Whoop-de–do! The United Arab Emirates’ global investment arm, Mubadala Investment Company PJSC, thinks Select Harvest (ASX code SHV) is worth at least $5.85 a share.
That’s the price Mubadala was offering when it approached Select Harvest about a possible takeover last month. Never mind the directors rejected the offer outright and have not heard from Mubadala since. The Punter takes great comfort from the fact that he bought his SHV shares for only $3.71, and even though it looks as if the takeover bid is dead in the water, Mubadala’s assessment of Select saw the SHV shares jump 20 per cent, to $5, on Monday.
News of the approach was included in a comprehensive company update released by Select Harvest on Monday this week to support its bid to raise as much as $62.5 million net in new capital.
Abundant Produce has sown the seeds of more disappointment for the Punter.
Of this $45m will be a private placement at $4.20 a share – line ball with the share price before the news. Ordinary shareholders are being offered the right to buy up to $15,000 worth of new shares each. These shares will be priced at the lesser of $4.20 or 2 per cent below the volume-weighted average price of SHV shares on the stock market in the five days up to the closing date of the offer, November 3.
The offer price is about 40 per cent below Mubadala’s theoretical valuation. If the full amount is raised it will cut Select’s soaring debt in half, bringing its gearing ratio down to 24.4 per cent. Shareholders have also been given a wealth of information about Select’s outlook and the industry in which it operates.
The Punter, however, will follow his usual practice of waiting until the last minute before deciding whether or not to take up the share offer.
Meanwhile, Abundant Produce has sown the seeds of more disappointment for the Punter. It has raised $2.79m in a private placement at 40 cents to our old friends the rich and well connected, and will ask shareholders for permission to place another $510,000 worth. Smaller shareholders are not being offered the same deal and will see their investments significantly diluted.
On the share market, ABT shares dropped 2.3 per cent to 40c.
- The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.
