Shareholders Association to reconsider Wynyard rights issue

Thursday 28th January 2016

The Shareholders Association says it is reconsidering its view on a rights issue by the security software company, Wynyard Group, after management said it wanted the flexibility to offer new shares to investors at less than the $2.00 a share minimum for which it had earlier sought approval. The company is blaming volatility in global equity markets.

At a meeting in December, shareholders backed the issue of up to 15 million shares at a minimum of $2.00 a share, a slight premium on the $1.97 trading price at that time, but well above the $1.38 the shares had traded at when the meeting was first announced in November. In chief executive Craig Richardson's notes to the meeting, published to the NZX, the company argued it was undervalued due to thin trading compared to other comparable stocks and the company believed there was demand at this price level, despite the volatility in global capital markets.

Chief financial officer Murray Page told BusinessDesk there were investors who were still interested at $2.00 a share, but the board wanted flexibility in order to raise the capital.

Wynyard is now seeking shareholder approval to ratify the share placement it conducted in June 2015, when it raised $45 million. That would allow it to issue more shares without the $2.00 minimum price restriction. Details of the meeting are due to be sent to shareholders next week.

The chairman of the Shareholders Association, John Hawkins, had expressed concerns about the planned rights issue at the December meeting. He said the association would now consider its next move carefully. "At the meeting, the Shareholders Association reiterated that it strongly favoured renounceable rights issues, which are fairer to all shareholders. It accepted that forming strategic alliances via new overseas shareholders may be advantageous at the pricing level management said it was confident it would achieve, i.e., over $2. Following the notice today, the association will reconsider its view”.

The shares last traded at $2.00 in February last year and a short while ago traded at $1.70, down 0.6%.

BusinessDesk.co.nz

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