Seven Group Holdings wants to raise $400 million from investors to help it buy the remainder of equipment hire company Coates Hire.
The Kerry Stokes-controlled company says it will conduct a fully underwritten $375 million placement of ordinary shares, along with a $25 million non-underwritten share purchase plan.
Seven Group said the equity raising was prompted by the "overwhelmingly positive" investor feedback on Wednesday following its decision to buy the 53.3 per cent of Coates Hire it does not already own for $517 million.
The bulk raising will comprise of the issue of about 33.5 million fully paid ordinary shares to institutional investors in Australia and internationally at an issue price of $11.20, roughly a nine per cent discount on Wednesday's closing price of $12.28.
The non-underwritten component, to raise around $25 million, will offer retail shareholders in Australian and New Zealand a placement price of $11.20 with a cap of $15,000 worth of additional new shares per shareholder.
The company bought almost half of Coates Hire in 2008 and had said it would fund its latest purchase with existing earnings and cashflow, including proceeds from the sale of its WesTrac operations in China in October - which is expected to be in excess of $500 million.
It said full ownership of Coates Hire, which delivered a five per cent lift in revenue in the 2016/17 financial year and has more than 200 branches nationwide, would enhance Seven Group's portfolio and increase its exposure to industrial services.
Share
