Sharechat Logo

Moa plans $3 million rights offer to fund Savor Group purchase

Friday 22nd February 2019

Text too small?

Unprofitable brewer Moa Group plans to raise up to $3 million through a rights issue to help fund its acquisition of bar and restaurant owner Savor Group if the deal is approved by shareholders at a special meeting next month. 

Last December Moa announced a conditional agreement to acquire the business it said would add $3.6 million of operating earnings in its first full financial year. 

The conditional agreement is for Moa to pay $13 million up front for Savor Group, of which 60 percent would be in cash and 40 percent in shares. The maximum purchase price, if all contingent elements of the consideration were to become payable, is $21.4 million. 

The deal is to be funded by a mix of bank debt, a private placement and a rights issue, it said. Today it said a $5.5 million bank facility has now been conditionally agreed with Bank of New Zealand, and Moa has received firm commitments for a placement of $3 million, at an issue price of 38 cents per share from a group of private investors. That includes $750,000 from a family trust associated with executive chair Geoff Ross. The rights issue will be at the same price. 

The issue price for the $5 million scrip component of the purchase price will be the 20-day volume weighted average leading up to the transaction. If that matched the 38 cent price in the upcoming placement, it would equate to 13.3 million new Moa shares, or about 15 percent of the enlarged group. 

Moa's shares dropped 2 cents in early trading today, and were recently at 42 cents. Its volume-weighted average price over the past 20 days is almost 46 cents, which would equate to about 11 million shares, or about 13 percent, for Savor's sellers. 

The rights issue will be launched after the company obtains shareholder approval for the purchase at a special meeting on March 12.

The one-for-11 offer will seek to raise $2 million with provision for another $1 million of oversubscriptions, Moa said. It is expected to launch in March. 

Moa says the deal team is working to close out all conditions and it is expected that the deal will become unconditional if shareholders vote to approve the transaction. Settlement is anticipated on April 1. 

Shareholders will also be asked to approve a resolution to elect Savor founder Lucien Law and his business partner Paul Robinson to Moa's board. 

Savor owns a collection of bars and restaurants in Auckland. It has also just opened three eateries and a bar in the new Auckland Fish Market. According to Moa, the group's new venues are meeting expectations. 

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report