Westfield Group shares survived the first day of trading since announcing its mammoth $3 billion share issue last week in not too bad a shape.
The stapled securities only fell 53c to $20.30 after the trading halt was lifted at the company's request yesterday in the wake of the successful placement of 117 million shares with big institutional holders at $19.60 a share.
The price fell simply because for the next month investors can get WDC shares cheaper through the equity raising than on market.
But some institutions will have a vested interest in holding the shares well above the $20 mark in the run up to the end of the financial year. ASX trading ends on June 29 and big holders won't want to see a WDC share price that falls under the $19.60 in the instos offer, at least until early July.
If it does it may hurt some of their June and financial year (and June quarter) performance.
Westfield revealed the issue a week ago last Monday. It said the $3 billion raised will fund its development program here and in the US and Europe for the next five years.
That includes a planned $10 billion in projects over the next three years in Australia, New Zealand, the United States and the United Kingdom.
But analysts say the capital will help the retail property giant underwrite solid returns for the next five years to investors.
It's also a signal that the smartest property players in retailing believe it is better to raise a lot of capital now than down the track. World bond yields have become much more volatile this month, perhaps pointing to more expensive loan funds in the next year or two.
Westfield said yesterday that the offer closed on June 14, 2007, with almost 83 per cent of eligible institutional security holders agreeing to accept the offer.
Westfield said the entitlements of those Eligible Institutional Security Holders (as well as Ineligible Institutional Security Holders) in respect of which the Institutional Offer lapsed on June 14, 2007 were placed in an institutional bookbuild on the following day.
The Institutional Bookbuild, which was conducted by Credit Suisse (Australia)as Global co-ordinator and joint lead manager and JP Morgan Australia's joint lead manager, achieved a price of $19.60 per New Security.
The allotment of approximately 117.2 million New Securities, including New Securities to be allotted under the Institutional Offer, is expected to occur on July 5, 2007.
The retail offer will close on July 6, 2007, with a retail bookbuild expected to occur on July 12, 2007.
