Macquarie Share Purchase Plan
The latest announcement from Macquarie Group on their share purchase plan, SPP, contains key details for retail investors.
Shares will be issued at the lower of $26.60 or a 5% discount to the 5 day VWAP of shares prior to closing date.
Like other recent offering there are four participation levels, $15k, $10k, $5k and $2.5k.
Macquarie has absolute discretion in scale back. They estimate 131,000 eligible share holders. If each shareholder fully participates Mac would have a $2B raising on their hands, not including the $540M they just bagged from institutions. Despite the current large premium*, it is very unlikely there will be full participation, but a scale back is likely. (*MQG trading at $34.87 as I write.)
- Full details and an application form will be sent on May 11.
- The closing date is expected to be Friday May 29th.
- Share expected to be allocated on Friday 5th June.
- “Any scale back will be on a pro rata basis based on applications.”
The share price rise since Macquarie’s earnings and capital raising announcement has caught a lot of retail investors off guard. This is graphically demonstrated by the share price movement on Monday.
Retail investors clearly thought the share price would plummet down toward the SPP price of $26.60 and were quick to sell their holdings on Monday morning. The thinking was to sell quickly knowing that they could buy back using the SPP. With the share price going almost 20% higher since the lows of Monday morning I wonder if some of those with quick trigger fingers are kicking themselves now. I certainly hope they factored in a likely scale back.
Our shares are held within our SMSF and we will be participating in our full allocation. I have not yet sold any of our Mac shares, but my finger is on the tirgger.
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Quick note to say I sold part of our MQG position today. This was done to raise cash for buying full allocation of the SPP and to ensure I do not become overweight in MQG. 48% profit since 18th November and a wild roller coaster ride to boot.
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