A vote of confidence from investors for Computershare’s $982 million expansion in the US.
The shares closed down 0.2% at $14.96 after the company came out of a trading halt that saw it raise $500 million of the total cost of buying Wells Fargo’s Corporate Trust business in the US.
The shares had earlier bounced 3% to a high of $15.31 but selling (more than 2.4 million shares were traded) saw the price ease as some investors who took up their entitlements crystalised end of month and quarter profits by selling off some of their holdings to boost performance.
The US purchase, when complete will make Computershare the 4th player in this arcane but necessary part of American financial services. Corporate trust companies are essential a safe pair of hands for holding funds and key assets in deal that have to be kept separate while a deal completes.
Computershare will now raise a further $335 million from retail investors in the 1 for 8.8 shares held offer after a 94% take up by eligible investors.
The institutional bookbuild was cleared at $15.05 a share, indicating stronger than expected demand with some big investors wanting more stock.
The issue is priced at $13.55, so the gain to more than $15 a share puts those who financed the first tranche well and truly in the money. The market is now well above the theoretical rights price of $14.84
Computershare’s CEO Stuart Irving said, “We are pleased with the support we have received from our institutional shareholders. We believe this acquisition creates compelling value for shareholders as CTS provides scale with a top four market position, a platform for ongoing growth, an experienced team and increased leverage to long term debt and securitisation growth trends.”
Eligible institutional shareholders who elected not to take up their entitlements and certain ineligible institutional shareholders will receive A$1.50 for each entitlement sold through the Institutional Shortfall Bookbuild. This payment is expected to be made on or around Thursday, 8 April 2021.
The Retail Entitlement Offer will open on Wednesday, March 31 and close sat 5:00pm (Melbourne time) Monday, April 19 2021.
