Volatile market foils $30m Wynyard share offer
Software company backtracks on $2 minimum offer price
The new year’s sharemarket turmoil has disrupted a $30 million capital raising by NZX-listed Wynyard Group, with the security software company backtracking on its $2 minimum offer price.
Wynyard shares are currently priced at about $1.70 a share, valuing the company at $240m.
In a statement to the NZX this afternoon, Wynyard said it would seek shareholder permission to raise money at less than $2 a share.
“In recent weeks global equity markets have been extremely volatile. This volatility may continue for some time. These market conditions are disrupting the company's ability to raise capital at this price at this time,” it said.
The proposal follows a special shareholder meeting on December 11, which approved the issue of up to 15 million shares at a minimum $2 a share.
The money is planned to boost Wynyard’s international growth, particularly in the US and the Middle East, and expand its research and development.
At the time, Wynyard said it believed its share price was undervalued and “several strategic investors have signalled interest and we believe there is demand at this level.”
It said it was seeking approval for the capital raising partly because global capital markets were expected to remain volatile for the next two years.
Its share price on December 11 closed at $1.97, its highest in 10 months.
A notice of meeting is expected to be sent to shareholders next week.
Shareholders Association chairman John Hawkins told BusinessDesk the change of plan could affect its view of the capital raising.
"At the [December] meeting, the Shareholders Association reiterated that it strongly favoured renounceable rights issues, which are fairer to all shareholders. It accepted that forming strategic alliances via new overseas shareholders may be advantageous at the pricing level management said it was confident it would achieve, i.e., over $2. Following the notice today, the association will reconsider its view".
Tim Hunter
Thu, 28 Jan 2016
Thu, 28 Jan 2016
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Volatile market foils $30m Wynyard share offer
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