Last time GGP did an entitlement issue (Feb 2011), the share price was also well above the issue price at the time of shortfall allocations. Novus Capital, the underwriter, took most of the shortfall and profited from the favourable price while existing GGP shareholders were given only 20.69% of what they applied for. It made my blood boil at the time. Unfortunately GGP have used Novus again. Will we get dudded again? In entitlement issues I have participated in with other companies, shortfall is generally allocated first to the shareholders who applied for additional shares, and then to the underwriter if any are left. We will find out in the next few days but the way we are treated will heavily influence my view of our board - I am sick and tired of being diluted by placements and when they finally give us existing shareholders a chance to participate in a capital raising, I expect them to treat us fairly.
GGP Price at posting:
2.1¢ Sentiment: LT Buy Disclosure: Held
