

Whitefield (WHF), August 2021: the LIC raised $50 million from sophisticated investors in a placement priced at $5.56, which was followed up by a $30,000 SPP. Ended up raising $26 million with excellent transparency in the outcome announcement including these words:

"A total of 1,660 individual holders participated in the plan out of 6,417 eligible holders representing a participation rate of 26%. Valid applications totalled $26 million or an average of $15,674 per applicant."

Wilson Leaders, August 2021: after detailed text and telephone engagement, they came up with excellent disclosure in the outcome announcement only failing to disclose precisely how many shareholders were sent the entitlement offer and the total amount of bids for the shortfall/placement at the end. These are the specific words we really liked, particularly given it is rare that you get placement participant numbers:

"The entitlement offer raised $145.8 million from 10,321 shareholders, the Top-Up facility raised $47.8 million from 3,416 shareholders and the Shortfall Facility and additional placement raised $83.6 million from more than 650 investors."

Costa Group: July 2021 (CGC): $190 million 1-for-6.33 PAITREO at $3 to fund a $200 million acquisition in Queensland. The $114 million institutional component was 90% supported and the shortfall cleared at $3.30, generating 30c in compensation for non-participants. The best disclosure related to the retail rights trading when the company made this announcement:

"Retail entitlements worth approximately $1 million were traded on the ASX between 28 June and 12 July in a range between 19.5c and 37c. The VWAP was 25c."

Computershare, April 2021: after detailed email engagement, they came up with the best disclosure we've seen yet, starting with these words ahead of the retail shortfall bookbuild:

"The retail entitlement offer was open to approximately 36,100 Computershare retail shareholders. Approximately 14,900 shareholders elected to partially or fully take up their entitlement, subscribing for 13.8 million new shares and raising approximately $187.6 million. This represented an aggregate participation rate of approximately 56% by value and 41% by shareholder numbers."

Further on, it said: "4.8 million retail entitlements were sold on market...realising $5.9 million for retail investors. The VWAP was $1.23 per retail entitlement."

Even better was the announcement after the retail bookbuild which included these words:

"The bookbuild was covered 3.7x at the floor price of $13.55 with the company receiving 44 bids for a total demand of $549 million at that price. The clearing price of $14.55 was covered 1.2x with the company receiving 15 bids at that price for a total demand of $189 million. Of the successful bids, 6 of the 15 investors received their allocation in full. The highest bid was $14.85 with 0.2% coverage."

Insurance Australia Group, December 2020: after receiving $125.9 million in SPP applications, which was above the $100 million cap, the SPP outcome announcement included these words:

"The SPP was open to 640,216 eligible shareholders. IAG received approximately $125.9 million of valid applications from 11,651 eligible and qualifying custodians representing a 1.8% application participation rate. The average application amount was approximately $10,800.

Sydney Airport: Followed the example set by Transurban in this January 2018 announcement when it first revealed the following on September 7: "Strong support resulted in approximately 53,000 retail securityholders electing to partially or fully take up their entitlements, which amounted to subscribing for approximately 94.2 million new securities, being approximately $430 million, reflecting a participation rate of 62% by value...Retail entitlements worth approximately $19 million were traded on the ASX between Friday, August 14 and Wednesday, August 26, in a range between 55c and 89s. The VWAP for retail entitlements traded was 78c."

There was also good disclosure on September 8 with this statement detailing the outcome of the retail shortfall bookbuild.

Qantas: after receiving $71.7 million in SPP applications, which was below the $500 million cap, the SPP outcome announcement included these words:

"QANTAS received valid applications totalling $71.7 million from 8,660 eligible shareholders. This represents a participation rate of approximately 5% of the 173,343 shareholders, and an average SPP application amount of $8,200."

Afterpay: after receiving $136 million in applications, which was below the $150 million cap, the SPP outcome announcement included these words:

"The SPP was sent to 53,465 eligible shareholders and 10,110 valid applications were received, representing a participation rate of 19% based registered holdings. The average application was $13,300."

Kogan: after receiving $115 million in applications, expanded the $15m SPP to $20m and was transparent in the SPP outcome announcement with these words:

"The SPP was open to 13,015 eligible shareholders. Valid applications totalling $115.3 million were received from 6,793 eligible shareholders, representing a participation rate of 52.19% and an average application amount of $16,970."

