The $2 billion discounted raising by Westpac has ended up being a good result for the bank.
Westpac shares closed at $27.17, which was 2.5% lower than Friday’s close, but 6.5% above the issue price which represented a 9% discount to the final price last Friday.
The shares fell to a low of $26.46 (down more than 5%) in early trading as institutions offloaded shares to capture profits.
What would have been encouraging would have been the way the price firmed during the session yesterday as more buyers than sellers emerged.
A total of 27.059 million Westpac shares – worth around $711 million) – were traded yesterday.
Seeing 79 million areas were issued to big shareholders in the $2 billion raising the number sold was 34% of the issued capital by number, a positive as well.
In the end, the issue proved to be a bit less dilutionary than some investors had thought.
Westpac now has a $500 million share purchase plan as part of a total $2.5 billion capital raising to help the bank fulfill its regulatory capital requirements and cover the cost of future litigation related to customer remediation issues.
Details for that issue will be out on November 12.