MENU

Bunnings rights issue announced

As expected, Bunnings Trust (ASX: BWP) has announced along with its annual results a capital raising to purchase and leaseback another 11 sites, said to be in prime retail locations throughout the country.

The $300 million raising will be a 1 for 6.18 accelerated non-renounceable entitlement offer to help buy 10 Bunnings Warehouses and one bulky goods centre, realising $271 million for ultimate owner Wesfarmers (ASX: WES), which said this morning it was also having discussions with “other parties that would result in a separate transaction involving a Bunnings portfolio of freehold properties to release further capital from (its) balance sheet”.

The total price for the assets now being sold is $312 million at an overall yield of 7.35 per cent and the share offer will be at $2.30, compared to $2.41 when Bunnings went into a trading halt yesterday, saying a media inquiry indicated confidentiality about the raising may have been breached.

The purchase is reckoned to have a neutral effect on Bunnings balance sheet in 2014, but the company has forecast a 2% increase in distribution in 2015 over the 14.6 cents per unit forecast for 2014.

Bunnings Trust earns more than 90% of its income from the sites it leases to 67 Bunnings Warehouses owned by Wesfarmers. After being spun off by Wesfarmers in 1998, it has a current market capitalisation of $1.3 billion and is expected to resume trading tomorrow.

Interested in our #1 dividend-paying stock? Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading


Motley Fool contributor Andrew Ballard owns shares in Bunnings Trust and Wesfarmers.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.