Transurban boon for retail shareholders

TRANSURBAN is getting ready to wrap up the capital raising for its purchase of Queensland Motorways, and there may be some good news for retail shareholders.

The bookbuild for any shortfall in the retail entitlement issue is due to get under way today with the shares well above the $6.75 offer price.

After holding above that price through the news of the discounted $2.24 billion issue last month, Transurban climbed to a high of $7.41 last week and was at $7.35 yesterday.

History suggests that when the offer is so strongly in the money, the higher the number of shareholders taking up their entitlements. That means a smaller shortfall for broker Goldman Sachs to dispose of and likely stronger demand.

It could be one of those rare occasions where retail shareholders do better than the institutions in the return they receive for selling their entitlements. (Transurban gets the subscription price but shareholders get anything above that.) Institutional shareholders rushed the offer, such that there was just 90 million shares to sell, at $7, returning a $3.2 million surplus to institutions.

Should retail shareholders do better than that, Transurban’s board, led by Lindsay Maxsted, is likely to feel relieved in its decision to resist calls from the Australian Shareholders Association for the shortfalls to be combined and sold in one bookbuild.

That won’t pacify the ASA, however, which published research showing split bookbuilds almost invariably deliver different returns to retail and institutional shareholders — and usually at the expense of the former.