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Arvida gets 87% uptake in $92 mln rights offer

Wednesday 17th July 2019

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Arvida Group attracted about 86.5 percent uptake in an underwritten offer to existing investors and will now hold a shortfall bookbuild to bridge the difference.

The retirement home operator said it raised about $79.3 million of the $92 million it sought in a one-for-5.7 renounceable rights issue at $1.15 per share in June. The shares last traded at $1.37 and have lifted 9 percent so far this year.

The funds are to help pay for its $180 million purchase of a new portfolio of villages, tipped to be immediately accretive to underlying earnings per share. Arvida is taking on more debt and raised $50 million at $1.25 in a placement to help pay for the deal. 

Arvida today said approximately 69 million of the rights were taken up and shares are expected to be allotted on July 22. 

About 10.8 million shares are available for a shortfall bookbuild to be conducted by Forsyth Barr and Jarden Securities as joint lead managers, it said. The bookbuild will be held today.

Shareholders who did not take up their full entitlements in the rights offer will receive a pro-rata share of any positive difference between the shortfall bookbuild price and the application price for new shares.

The new portfolio of villages includes Bethlehem Country Club and Bethlehem Shores in Tauranga and the Queenstown Country Club.

Arvida said - based on its estimates of earnings - the acquisitions will add $15.8 million of underlying profit on a pro forma basis in the 2020 financial year and $19.4 million the following year.



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