Blackmores: after receiving $77 million in applications, expanded the $25m SPP to $49 million and was transparent in the SPP outcome announcement with these words:

"The SPP offer was open to 18,282 eligible share holders and valid applications were received from 4,519 shareholders, reflecting a participation rate for those eligible shareholders of 25% and an average application amount of $16,961."

Atlas Arteria: after receiving $180m in SPP applications, failed to lift the $75m but was transparent in the SPP outcome announcement with these words, although it didn't specify the 35.7% participation rate:

"The SPP offer was made to approximately 26,000 eligible securityholders and Atlas Arteria received valid applications from approximately 9,300 beneficial security holders. The valid applications received represent an average application amount of $19,600."

United Malt: after receiving $62.9 million in applications, lifted the $25m cap to $30.6 million and was transparent in the SPP outcome announcement with these words:

"The SPP was open to 12,965 eligible registered shareholders. Valid applications totalling approximately $62.9 million were received from 3,273 eligible shareholders, representing a participation rate of eligible shareholders of 25% at the record date and an average application of approximately $19,000."

Breville: Stuck with a $10m SPP despite receiving $54.7 million in application but at least was transparency in the SPP outcome announcement with these words:

"The SPP closed with Breville receiving valid applications totalling approximately $54.7 million from approximately 3104 eligible beneficial shareholders of Breville, with an average application amount $17,611. The number of applicants represents a participation rate of 44.25%." (implying that 7015 offers were made).

Newcrest: after a $1 billion placement, launched a $100m SPP which attracted $300m and was lifted to $200m. Adopted best practice transparency in SPP outcome announcement with these words:

"The SPP was open to 54,107 eligible shareholders. Valid applications totalling approximately $300m were received from 15,574 eligible shareholders representing a participation rate of eligible shareholders of 23% and an average application amount of approximately $19,200."

Lend Lease: after a $950 million placement, launched a $200 million SPP that was expanded to $260m and adopted best practice transparency but was the first to do it through dot points. See the SPP outcome announcement which included the following words:

# The SPP was open to 60,688 eligible securityholders.
# Lend Lease received approximately $429.4 million worth of valid applications from approximately 24,700 securityholders.
# The average application amount was approximately $17,400.

NAB: after a $3 billion placement, the $500 million SPP was expanded to $1.25 billion and the bank adopted best practice disclosure in this SPP outcome announcement:

"The SPP offer was made to approximately 615,000 eligible shareholders, with valid applications received from approximately 155,000 eligible shareholders for a total value of approximately $2.9 billion. Valid applications received represented a participation rate of approximately 25% of eligible shareholders (representing 21% by shareholding), with an average application amount of approximately $18,500."

Ramsay Healthcare: after a $1 billion placement, the $200m SPP was expanded to $300m and the company adopted best practice disclosure in this SPP outcome announcement:

"The SPP was open to 80,273 eligible shareholders and valid applications totaling $695 million were received from 41,877 shareholders, reflecting a participation rate for eligible shareholders of 52% and an average application amount of $16,596."

Infomedia: after a $70m placement, the $15m SPP ended up attracting $13.94m and the company adopted best practice disclosure in this SPP outcome announcement:

"The SPP offer was made to 5,011 eligible shareholders. Valid applications totalling approximately $13.94 million were received from 771 eligible shareholders. This represents a participation rate of approximately 15.3% of eligible shareholders." And unstated, the average application was $18,080.

Monash IVF: completed an $80 million capital raising with some excellent detail when announcement the outcome of its $15 million entitlement offer were "overs" of 100% permitted. See SPP outcome announcement:

"A total of 1,203 valid applications for retail entitlements were received for approximately 10.1 million News Shares for approximately $5.3 million, representing a take-up rate by eligible shareholders of approximately 36%. In addition, a total of 424 applications for approximately 2.3 million News Shares for approximately $1.2 million were accepted under the top-up facility, increasing the total take-up from eligible retail shareholders to approximately $6.4 million representing a total take-up of approximately 43%."

Metcash: after a $300 million placement at $2.80, a $30m SPP was launched which ended up being priced at $2.28, a 2.5% discount to VWAP. See SPP outcome announcement:

"The SPP offer was open to 19,124 eligible shareholders and valid applications totalling approximately $13.6 million were received from 1,214 eligible shareholders. This represents a participation rate of approximately 6.3% of eligible shareholders. The average SPP application amount was approximately $11,200."

