Friday 25th October 2019
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Serko shares jumped 29 percent when trading resumed after institutional investors clamoured to buy into the travel management software developer after it emerged booking.com's owner was backing the firm.
The shares rose 98 cents to $4.40 with 4.5 million shares traded at 3pm, well up on its 37,000 daily average over the past three months.
Serko sold $40 million of new shares at $4.04 apiece, and shareholders including chief executive Darrin Grafton and chair Simon Botherway sold a further $16 million into the placement, which was oversubscribed and subject to scaling. That included Booking Holdings buying a 4.7 percent stake for $17.5 million. Booking would also help offer and promote Serko's Zeno travel management platform.
A share purchase plan will be offered to existing shareholders to raise a further $5 million, at either the placement price or the five-day volume-weighted average price, whichever is lower. Serko said it thought the plan would cater to the majority of non-institutional investors.
Harbour Asset Management - which had a 9.2 percent stake - participated in the placement. Shane Solly, a portfolio manager at Harbour, said the placement would give Serko more bandwidth to pursue growth, with booking.com also providing additional support.
"The business continues to execute really well. There's plenty of opportunities for them to keep growing so they do need to focus on that," he said.
Harbour wasn't bothered by Grafton and Botherway selling down, because both retained meaningful stakes and Solly viewed the placement as broadening the investor base.
The shares rose today from a five-month low but had been as high as $4.62 in September.
Separately, Wellington Drive Technologies announced a small capital raising, just days after reporting a nine-month profit and raising annual earnings guidance.
The company said it would raise $5.3 million in a one-for-five pro rata rights issue at 10 cents a share, a discount to the 19 cents the share traded at yesterday.
Wellington Drive's shift into offering 'internet of things' management tools alongside a new generation of energy-efficient refrigeration motors has helped the company improve margins and grow revenues, something it had struggled to do in the past.
"With continually improving operating performance and an exciting funnel of growth opportunities the board believes now is the right time to increase the company’s growth investment," capital committee chair Gottfried Pausch said in a statement.
The funds would be used for a new IoT application, new products, expanding the firm's sales and technical capabilities, and to repay expensive debt. The issue is 100 percent committed with either underwrite agreements or pro-rata rights commitments, the company said.
Wellington Drive's shares fell 9 percent to 17.3 cents, well above the rights price.
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