Brexit may be battering markets and investor confidence, but it hasn’t stopped three Australian companies from risking going to the market for close to $2 billion to help fund major expansion plans here and offshore.
Vocus Communications yesterday became the third company in two days to go to shareholders to help fund a major deal.
In all the trio will ask their investors for over $1.8 billion to help finance these expansion moves here or offshore.
Mayne Pharma revealed plans on Tuesday for a massive issue to finance a potentially company changing move into the US, while self storage group National Storage is looking for more than a quarter of a billion dollars to expand dramartically in Australia.
Vocus Communications is seeking to raise $650 million to buy Ontario Teachers Pension Plan and CIMIC Group’s cables and data centre owner NextGen Networks.
Vocus will pay $700 million for the NextGen acquisition with additional amounts for two extra projects. The total consideration announced by the company is $807 million.
The deal will be funded via a fully underwritten equity capital raising, comprising of $452 million, an institutional placement of $200 million, and existing debt facilities.
Vocus, whose shares are in a trading halt, said it expects the acquisitions to be completed in about three months, subject to approval from Australia’s competition watchdog the ACCC.
Vocus plans to raise $452 million in a 1-for-8.90 accelerated renounceable entitlement offer with retail rights trading and an institutional placement of about 26.5 million new shares which will amount to $200 million. The institutional offer closes on Thursday and will be followed by a bookbuild on Friday.
The offer price under the entitlement offer is $7.55 per share, a 10.4% discount to the theoretical ex-rights price of $8.42. The stock last traded at $8.52.
Mayne said on Tuesday it will raise $601 million in a 1-for-1.725 rights issue and a share placement of $287 million to fund the acquisition.
Also on Tuesday National Storage REIT revealed plans to buy the Southern Cross portfolio of 26 storage facilities, which it manages and partly owns through a joint venture with Heitman, in a $285 million deal.
The transaction will be funded through debt and a $260 million capital raising at $1.58 a security. The raising comprises a three-for-10 entitlement offer that will generate $159.5 million and a placement with big institutional investors for another $100.5 million.
