Companies which lifted capped SPPs but still rejected applications

Adelaide Brighton, 2009: Capped SPP at $15 million but expanded this by 90% to $28.5 million after being overwhelmed with $57 million worth of applications. Investors received a minimum $1000 and then a 50% scale back. This followed an $85 million placement to institutions at $1.78.

Afterpay, 2020: $30m SPP at $23 after $317m placement and founder sell-down. Expanded to $33m after $240m worth of applications. Scaled back based on size of holding with minimum allocation of 22 shares costing $506. See outcome announcement.

Ansell (ANN), 2024: announced a $US640m acquisition of Kimberley Clarke's global PPE business which was being partly funded by a $400m placement at $22.45, a 6% discount to the previous close of $23.89, and a needlessly skinny $65m SPP at the same price. The SPP was marginally expanded to $75m after "more than" $170m came through the door from 8,480 holders. The scale back policy saw all applications allocated 45 shares costing $1010.25, with pro rata based on size of holding after that.

Arafura Rare Earths (ARU), 2022: proposing to raise $121 million in a two stage placement at 37c to progress its Nolans project in the Northern Territory. Priced at a steep 16% discount to the previous close of 44c. Gina Rinehart stormed the discounted offer grabbing an 8.37% or 166.2 million shares costing $61.5 million. The placement comprises an initial $95.8m allocation using the 15% placement cap and the balance of $25.1 million is subject to shareholder approval. The 21,000 retail holders were initially limited to a token $12m SPP after being massively diluted when the theoretical maximum in applications is $630m or some 52.5 times that figure. Disgraceful. If Gina wanted to become the largest shareholder she should have paid a premium on market, not be handed the stock at a 16% discount! In the end, 5,510 shareholders applied for $81.5m worth of stock and the board only expanded the SPP cap by a miserable $8m to $20, meaning $61.5m was refunded, matching the figure that was selectively placed to Gina. The scale back formula saw everyone with less than 100 shares zeroed and everyone else received 26% of what they applied for. See SPP outcome announcement.

Ardent Leisure, 2014: $15,000 SPP at $2.41. Directly engaged with company. Stock was trading around $3.11 at the time. They received about $60 million in applications and expanded the $15 million cap to $20 million but still refunded around $40 million. Everyone received a minimum allocation worth $500 and then 12% of their existing holding after that. See announcement.

Asciano, 2009: The SPP was pitched at $100 million after a $1.58 billion institutional placement and circa $800 million entitlement offer, but after applications worth $290 million from 31,000 holders, this SPP cap was slightly increased by 1.5% to $101.5 million so all applicants could receive 35% of their application. See announcement.

Atlas Iron, 2009: there was a $105 million placement and the SPP offer document mentioned a $11.7 million cap plus the formula for any scaleback but after applications worth $29.75 million were received, this was increased to $14.8 million so the scale back was only 50%. Offer expanded by 26.5%.

Bapcor (BAP), 2020: $180m placement at $4.40 followed by $30m SPP was expanded to $56 million after $122 million in total applications. Scale back formula giving all applicants a minimum of $1000 worth of shares and 50% of their current holding after that. See announcement.

Bellevue Gold (BGL), 2020: Announced a $100m placement at the fixed price of $1, a 10.7% discount to the last close of $1.12, to be followed by a $20 million SPP at the same price with no VWAP pricing alternative. The placement outcome announcement claimed the book was covered "multiple times" and made no commitment to pro-rata allocations. Also no reference to what percentage of stock went to existing holders, which is normal in these announcements. Good participation disclosure in the SPP outcome announcement except for the failure to reveal total applications. The $20 million cap was lifted to $35 million and the scale back policy was based on size of holding based on two thresholds: below 1000 shares got 403 shares and between 1001 shares and 29,999 shares got 78% of their application whilst everyone above 30,000 got the lot. It was a bit unfair to scale back someone with 900 shares to just a $403 allocation but apart from that, the expansion was welcome and scale back policy reasonable.

Bellevue Gold (BGL), 2023: the Perth-based miner was capitalised at $1.26 billion going into a $60 million placement which was priced at $1.05, a hefty 13.2% discount to the previous close of $1.21. Was followed by a $10m SPP for the 11,244 retail shareholders which was only 2.96% of the $337m theoretical maximum amount of applications. Stock was at $1.32 on the closing date so no surprise it was swamped by $59.25m in applications from 3,329 shareholders. Excellent transparency in this outcome announcement revealing the cap had been lifted to $25m with a minimum allocation of 1000 shares for everyone holding up to 3,400 shares, a full allocation for everyone with more than 96,594 shares and a sliding scale in between based on 29.18% of an applicants holding. All up, was a well handled outcome.

