a) It is not clearly disclosed whether the institutions who participated in the placement at 25c are also entitled to the 3:4 offer on those shares. It would appear the timing of the offer is specifically set up to allow instituions to douple dip. (hence the extra few days between the trading halt on the record date, which leaves it open for trading for 2 days) If this is so, then the placement is really 75% larger than disclosed and really at 22.9c?
b)The offer does not appear to allow retail shareholders to apply for more than the 3:4 entitlement. In a non-renounceable offer the company normally allows retail shareholders to purchase the shares that are not taken up. This is particularly important in this offer because they allowed the institutions to buy extra shares in the placement. Devine appears to be happier to pay an underwriter to take the shares and sell them to institutions, instead of allowing their retail shareholders to purchase them? They are forcing the dilution of every retail shareholder even if they take up all of their entitlement.
The whole offer smells bad to me. Such a massive discount, focused on looking after the institutions and forcing the significant dilution of every retail shareholder.
----------------------- I am not an advisor. This is for debate only.
DVN Price at posting:
27.7¢ Sentiment: None Disclosure: Held
