A sense of action around drilling contractor Ausdrill which yesterday asked big shareholders for nearly $150 million a day after former Leighton Holdings boss Wal King popped up as a director (his first new board seat).
Ausdrill told the ASX yesterday that it will seek to place 37 million shares at $3.50 each with institutional and sophisticated investors to raise $129.5 million, representing a 9% discount to Tuesday’s $3.85 close.
Ausdrill will then raise an additional $20 million from retail shareholders under a share purchase plan.
The company said the new capital would be used to pay for plant and equipment for new projects, fund the expansion of Ausdrill’s underground business joint venture and to mount takeovers if the opportunity arose.
And that (along with the new board member) got the market chattering that Ausdrill could be interested in buying Leighton out of its holding in fellow contractor, Macmahon Holdings.
Leighton owns around 20% of Macmahon, which is worth about $80 million based on the current share price of 56c, compared with the $1.20 that Leighton paid when it first raided Macmahon back in 2007.
Leighton’s new CEO David Stewart (who replaced Wal King) has said that as part of a strategic review it would look at its various investments, such as the stake in Macmahon and Brisbane property group Devine.
Devine wouldn’t be of interest to Ausdrill, but with Wal King on the board Macmahon might be, or so the market thinking went.
Macmahon’s share price has been under pressure recently after a big contract in the BHP expansion of its iron ore operations in the Pilbara went bad with cost overruns.
But that’s media speculation; there was no hint whatsoever of any interest in any company in Ausdrill’s statement yesterday.
"Ausdrill’s business has experienced strong growth in recent years and, assuming continued strength in the resources sector, Ausdrill anticipates a high level of tender activity in the next 12 months," the company said in the statement.
"This means that eligible Ausdrill shareholders who do not take up their entitlement to participate in the SPP will not be able to transfer or receive any value for those entitlements.
"The Capital Raising will not require shareholder approval.
"However, Ausdrill may seek shareholder approval in the future to ratify the issue of Shares under the Placement so as to reinstate its capacity to issue Shares pursuant to the ASX Listing Rules."
And Southern Cross Media Group plans to sell $471 million in new shares after reaching the 90% acceptance level for the takeover of Austereo Group.
Southern Cross said yesterday it will pay Austereo shareholders an additional 10c a share in cash after reaching the 90% and proceed with compulsory acquisition of the remaining shares.
The company now will raise equity in an underwritten 6-for-7 accelerated renounceable entitlement offer at $1.45 per new share, representing a 16% discount to Tuesday’s closing share price of $1.73, the last trading level.
Southern Cross shares went into a trading halt yesterday to allow the institutional component of the equity raising to take place.
The proceeds of the equity raising would be used to repay the bridging facility which provided part of the funding of the Austereo takeover.
Southern Cross said Macquarie Group Ltd, its largest shareholder with 25.5% of the company, had committed to take up its entitlement in full.
Southern Cross shares are down 23% from the $2.27 level they were trading in late January before the bid for Austereo was launched.