Blackmores (BKL): $92 million placement at $72.50, an 8.1% discount to the last close of $78.85, followed by a capped $25m SPP with VWAP pricing based on a 2.5% discount over both the last day and the last 5 days. An unusually long offer period from June 3 until July 3 and then another unusual delay until July 15 for the SPP stock to trade. Largest shareholder Marcus Blackmore didn't participate and was diluted down to around 21.5%. With around 18,000 shareholders, the theoretical maximum for the SPP is $540 million but retail are only being offered 4.63% of this amount and 21.3% of the overall $117 million raising. The placement outcome announcement committed to pro-rata for institutional component with some new shareholders coming in under board discretion based on alignment. Ended up receiving $77m in SPP applications and responded by lifting the cap from $25m to $49m with a pro rata scale back and a $1000 minimum allocation. Good transparency on 25% SPP participation rate.

Challenger (CGF), 2020: A $270 million placement at $4.89, an 8.1% discount to the previous close of $5.32, followed by $30 million SPP with a 2% discount to VWAP pricing alternative. SPP received $40m in applications and board expanded it to $35 million, scaling back $5 million based on size of holdings. VWAP pricing was $4.32, a significant discount to the $4.89 paid by instos in the earlier $270m placement.

Charter Hall Long WALE REIT (CLW), 2020: $60 million placement at $4.87 followed by a $10 million SPP at $4.80 (the discount reflects the missed distribution) which attracted $88.4 million in applications and was expanded to $66.1 million creating the rare situation of an SPP bringing in more cash than the earlier placement. The stock was trading at around $5.20 on the issue date so participants made around $2500 if they applied for the full $30,000. The scale back methodology was a 1-for-1 model so you only received the full $30,000 allocation if you went into the offer owning $30,000 worth of shares. There was no minimum allocation like in many scale backs so if you owned 10 shares you only received 10 more shares. Reasonable disclosure on participation with 4,423 applicants who applied for an average $20,000 each.

Cochlear, 2020: announced a $50 million SPP cap but then lifted this to $220 million after receiving $417 million worth of applications.

Credit Corp, 2019: announced a $10 million cap on its SPP after doing a $125 million placement at $20.45 and then lifted the SPP to $15 million but still only accepted an 39% of each shareholder's $15,000 application. See scale back announcement.

Credit Corp (CCP), 2020: $120 million placement at $12.50 followed by $30 million SPP which received $102 million in applications and was expanded to $35 million. See SPP outcome announcement.

Collection House, 2013: did a $13 million placement and originally announced $6m cap on SPP but lifted this to $7m although it remained heavily scaled back, without disclosure of the total applications.

Crane Group, 2009: $40 million placement at $7.50 and the company announced individuals were limited to $9000 each and $10 million collectively in the follow-up SPP. However, after it received $27 million in applications, the scale back only reduced this to $22.8 million so that everyone received a minimum 200 shares worth $1500 and were then scaled back by 20% of everything above that amount. The offer was expanded by 128%.

Dicker Data (DDR), 2020: $50m placement at $6.70 followed by a $5m SPP which was lifted to $15 million after $53.7 in applications. Scale back was pro rata based on size of holding with a minimum allocation of $1000 worth of shares. See outcome announcement.

Dyesol, 2013: $15,000 SPP at 16.6c seeking up to $2m. Expanded to $4m, heavily oversubscribed but everyone received 18% of application. The most in the money SPP we've ever encountered.

GUD, 2015: $15,000 SPP at $7.45 after $79m placement. Was initially capped at $15m but after $55m in applications they expanded this to $26 million. Scale back formula was unique but punished the smallest holders. See announcement.

Hills Industries, 2009: aimed to raised $10m but after receiving $33.8 million in applications, expanded this to $16.7 million and applied a 50% scale back based on size of application. See announcement.

Invocare, 2019: announced a $65 million placement at $14 with a capped $20 million SPP to follow and ended up accepting $22.8 million of the $29.7 million in applications so that all applicants could receive $10,000 worth of shares. See announcement.

IRESS, 2020: $150m placement at $10.42 followed by a $20m SPP which attracted $42 million, so the board lifted the cap to $25 million and still refunded $17 million or 40.4% of application monies. See SPP outcome announcement.

