Transurban shares fell yesterday when they relisted after the controversial share issue to help fund the Lane Cove Tunnel purchase, but they then recovered much of the ground lost in early trading.
In fact for the country’s biggest toll road operator, the rebound, on the back of a wider market, went some way to vindicating the board’s opposition to the renewed attempts by two Canadian shareholders, assisted by a big local holder.
The shares fell to a low of $4.62, 2c above the issue price for around $410 million of equity, from the previous close last Friday of $4.92.
That was the biggest fall for the stock in a year.
But they soon made up those losses and ended at $4.87, down only 7c on the day and a small gain for those institutions which took up the offer.
"Transurban is pleased to announce the successful completion of the institutional component ("Institutional Entitlement Offer") of its $542.3 million accelerated renounceable 1 for 11 pro rata entitlement offer ("Offer"). The Offer was announced on 10 May 2010 and is fully underwritten," the company said.
"The Institutional Entitlement Offer will raise gross proceeds of approximately $410 million at $4.60 per stapled security, which will result in the issue of approximately 89 million new Transurban stapled securities
"Approximately 60 million securities were available for sale under the institutional bookbuild as a result of renunciations and securities relating to ineligible Institutional Security Holders.
"The institutional bookbuild was well supported by both new and existing institutional investors, achieving a clearing price of $4.60.
"This clearing price was equal to the Offer Price. Therefore, institutional security holders who elected not to take up their entitlements and ineligible institutional security holders will not receive any consideration for each new security not taken up."
Seeing the two big Canadian holders and their local associate, didn’t take up their offers, they also missed out on any small bonuses of a difference between the issue price and the price from the book build.
Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan and Sydney-based asset manager CP2 Ltd pitched two variations of the offer (really two different offers, one with the equity issue halted priced at $5.57 a share, the other, including allowing the issue to go ahead, priced at $5.32 a share).
Both were rejected as being inadequate.
The three funds, which owned a combined 42.4% of the company reportedly, had been preparing to make a new offer above the $5.25 a security rejected last November when Transurban revealed the proposed Lane Cove Tunnel purchase and issue to shareholders to fund it.
The trio objected to the issue being made as it would water down their holdings to around a combined 38%, and they also questioned why the purchase hadn’t been made by raising debt, ignoring the trend away from debt-funded purchases in these stocks in the past two years.
Transurban traded at just under $4.40 last November, before the first approach from the two Canadian groups.
