ARV - Arvida Retirement Villages

[Beau]

After cashing out a large portion of my portfolio late January/early February to buy a house, I am back in ARV... I sold out on the 1st of February 2021 at $1.82 but took part in the recent placement (including taking up the full entitlement to the rights issue - so an average purchase price of just under $1.95).

I have always believed in ARV (since day 1 - IPO at 95 cents on the 18th of December 2014) and continue to do so... hence I am glad to be back on board (for not too much more of a premium than when I sold earlier this year!)

Welcome back Trader Jackson had been wondering where you had gone on this thread, had always appreciated your view on Arvida for a while there you where alone voice.

[biker]

Can anyone explain how the shortfall bookbuild works? It seems the price can be higher than $1.85 and shareholders who don't participate will receive the premium? So what is the benefit in participating? I've got to be missing something.

From their last bookbuild: https://www.arvida.co.nz/investors/n...bookbuild-6116

If anyone can make sense of it for me, that would be much appreciated.

Edit: From the current rights offer document: The price payable for these Shares will be set during the Shortfall Bookbuild, but will be no less than the IssuePrice of $1.85 per Share and no greater than the closing price prior to the day of the Shortfall Bookbuild.Any premium above the Issue Price that is achieved in the Shortfall Bookbuild will be shared between thoseshareholders who did not, or were unable to, take up their rights, in proportion to the number of rights nottaken up.

So if the premium ends up being near the closing price prior to the day of the bookbuild and the SP dips after the bookbuild could you not end up paying higher than market value?

Yes, you could and that’s a risk you take.
Disc. Have applied for more.

[bull....]

interesting the rights issue was not over-subscribed

[Rawz]

interesting the rights issue was not over-subscribed

That's actually a bit of a shock..?!

[trader_jackson]

I thought a about 75% subscription/uptake was pretty good - especially given the recent addition of new (and former ) shareholders
I will be surprised if the shortfall bookbuild is more than a few cents below $2 (ie much stronger than the rights issue [$1.85] and at or above the placement [$1.96])

[777]

You can bid for more via the new issues part of Direct Broking website.

[winner69]

That's actually a bit of a shock..?!

It is seeing most on here were saying insto’s and mum and dads were selling OCA (and others) to take up their rights

My first reaction …wow only 75%

[ronaldson]

Beagle explains it ( the shortfall circumstance ) well on the OCA thread, in response to Bull posting there too.

[flyinglizard]

Clearly, fund manager has to be line with the fund internal holding target to certain % of holding in retirement sector. They can shift from a company to another company within the industry. To participate ARV new share placement, they have to reduce one of the underperforming company holdings, ARV net profit and growth is certain in the near term , but fundamental of OCA is not so great. One of the holders of OCA moves its holdings in this way.

Retail investors may suffer from insufficient cash reserve to participate ARV new share placement. This year NZX runs not well, people are more conservative about sharemarket, cannot inject more cash into the market. Some investors simply walk away from new share issuing, or sell down some holdings to participate the new share placement. ARV recent sell down may reflect this behaviour.

Fundamentally, ARV has not changed and is still sticky to the long term busines model.

[winner69]

Beagle explains it ( the shortfall circumstance ) well on the OCA thread, in response to Bull posting there too.

I’d say poor response from shareholders …..75% acceptance is pretty woeful


Wonder why a significant number of ‘eligible’ shareholders didn’t bother support it?

Maybe concerns about the short term prospects of the sector? Surely not a concern about Arvida.