Kathmandu, 2018: SPP priced at $2.10 when shares were around $2.40. Capped at $8m, accepted $10m and received $NZ14.4m in applications after $NZ 40m institutional placement. Scale back based on share size not application.

Kogan.com (KGN), 2020: $100m placement at $11.45, a 7.5% discount to the previous close, followed by $15m SPP at the same price with no VWAP alternative. Seems opportunistic given the company's cash balance and the recent run up in its share price. The executives were recently issued options at much cheaper prices. Was more than 30% in the money on the closing data so no surprise the offer was flooded with $115m in applications. The board only lifted the cap modestly by $5m to $20m, causing a $95 million refund equivalent to 82% of all applications. The scale back formula was pro-rata based size of holding with no minimum. There was a good table explaining the allocations in the SPP outcome announcement and participation hit 52%, a rare majority, as 6,793 of the 13,015 eligible shareholders applied for SPP shares.

Impedimed (IPD), 2021: $35 million placement at the bizarre price of 15.25c followed by a $30,000 SPP capped at $5 million. After $32 million came through the door from more than 1500 applicants, they only lifted the cap to $7.5 million. The scale back formula was a bit opaque with small shareholders zeroed, a minimum allocation of $1000 and then a pro rata allocation above that.

Impedimed (IPD), 2023: a $20 million placement at 13c followed by a $5 million SPP which they doubled to $10 million after $21 million came through the door. The scale back formula was a bit opaque with small shareholders zeroed, a minimum allocation of $1000 and then a pro rata allocation above that.

Infratil (IFT), 2023: announced an $NZ850 equity raising to held fund its $NZ1.8 billion acquisition of a 49.9% stake in One New Zealand. The raising initially comprised a $NZ750 million placement at $NZ9.20, followed by a non-under-written $NZ100 million retail offer where NZ retail investors were permitted to apply for up to $NZ80,000 worth of stock and Australian shareholders $A45,000. I wrote to the company requesting better transparency and lifting the cap in the retail outcome announcement, which commendably disclosed that it received $NZ320m of SPP applications from 27,983 applicants. The board sensibly expanded the cap by $NZ85m to $NZ185 million but it still returned $NZ135m.

Infratil (IFT), 2024: announced a $NZ1 billion placement and a $NZ150 SPP to fund its push into data centres, when this should have been a PAITREO. The fixed price of $NZ10.15 was a 6.8% discount to the previous close of $NZ10.89. The company received $NZ426m from 37,548 applicants and expanded the SPP by $NZ125m to $NZ275m, meaning it returned $NZ151m. Scale back was pro-rata based on size of holding with no minimum allocation.

Lark Distilling (LRK), August 2024: unveiled an unusual $22.5m raising comprising a $6.5m placement at 85c, a 1.7% discount to the previous close of 86c, plus a $15m conditional placement to certain directors and new major shareholder Seppelts, subject to shareholder approval at an August 30 physical EGM in Melbourne. The follow-on SPP for retail was capped at just $1m but they expanded this to $3.5m after receiving $4.8m in applications from 330 holders. It didn't have or need a VWAP alternative and the scale back was based on size of holding with no minimum allocation.

Lend Lease (LLC), 2020: $950 million placement at $9.80 followed by a $200m SPP. Received applications worth $429.4 million and the board lifted the $200 million cap to $300 million and refunded $129.4 million.

MA Financial Group (MAF), 2022: $30,000 SPP at $7.75 or a 2% discount to the 5 day VWAP. Capped at $10 million following a $100 million placement. Ended up doubling the cap to $20 million but still refunded $25.3 million after $45.3 million came through the door from 2,206 of the 3,379 eligible shareholders. This was a very healthy 65.3% take-up rate, particularly when the offer was only marginally in the money in the closing days.

Megaport, 2020: Unveiled a $50m placement on April 8 2020 at $9.50, an 8.9% discount to the previous close of $10.43. A $30,000 SPP at $9.50 followed which was capped at $15 million. Attracted $99m in applications and board expanded cap by 50% to $22.5 million. See announcement.

Metcash (MTS), Ma4ch 2024: $300m placement at $3.35, an 8% discount to the previous close of $3.64, followed by a $25m SPP. Sent a detailed email lobbying for transparency and fair treatment of retail. Not a bad result as the SPP was expanded from $25m to $60m after $153m came through the door from 9,305 applicants. The scale back was based on size of holding with a minimum allocation of $1000 for all so the smallest shareholders were also looked after.

NAB, 2020: $3 billion placement at $14.15 followed by $500m SPP which was expanded to $1.25 after applications worth $2.9 billion. Pro-rata scale back method based on size of holding but with a minimum allocation of $2500. See outcome announcement.

