GUD shares dropped ~10% at market open before finding a gear. At the time of writing, the diversified products company’s shares are swapping hands for $11.23, down 6.65%.
GUD shares resume trading
It has been a disappointing day for GUD shares, with investors selling their holdings amid the company’s successful equity raise.
GUD has raised gross proceeds of approximately $290 million through an institutional placement and institutional entitlement offer, according to its release.
The institutional component sees 1 share issued for every 3.46 GUD shares owned. Issued at $10.40 apiece, the majority of eligible institutional securityholders took up their allocated minimum entitlements.
The company will allot the newly-created shares to accounts on 8 December, and will be available to trade the following day.
Under the placement, about 11.5 million new shares have been issued at the offer price, raising $120 million.
With the institutional entitlement offer and placement now completed, the retail component will commence on 6 December. Hoping to raise an additional $115 million, GUD will offer the same terms and ratio of shares to eligible retail shareholders. The retail entitlement offer will close on 15 December.
In total, the company is aiming to raise $405 million for the acquisition of AutoPacific Group (APG). GUD recently entered into a share purchase agreement with APG for a total consideration of around $744.6 million.
GUD managing director and CEO Graeme Whickman commented:
We are pleased with the strong support shown by new and existing shareholders for the equity raising and the acquisition of APG, which will see the group make a meaningful step towards its vision of becoming an integrated leader in 4WD Accessories and Trailering in Australia and New Zealand with future export potential.
About the GUD share price
Trading along in small and sharp share price movements, GUD shares have gone nowhere over the last 12 months. Year-to-date share price performance is also similar, down by just 4% for the period.
GUD presides a market capitalisation of roughly $1.14 billion, with approximately 94.86 million shares on its books.