SCA Property Group: after a $250m placement at $2.16, offered a $50m SPP and adopted best practice disclosure in this SPP outcome announcement:

"The UPP offer was sent to approximately 60,000 security holders and valid applications totalling $29.3 million were received from approximately 2,350 holders. This represents a participation rate for those security holders of 3.9% and an average application worth $12,500."

Electro Optic Systems: After a $134 million placement at $4.74, the completed a $10.78 million SPP in May 2020 and adopted the following best practice disclosure in its SPP outcome announcement:

"The EOS SPP offer was sent to 8,357 eligible shareholders and valid applications totaling $10.78 million were received from 740 registered shareholders. This represents a participation rate for those eligible shareholders of 8.9% and an average application worth $14,578."

IDP Education After a $225 million placement, they completed a $29 million uncapped SPP in May 2020 and adopted the following best practice disclosure in its SPP outcome announcement:

"The SPP offer was made to 2949 eligible registered shareholders. Valid applications totaling approximately $34.5 million were received from 1,292 registered shareholders. This represents a participation rate of approximately 44% of eligible shareholders."

Next DC: After a $672 million placement, they completed a $190 million uncapped SPP in May 2020 and adopted the following best practice disclosure in its SPP outcome announcement:

"The SPP offer was open to 17,015 eligible shareholders and valid applications totaling approximately $191 million were received from some 8,684 shareholders, reflecting a participation rate for those eligible shareholders of 51% and an average application amount of $22,051."

Reece Australia: After a $647 million capital raising, Reece adopted the following best practice on its SPP participation:

"1991 out of 4897 eligible shareholders participate in the SPP."

However, it did not reveal how many shareholders participated in the accompanying retail entitlement offer or how many applied for additional shares, as Webjet did a few days earlier (see below).

Cochlear: responded positively to a transparency request using the following words in its 3-page SPP outcome announcement:

"The SPP offer was made to 36,724 eligible shareholders and valid applications totaling approximately $417 million were received from 16,651 shareholders. This represents a participation rate of approximately 45% of eligible shareholders. The average SPP application amount was approximately $25,000."

Webjet: Wrapping up its $118m non-renounceable 1-for-1 retail offer in April 2020, the company responded positively to requests for extra transparency with the following words which provided more information on the "overs" component than any other issuer to date:

"The offer was sent to 24,060 eligible security holders and Webjet received 12,633 valid applications for approximate 50.4 million shares worth $86 million, implying a take-up rate of 72.7%. Webjet also received, under the top up facility, applications from 8324 retail investors for 27.5 million additional new shares in excess of their entitlement aggregating to approximately $46.7 million....All eligible applications for additional new shares will be scaled back by approximately 31%."

Carbon Revolution: After a $25 million placement they completed a $2.73m SPP in April 2020 and responded positively to a request with the following words:

"The SPP offer was sent to 3053 eligible security holders and 252 applications were received, providing a take-up rate of 8.25% of and an average application of $10,833."

Afterpay: didn't go for precise numbers but still broadly embraced the improved disclosure template with these words on January 22, 2020. They were also the first issuer to do this when imposing a scale back on an SPP:

"The SPP Offer was sent to approximately 40,000 eligible securityholders and over 15,000 valid applications were received, representing a participation rate of 37% based on the registered holdings. As the value of applications, approximately $240 million, significantly exceeded the cap of $30 million for the SPP, the Afterpay board has decided exercise its discretion under the SPP terms to scale back applications to a total of approximately $33 million." See announcement.

Westpac: adopted the new model for disclosing participation rates in the SPP with these words on December 10, 2019:

"The SPP Offer was made to approximately 618,300 Eligible Shareholders, with valid SPP applications received from approximately 40,900 Eligible Shareholders. Valid applications received represent a participation rate of approximately 7% of Eligible Shareholders with an average SPP Application amount of around $18,850. The final amount raised of $770 million excludes approximately $68 million of withdrawal requests accepted from approximately 3390 Eligible Withdrawal Applicants." (Those who had applied before the AUSTRAC litigation was launched).

Costa Exchange:

Responded positively to a request to include the following data on retail rights trading in this announcement on November 21, 2019:

"Retail entitlements worth approximately $3.8 million were traded on the ASX between Wednesday, October 30, 2019 and Monday, 11 November 2019, in a range between 34c and 67c. The VWAP for retail entitlements traded during this period was 54c."

