I wonder if the directors are hedging their bets to see where...

I wonder if the directors are hedging their bets to see where the share price settles once the institutional placement is completed and any ‘quick flick’ sales are out of the way.. If the share price is comfortably above $27.50, my inkling is they well go ahead and raise the additional cash while they can, otherwise it’s a bit of hassle to go through with a SPP and raise very little.

As the $200m being sought is well in excess of the initial $105m purchase price for the Pacific Indemnity shareholding and is providing headroom for FY25 acquisitions, it’s not like there is any immediate need for up to an additional $25m under a SPP. additional shares will presumably depress EPS in the short term while it sits on deposit or reduces debt.

So should the underwritten amount be split between an institutional placement and a SPP? Maybe yes, but probably a more expensive underwrite given the longer period that an underwriter is exposed to market volatility. Although as the last $95m not needed immediately, they could of chosen to underwrite a lesser amount under the institutional placement and take a risk on the amount raised under a SPP.