EBOS fires up bumper rights issue at 12pc discount for Greencross buy

afr.com:

It’s down to the short strokes at ASX-listed pharma distributor EBOS’s tilt for TPG Capital-backed pets and vets business Greencross, details of which were first revealed by this column last week.

A Greencross vets location in Victoria. Simon Schluter

Street Talk understands the two camps were thrashing out the final details on Tuesday evening. Sources said they were expected to work late into the night, with the goal of having the deal signed and sealed within the next 24 hours – in line with the extended trading halt.

From there, it would be off to the races for the mooted equity raising.

Fund manager sources said EBOS has been building support for a $2 billion equity raising, a big chunk of which is expected to be structured as a rights issue and pegged at a 12 per cent discount to the TERP. They were being told EBOS would pay in both scrip and cash to buy out all Greencross shareholders, including TPG Capital, AustralianSuper, and Canada’s HOPP. However, the scrip component would mean the trio would likely end up as shareholders in EBOS.

EBOS’s largest investor, Zuellig, was understood to be supportive of its big M&A bet and would tip into the rights issue.

It is being advised by Macquarie Capital’s David Mustow, while Lazard Australia and UBS have also been in its tent. Greencross’s owners have been working with Jefferies’s Michael Stock.

The raise comes five days after Street Talk revealed EBOS was closing in on a deal to buy Greencross – last valued at $3.5 billion when AustralianSuper and Canada’s HOPP acquired a 45 per cent stake from TPG Capital early last year. The PE firm plucked Greencross off the ASX boards in early 2019 for $675 million equity value.

Greencross lists 150 veterinary clinic locations on its