Ann: Acquisition of Enoro and $50m equity raising, page-45

This has been an interesting discussion over the past few days! Thanks to all.

Let's review the CR process:
1. Hansen decided they needed $50m
2. Hansen decided that $3.70 per share was reasonable
3. Therefore 13.5m new shares would be required, split as follows:
Retail = 20% = 2.7m shares (x $3.70 = $10m)
Instos = 80% = 10.8m shares (x $3.70 = $40m)

So the first question is whether the 80/20 split is correct. I would think it highly improbable that the actual split is exactly 80/20!! But does the split favour Retail or Instos? My guess (no evidence) is that Retail owns less than 20% of Hansen shares and hence the $10m to Retail is higher than it should be.

The second question, assuming the 80/20% is indeed correct, is whether Retail should be concerned how the Instos allocate their 80% of shares between 'existing' and 'new' Insto shareholders?

The third question is what is the fairest way to allocate the $10m to Retail? A rights issue for Retail is the fairest approach. But how unfair is the $5000 SPP? The SPP dilutes if Retail has more than 18,000 shares. Perhaps Hansen should include a Retail breakdown is their next Presentation (ie number of shareholders,number of shares etc) so we can see how many Hansen shareholders have > 18,000 shares? Again, assuming the 80/20% is indeed correct, there is a Retail re-allocation between those with more than 18,000 shares and those with less. Although it is likely that the former may have more than one shareholding (say Private and SMSF) and also are more likely to be active traders (could easily have picked up shares in the $3.80s earlier in the week).

Finally, if Retail only owned 10% of Hansen (not the 20% as allocated) then Retail is already getting twice as many shares as it is entitled?