Orora’s $1.35b raise gets insto support despite big discount

afr.com:

Can and bottle maker Orora’s $1.35 billion equity raising to buy France’s Saverglass had been expected since August 27, but it still managed to make fund managers uneasy when it finally kicked off on Tuesday morning.

Saverglass makes a range of specialist glass bottles for premium spirits and wine groups. 

At a 21.3 per cent discount to the last close – and with $895 million of the equity raise structured as a non-renounceable entitlement offer – Orora’s existing investors knew they had little choice but to find the cash and tip in or cop big dilution.

Of course Orora’s brokers Citi and Macquarie knew it was a big deal and would need all support they could get. By 10am, they were telling fund managers five institutional investors had bid for $450 million worth of stock before launch. It included a mix of existing and new investors, who remained unnamed.

Also called to the scene was mid-tier stockbroker Bell Potter, which was collecting bids on behalf of the joint lead managers. Its slice of the book shut at 2:45pm, ahead of the 5pm close scheduled for the Asia Pacific investors.

The raise will be 59 percent of Orora’s current size. Goes without saying it’s a big bite. Fund managers reckoned it has paid a fair multiple, but were struggling to see hockey stick growth. They reckoned Orora should trade above the $2.70 offer price and would stay under the TERP.

There’s still the overseas bids to go until 5am Wednesday, which would be followed by a retail rights issue.