The Commonwealth Bank (CBA) finished its $5.1 billion capital raising yesterday, but over half a million small shareholders said no thanks and took $2 a share for their trouble.
That almost certainly means the big banks won’t return to tap small shareholders for quite a while. They are full up with bank shares.
CBA shares lost 0.7% to $74.54 after being down close to 2% early on as investors digested the news of the completion of the offer.
CBA 1Y – CBA completes $5.1bn raising
The raising was priced at 1 new share for every 23 shares at $71.50 each.
Retail investors didn’t take up all their allocations but the bank then offered the remaining 21 million shares to both retail and institutional investors.
The more than 500,000 CBA retail shareholders who shunned the offer will only receive $2 for their rights on September 22.
Non-participating institutional investors have already received the much better $6.50 per share in compensation which was paid on August 25.
No wonder small shareholders were divided. This issue will probably mark the end of market raisings for the banks for a while.
The big four will keep their dividend reinvestment programs going and will fiddle the discount and the underwriting to make it more and less attractive to retail shareholders.
So far Westpac has raised more than $400 million selling down its stake in BT Investment management, looked to raise $2 billion from the dividend reinvestment plan, raised a further $750 million in a hybrid note issue, the ANZ did a $3 billion issue of equity and the NAB has completed a $5.5 billion raising, the biggest in Australian corporate history, to partly back the float of its troubled UK banks. That’s close to $15 billion all up.
