Maybe Ferguson is waiting to see what happens on the SP...and then..........
Meanwhile................
frith............
"Goodman strategy
GOODMAN Group has undoubtedly succeeded in strengthening its balance sheet through the $1.8 billion equity raising, which will reduce gearing from 47.9 per cent to 26.7 per cent, and the extension of $4.1bn of existing debt facilities, along with improved covenants over all of its debt. Moreover, it has secured new strategic relationships with an issue of $500 million of hybrid convertible debt to China Investment Corp (CIC) and a $200m joint venture with Canada Pension Plan Investment Board to invest in China.
But it comes at a cost, as the raisings are highly dilutive to holders who don't participate.
Goodman at present has 2.779 billion securities on issue. That will double through a $1.1bn 1-for-1 accelerated non-renounceable offer at 40c a share -- a discount of 18 per cent on the previous closing price. A further 417 million securities will be issued through a $167m institutional placement, also at 40c a security.
Both issues are underwritten by Macquarie Capital and RBS.
The hybrids are exchangeable in three tranches -- $225m at 43c (523 million securities) by October 31, $150m at 44c (340 million securities) by June 30, 2010, and $125m at 45c (277 million securities) by December 31, 2010.
The issue of the hybrids is subject to securityholder approval. Goodman is also yet to seek approval for the issue of about 670 million two-year options, exercisable at 40c a security, to Macquarie (393 million) and CIC (276 million) in connection with short debt facilities of $485m provided by that duo.
The securities on issue would swell to 5.9 billion after the placement and entitlement offer, and to 7.8 billion assuming exercise of the options and conversion of the hybrids.
Goodman is silent as to whether the family interests of the chief executive Greg Goodman, which own about 3 per cent of the group, propose to take up their entitlement.
However, the directors do say that the group is investigating a potential asset for equity swap with the Goodman family in relation to a "significant and strategically located" property in Moorabbin, Melbourne, which would help to reduce the dilutionary impact to the family of the placement, options and hybrids.
Of course, any such proposal would also require securityholder approval and an independent expert's report.
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