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Downer raises A$757 million from institutional entitlement offer

Friday 24th March 2017

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Sydney-based Downer EDI said it raised around A$757 million from its institutional entitlement offer, with approximately 66 percent of entitlements being taken up by eligible institutional shareholders.

Earlier this week, it launched a A$1.26 billion takeover bid for ASX-listed outsourced laundry and cleaning services firm Spotless Group as the Australian-based infrastructure and mining firm looks to expand its operations as a vertically integrated services provider. Downer is offering A$1.15 a share to Spotless shareholders, a 59 percent premium to the 72.5 Australian cents price the stock traded at before the announcement.

At the time, Downer said it was looking to raise A$1.01 billion in an underwritten rights issue at A$5.95 a share to help fund the acquisition, with the balance from existing debt facilities.

Downer chief executive Grant Fenn said today that arrangements are in place to fully fund the takeover offer. 

“Downer has the team with the right experience and capabilities to manage Spotless,” he said. “We have generated significant value in Downer over the past few years and we intend to do the same with Spotless.” 

The approximately 44 million entitlements not taken up by eligible and ineligible institutional shareholders were offered for sale in the institutional bookbuild, which was conducted March 22 and 23.  "As the institutional bookbuild did not clear the entitlement offer price of A$5.95 there will be no proceeds available for distribution," it said. 

The retail component of the entitlement offer is expected to raise about A$254 million. Eligible retail shareholders will be invited to participate in the retail entitlement offer at the same offer price and offer ratio as the institutional entitlement offer, it said. The offer will open at 9am Sydney time on March 30 and close at 5pm Sydney time on April 11.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


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