Macquarie Bank has raised $750 million from a placement to the professional end of the market and is looking to tap smaller shareholders for up $348 million.
If all the shares are taken up by smaller shareholders, Macquarie will have raised more than a billion dollars in fresh capital.
The bank said yesterday it sold 8.6 million shares to professional investors at $87 apiece and judging from demand, it could have sold many more.
The stock traded strongly yesterday after the placement was bedded down and the shares came out of a trading halt.
MBL shares rose sharply, hitting a high of $92.42, up $2.92 on the day and giving those in the placement a tidy profit.
They closed at $92.20, up $2.70 on the day.
This issue was much better supported than a similar one in 2006 which struggled to raise $700 million.
Various brokers upgraded their outlook for MBL although Goldman Sachs JB Were told clients they though the investment bank was fully priced at the moment, based on the 2007 results.
The buyers of the new shares will miss out on the $1.90 per share final dividend declared by the bank on Tuesday. The new shares are due to start trading May 22.
According to a statement from MBL's Chief Financial Officer, Greg Ward, the sale was priced at the "top end'' of a range and was oversubscribed
"We have experienced unprecedented growth across the entire business,'' he said."The capital raising will enable this momentum to be maintained.''
The transaction adds to the $700 million of capital raised from professional investors a year ago at $66 a share. More than 10 million shares were issued a year ago in that raising.
MBL is looking to get around half the professional fund raising from existing shareholders.
In a statement issued yesterday the bank said:
The purpose of the SPP is to provide eligible shareholders with the opportunity to invest in Bank shares at the institutional issue price under the Placement, without brokerage or other transaction costs.
The additional capital raised under the institutional placement and the SPP will be used to facilitate the continued strong growth in all regions and across all businesses within the Bank, especially internationally.
The principal terms of the SPP are:
(a) Eligible shareholders may choose from two levels of participation: 57 shares at a cost of $A4,959; or 28 shares at a cost of A$2,436.
(b) Registered holders of fully paid ordinary shares of Macquarie at 7:00 pm (Sydney time) on 15 May 2007 with a registered address in either Australia or New Zealand will be eligible to participate in the SPP.
(c) If a shareholder is expressly recorded in the register as holding shares on account of another person then that person will be treated as an eligible shareholder for the purposes of the SPP and may make an application through the shareholder to participate in the SPP.
Otherwise, for regulatory reasons, the level of participation for trustee and nominee shareholders will be capped at the level of participation open to individual shareholders.
(d) For regulatory reasons, the SPP will be open only to residents of Australia and New Zealand. This restriction will apply at the beneficial holder level.
• The maximum number of shares that may be issued under the SPP is estimated to be 4,001,400 (based on the maximum number of shares that may be acquired per eligible shareholder and the estimated number of eligible shareholders).
• The Bank will not seek shareholder approval for the issue of shares under the SPP.
Full details of the SPP, including the terms and conditions of the SPP offer and an application form, will be sent to eligible shareholders on or around Wednesday, 23 May 2007. Eligible shareholders are encouraged to read this information before applying to participate in the SPP.
The closing date for applications is expected to be Friday, 15 June 2007. The SPP offer will be non-renounceable and shares issued under the SPP are expected to be allotted on or around Friday, 22 June 2007.
