Ann: Entitlement and Acceptance Form, page-5

"Thanks for the commentary. Fascinating. Out of interest, how was it botched? What sort of mechanism for raising could they have pursued to avoid the botching."

I think it was due to a combination of the following (in decreasing order of relevance):

1. At $116m it is big raising by AUB's standards
(For context, in the years since I started following the company (2009) and 2015, they raised only $19m in equity issuance (admittedly they issued a lot of stock - probably around $50m worth - through DRPs. But since 2015 they have not issued any shares whatsoever.

2. The discount - being 9% below TERP - was a bit skinny, especially in the context of the current market mood.

3. The stock is not fundamentally cheap, even at the issue price

4. The prevailing mood in the market

5. Possibly the lack of financial metrics around the additional interest they acquired in the Adroit business for $21.7m

6. Lack of liquidity in the stock which might have prevented some holders from adding to their portfolios due to liquidity constraints.


PS. Actually, my initial post might have been misleading. While the take-up of entitlement stock by existing holders was indeed just 66%, the remainder of the institutional stock was fully placed with new and existing investors, so the under-writers didn't end up with any institutional stock.

However, some of that stock would surely have ended up in a few "hot hands" looking for a quick stag profit, which has clearly not materialised, so they are likely to be quitting the trade. And that probably explains the sharp share price weakness in recent days.

But the $18m retail component will still almost certainly end up on Credit Suisse's book, given how far underwater the share price now is from the offer price, so that part of my initial post is still valid, I think.

Either way, it is a confluence of technical and non-fundamental forces that is conspiring to create an imminent opportunity I think.