Hardly a resounding vote of confidence from the small shareholders in West Australian Newspapers ahead of their company’s planned $4.1 billion marriage to the Seven Media Group (SMG) as part of the grand reshuffle plan of the major shareholder, Kerry Stokes.
West Australian (WAN) told the market yesterday that just 14% of the $328 million retail offering component of a $653 million raising had been completed.
That’s around 4,300 of the company’s 27,000 shareholders who put money up for the issue
WAN said in the statement that about $47 million of the $328 million retail offer of Convertible Unsecured Loan Securities (or CULS) were issued to small shareholders at $5.20 per share as volatile market conditions saw its shares trade close to or below the offer price.
West Australian Newspapers shares were off 5c at $5.24.
WAN said the retail and institutional offers were fully underwritten and the amount to be raised remained at $653 million.
"The remaining CULS of approximately 54 million will be allotted under the terms of the underwriting agreement to the Company’s underwriters and sub-underwriters," WAN said in yesterday’s statement.
Settlement of the retail offer is scheduled for Monday.
Shareholders are due to vote on the company’s takeover of Seven Media Group in Perth on April 11.
"The major shareholders of SMG, Seven Group Holdings Limited (SGH) and funds affiliated with Kohlberg Kravis and Roberts & Co. L.P. (KKR), SMG Management and mezzanine investors have agreed to subscribe for new shares in WAN at $5.99 each as part of the consideration for their respective interests in SMG, a 15% premium to the $5.20 per security WAN shareholders have paid under the Entitlements Offer.
"The application period for the fully underwritten Public Offer of fully paid ordinary shares in WAN to raise approximately $40 million at $5.20 per new share is open to investors resident in Australia and New Zealand and otherwise eligible under all applicable securities laws to receive the Public Offer. "
It was about what WAN expected given the events of the past 10 days in financial markets and the complexities of the whole deal.
The $40 million allocated to retail investors from the share issue looks about right weight.
