Ebos Limited EBO

[Filthy]

So, a $150m raise. GXH market cap currently $157m(ish). Hmmm, so throw a couple of extra bucks in and they could maybe have a crack at it? Good timing too (5-year lows). Could be why there has been a bit more life in GXH recently? Just a guess though.

[macduffy]

Yes, a discount paid for by all other shareholders, that's pretty poor.

However, there may be some bargains when trading starts again if the discounted placement knocks the shareprice.

[Biscuit]

However, there may be some bargains when trading starts again if the discounted placement knocks the shareprice.

No, it's just legalized theft. Am reconsider this company as an investment, so certainly not in the market for more. They have not performed well for awhile now. Not sure there is really a compelling story here now.

[Joshuatree]

We have been offered some.Not enough in it for us and we have enough. Will be around 4.5% dilution .

[macduffy]

No, it's just legalized theft. Am reconsider this company as an investment, so certainly not in the market for more. They have not performed well for awhile now. Not sure there is really a compelling story here now.

Legalized theft or not, and whether we like it or not - I don't! - discounted placements are the modern way for raising large amounts of capital, quickly.

Not performing well? Increased earnings per share for the last five years!

[777]

Also the cheapest way.

[Biscuit]

Legalized theft or not, and whether we like it or not - I don't! - discounted placements are the modern way for raising large amounts of capital, quickly.

Not performing well? Increased earnings per share for the last five years!

Profit was down on the interim, 12% up last full year and 5% previous year? That's not too hot I think?

[percy]

I held EBO for over 25 years.No longer hold.
The PE ratio used to vary between 13 and 15.
The growth rate was between 12% and 20%.
Today the PE is 22.45 ,while the growth rate appears to be between 6% and 12%.
The current gross yield is a very modest 3.27%.

[Jaa]

Also the cheapest way.

Cheaper for who?

8% of 150m is 12m, then there is the placement and underwriting fees. An accelerated renouncable pro-rata rights issue would cost less than that and have no need for underwriting. That is best practice and a company should justify why they use any other way to raise capital.

Remember the damage done to the TRA share price after they pulled the same rubbish and they had a SPP, something EBOS isn't even bothering with. Diluting shareholders to the benefit of the big end of town totally destroys shareholder goodwill. This from a company I held in high regard until now.

No wonder the NZX is falling apart if this is how companies treat their own shareholders.

[777]

You can't call the 8% below market value a cost to the company. A cash issue would have to be pitched at about the same level in order for shareholders to take up the offer. There would be more costs dealing with thousands of shareholders than what this is costing them.

I agree though that in fairness to shareholders that a cash issue is the preferred method .