Bega swamped by share buyer interest

28 Jun, 2017 10:06 AM
Comments
0
 
Barry Irvin: I’m delighted with the strong support we received for the placement from existing and new institutions.
Bega Cheese launched its capital raising late last week to help shore up it capital base.
Barry Irvin: I’m delighted with the strong support we received for the placement from existing and new institutions.

Existing institutional shareholders have rushed in to grab an extra slice of Bega Cheese, blocking new investor hopes of taking part in a $160 million capital raising by the dairy company.

Within a day of Bega announcing it would issue 22.9 million new shares to institutions at $5.35 each, the company’s offer was over-subscribed.

Bega shares were trading on the Australian Securities Exchange for $6.14 early this week.

“Demand from our existing shareholders was so strong most of the new interest could not be accommodated,” said executive chairman, Barry Irvin.

Bega Cheese launched its capital raising late last week to help shore up it capital base, just as it finalises its popular $460m takeover of the Kraft-branded Mondelez grocery business, including the Vegemite range.

Bega wants to prune its debt to equity gearing down to about 30 per cent and “be prepared for any future food and dairy growth opportunities which may arise”.

In addition to the institutional offer, a $37.5m share purchase plan is also opening to all existing shareholders.

Mr Irvin hoped most of Bega’s smaller shareholders would participate when that offer commenced on July 3.

Existing Bega Cheese shareholders can subscribe for up to $15,000 of new shares, subject to scale back, without incurring brokerage or transaction costs.

The issue price of $5.25 is a 10 cent discount to institutional offer and a 10.4pc discount to last week’s five-day weighted average trading price worth $5.8c/share.

“I’m delighted with the strong support we received for the placement from existing and new institutions,” Mr Irvin said.

“The proceeds from the institutional placement and the share purchase plan will improve Bega Cheese’s financial flexibility to take advantage of future growth opportunities in dairy and food as part of our vision to be a great Australian food company.”

Among the institutions showing interest in Bega in recent months has been the Central Bank of Norway (Norges Bank) which had lifted its stake to five per cent before the share offer.

Norges Bank, which invests Norway’s massive oil revenues on behalf of its government, is a frequent investor in Australian agribusiness stocks, including GrainCorp.

Swiss-based investment and financial services giant UBS also recently lifted its stake in Bega Cheese to 5.3pc.

Mr Irvin said 2016-17 had been a significant year for Bega Cheese with its “company-changing” acquisition of the Mondelez business including Vegemite, Kraft peanut butter, salad dressings and cheese lines.

That deal is to be concluded this week.

Bega also recently announced a deal with nutritional powder giant, Mead Johnson, which included selling one of its Tatura spray dryer plants and the new infant formula finishing factory in Melbourne for $200m.

Bega retained a 10-year access and service agreement which secured revenue and income streams from these plants.

The company said it had no current plans to sell the Kraft processing plant at Port Melbourne after it took over the business, despite receiving “numerous approaches” in recent months.

The NSW South Coast-based company has also confirmed a current estimate of full-year earnings before interest tax depreciation and amortisation of about $67.4m.

Page:
1
FarmOnline

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 
The hotter the stack, the more the farmer has stuffed the nutritive value of that stack.22 Sep 17 The hotter the stack, the more the farmer has stuffed the nutritive value of that stack.
If some silage making rules are bent or broken, it can affect the environment.21 Sep 17 If some silage making rules are bent or broken, it can affect the environment.
light grey arrow
At what event was this said ?
light grey arrow
One of the most effective ways to combat the fake markets is to mass serialise the original
light grey arrow
ok then, lets extend it further, anything that is not raw dairy cow/sheep/goat/buffalo milk, is
Dairyfarmers are reminded that chemicals used on farms, including those used to clean and sanitise the plant and milk vats, must be registered with the Australian Pesticides and Veterinary Medicines Authority (APVMA).
20 Sep 17 Dairyfarmers are reminded that chemicals used on farms, including those used to clean and sanitise the plant and...
When Victorian dairyfarmer Lauren Finger's father said he had an idea, little did she know how much of an impact his invention would improve her on-farm productivity and safety.
05 Sep 17 When Victorian dairyfarmer Lauren Finger's father said he had an idea, little did she know how much of an impact his...
Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition opportunities.25 Sep 16 Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition...
Monopoly market may confront cropping sector under mega-merger proposal.22 Sep 16 Monopoly market may confront cropping sector under mega-merger proposal.