'slimdeucer' you may find this of interest in relation to your...

'slimdeucer' you may find this of interest in relation to your post.

Calculating the diluting effect of BGA's 2020 Retail Entitlement Offer (REO) on Share Price it's hard to see any logical reason why this REO by itself should cause the share price to move much at all.

To move the Share Price substantially would require the issue of a much larger number of shares.

Assuming the REO is fully subscribed ($117m) at $4.60 per share. This will result in issue of approximately:$117,000,000 ÷ $4.60 = 25,400,000 new BGA shares ('REO Shares No')

Prior to REO:

a. Market Cap. from ASX for 08 Dec. '20 was:$1.470 billion or $1,470,000,000

b. Closing Price 08 Dec. was $5.30

c. Approximate No. of shares (a÷b) = 277,360,000(Note Hot Copper has a somewhat different figure for BGA's Market Cap. but using HC's figures should provide a fairly similar end result.

After a fully subscribed REO of $117m:

A. New Market Cap (a + $117m) = $1,470,000,000 + $117,000,000= $1,587,000,000

C. New No. of shares = c + 'REO Shares No'= 277,360,000 + 25,400,000= 302,760,000

D. New theoretical value per share, after the 'dilution' due to the REO (A÷C) = $1,587,000,000 ÷ 302,760,000= $5.24 / share

This is a decline of $0.06 per share from $5.30 to $5.24. You can be fairly confident the 'smart money' already has this priced into their share valuations on the assumption that the REO will be fully subscribed.

The lowering of share price resulting from the discounted offer price of this REO by itself shouldn't drop the share price to anywhere near $4.60. Other factors affecting the share price are likely to outweigh this small effect.

This calculation does not include the effects of the already completed Institutional Placement and Institutional Entitlement Offer.

(Care has been taken but no responsibility will be taken for any errors, omissions etc. Ensure you do your own calculations & research)

GB