AMP: partially adopted the new model for disclosing participation rates in the SPP with these words on September 10, 2019 but didn't disclose low percentage of 2.1% and rounded up the participation number:

"The SPP was sent to 713,273 eligible share holders, with valid applications received from approximately 15,000 shareholders and an average application worth A$10,000."

AMP reported that it had 738,817 shareholders in May 2019, so 96.5% were eligible for the SPP.

Transurban: adopted the new model for disclosing participation rates in the SPP with these words on September 4, 2019:

"The SPP offer was sent to 117,291 eligible security holders and Transurban received valid applications from approximately 23,460 eligible security holders. The applications received represented a participation rate of 20% of eligible security holders and equates to an average application amount of $13,292."

Transurban reported that it had 117,707 shareholders in August 2019 so 99.64% were eligible for the SPP.

Abacus Property Group: adopted the new model for disclosing participation rates in the SPP with these words on August 28, 2019:

"The SPP offer was sent to 5,867 eligible securityholders and valid applications totaling $4.3 million were received from 392 holders. This represents a participation rate for those eligible securityholders of 6.7% and an average application worth $11,001."

Growthpoint: adopted the new model for disclosing participation rates in the SPP with these words in July 2019:

“The SPP offer was sent to 3,958 eligible securityholders and 1,672 applications were received, providing a take-up rate of 42.24% and an average application of $14,086.”

GPT: lifted a $50 million cap on its SPP to $66.8 million and then used these excellent words in the outcome announcement:

“The SPP offer was sent to 31,781 eligible Security holders and valid applications were received from 5,980 Security holders. This represents a participation rate of 18.8% and an average application worth approximately $11,170.”

GPT reported it had 32,614 shareholders in March 2019 so 97.44% of shareholders were eligible for the SPP.

Mirvac: see this announcement in July 2019 which included the following key paragraph:

“The SPP offer was sent to 24,158 eligible Security holders and valid applications totalling $46.2 million were received from approximately 3,386 Security holders. This represents a participation rate for those eligible Security holders of 14 per cent and an average application worth $13,600.”

Mirvac reported it had 24,183 shareholders in August 2019 so the offer was sent to 99.9% of shareholders.

Dexus: voluntarily set a new benchmark for transparency and data disclosure in their announcement in June 2019 by including this paragraph:

“The SPP offer was sent to 26,774 eligible Security holders and valid applications totalling $63.9 million were received from approximately 4,640 Security holders. This represents a participation rate for those eligible Security holders of 17.3 per cent and an average application worth $13,800.”

Dexus reported in August 2019 that it had 26,175 eligible shareholders so somehow the SPP was sent to 102.3% of eligible holders.

APA Group: Announced that 19,800 of their 75,000 shareholders applied to participate in a 2018 PAITREO and also did well revealing the size of the retail shortfall the night before the auction. However, no information was provided on retails rights trading.

Woodside Energy: After email requests, it was great to get a positive response which saw Transurban-style disclosure from the oil and gas giant at the conclusion of its $2.5 billion PAITREO capital raising. Woodside's 1-for-9 offer at $27 saw $1.57 billion raised from the institutional offer which was 90% subscribed. The shortfall cleared at $29.60 giving $2.60 to non-participants. The $930 million retail offer retail offer opened on February 21 and rights trading ran from February 19 until February 28. Best practice set by Transurban saw Woodside make this ASX announcement, disclosing the size of the retail shortfall before the auction. It was 40% or 14.4 million entitlements costing $389 million. The announcement also revealed that $12 million worth of rights were traded in a range between $1.12 and $2.58.

Transurban: It is always pleasing to see new levels of transparency in the public company space and this announcement from Transurban on January 29, 2018 set a great benchmark. After making a specific request for additional disclosure of Transurban, we loved this response from the company because never before had there been such detail revealed on capital raising participation. When chronic non-participation by retail investors in capital raisings is a major problem, we need more data on what steps need to be taken to both lift participation and ensure non-participants are compensated fairly when diluted.

Transurban revealed that 53,800 shareholders applied for $395 million shares, comprising 72% of the $554 million worth of new shares on offer in the PAITREO. Even better, was this statement: “Retail entitlements worth approximately $7.5 million were traded on the ASX between 15 December and 17 January in a range between 26c to $1.75. The volume weighted average price for retail entitlements traded during this period was 88 cents.”

No issuer had ever summarised the outcome of rights trading in this level of detail before and we trust others will follow suit in the future.

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