If it trades through the offer price then I expect take up to be quite limited, which I believe will result in management placing the leftover shares to a few large holders and still raising the capital.
Firstly if there are a few large holders who were always interested they would have just done a sophisticated invesotr issue as it's a lot cheaper and quicker to do and it's guaranteed. Secondly, they didn't underwrite the issue because they were confident of getting the placement done or there was no-one willing to underwrite the placement.
We're here now so it's in the company's interest to try and ensure there is maximum uptake of this rights issue. I'm still expecting an announcement of some description on the 4th cohort soon, but for the purpose of sustaining the share price for a successful rights issue, not to push the share price to the moon.
What happens after that will be interesting. I suspect it is once shares are tradeable that will be when the shares move from the weak to the strong.
PAB Price at posting:
5.6¢ Sentiment: None Disclosure: Held