Newcrest Mining (NCM), 2020: $1 billion placement at $26.50 followed by a $100m SPP which was expanded to $200 million after $300 million came through the door. Scale back formula based on size of holding with no minimum allocation. See outcome announcement.

Perpetual (PPT), 2020: $225 million placement at $30.30, a 9.8% discount to the previous close of $33.61, followed by a $40m SPP at the placement price or a 2% discount to the 5 day VWAP leading into the closing date. Strangely, the placement represents 15.7% of issued capital so Perpetual chose to rely on the special provisions allowing placements of up to 25% against the normal limit of 15%. The placement conclusion announcement did not provide a percentage take-up but committed to pro-rata allocations on a best endeavors basis. Minimum SPP application of $1000. Ended up expanding the SPP cap to $50 million after receiving $68 million in applications.

Pinnacle Investment Management (PNI), December 2024: $400m placement at $20.30, a 5.3% discount to the previous close of $21.44, to fund two acquisitions followed by a $25m SPP at $20.30 with no VWAP alternative pricing. Stock was at $24.25 on December 3 giving it a hefty market cap of $5.28 billion but the SPP should have been more than just 5.9% of a $425 million raise. With 6,618 holders, the theoretical maximum in applications for the SPP is $198.5m. Wrote to CEO Ian Macoun making the case for uncapping the SPP. Stock was more than 10% in the money throughout the offer period so no surprise when it attracted $75.7 million in applications. The board used its discretion to more than double the cap to $50.5 million, reducing the scale back to $25.2 million or just under one-third of total applications. No disclosure of the scale back formula, participation numbers or any minimum allocation. The stock was at $23.78 on December 17, so a paper profit of around $8.66 million or 17% for the participants and nothing but missed opportunity and uncompensated dilution for the majority of retail shareholders who failed to participate.

QBE Insurance, 2014: $15,000 SPP at $10.10 after $650 million placement. Capped at $160m, lifted to $200m but still imposed a heavy scale back based on size of shareholding. Applicants received new shares equivalent to 17% of their holding and 98% of applicants weren't diluted. More than 50,000 shareholders applied so this means around 100,000 didn't and they were all diluted.

Ramsay Healthcare (RHC), 2020: $1.2 billion institutional placement followed by a $200 million SPP which received $695 million in applications and was expanded to $300 million with scale back based on size of holding with a minimum allocation of $560. See outcome announcement.

RCR Tomlinson, 2017: completed a $75m placement then announced $15m cap on SPP but lifted this marginally to $15.6m after receiving $17.6m in applications.

Salt Lake Potash (SO4), 2021: completed a $52m placement at 40c, a 21% discount to the previous close, and followed up with a $30,000 SPP capped at $5 million. Received $10 million worth of applications so the $5 million cap was lifted to $8 million and the scale back was based on 83% of your application.

Strike Energy, (STX), 2021: Launched an $80 million capital raising at a 20% discount of 30c to advance its WA gas project, comprising a $75 million placement and a $5 million SPP, which didn't have a VWAP alternative. Closed it early on May 3 after $30 million came through the door in 7 days from 1500 applicants and then they doubled it to $10 million with a scale back model based on size of application so those who applied for $30,000 got a $10,000 allocation.

Syrah Resources (SYR), 2021: A $56 million placement at 90c followed by $30,000 SPP capped at $12 million. With the stock at $1.20, not surprising that $63.7 million came through the door. They increased the cap to $18 million and all applicants received 28.26% of what they applied for.

The Reject Shop, 2013: $15,000 SPP at fixed price of $16.20 after $30 million placement to fund store rollout. Offer document mentioned $10 million cap but after $25.5 million in applications this was expanded by 40% to $14 million.

Treasury Group (TRG), 2015: raised $30m in a placement at $10.25 then launched a $5m SPP which was doubled to $10m after 2156 applicants applied for $27m worth of stock. Scale back based on size of application with everyone getting 37% of what they applied for. See outcome announcement.

United Malt (UMG), 2020: $140 million placement at $3.80 followed by a $25 million SPP. Ended up receiving $62.9 million in applications and lifted the cap to $30.6 million imposing a scale back model based on size of holding but with a minimum allocation of 264 shares costing $1003. See SPP outcome announcement.

Western Areas, 2014: announced a $15 million cap on a 2014 SPP but then ended up lifting it by 18% by accepting $17.7m of $18.8m in application after representations from ASA and an administrative error.

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