NAB chair Phil Chronican has dudded his retail shareholders once already with a $3.5 billion capital raising. The question now is whether he will do it again with a massive cutback in retail offers.
Bids for the retail offer went in on Friday with the decision to be announced on Wednesday.
Ownership Matters figures show that so far $16.6bn has been raised in the COVID-19 capital raising binge, producing $311 million in fees for the investment banks.
NAB’s April capital raising failed capital management 101, paying $895 million in dividends while putting out the other hand for $3.5bn.
It would have made more sense to cut the offer size, but the bank said the dividends were paid to give retail holders something.
Now Chronican will show how much he really cares about its 570,000 retail shareholders.
They have already been diluted by something like 212 million new shares issued to pay for the $3bn raised in the institutional offer at $14.15 a share.
The retail offer was limited to $500m or another 35 million new shares.
Meanwhile, on Monday Ramsay said 52 per cent of its retail holders wanted to participate in its $1.2bn raising. But the market thinks the NAB offer will attract less in part because Ramsay has been a glamour stock for some time and is a newer company compared to NAB.
That said, the latest broker reports show eight banks had a buy on NAB compared to six for ANZ and just two and three for Westpac and CBA respectively.
If 25 per cent of the NAB register put its hand up for the full stock issue this would raise $4.2 billion or more than eight times the $500 million planned.
At $15.67 a share, the stock is trading at a premium to the issue price.
We can assume that more shareholders wanted shares than NAB have allocated and why wouldn’t you if you had the spare cash.
The bank is back on the broker buy list, is trading at a premium to the offer price and under new boss Ros McEwan the bank looks set to handle the tough conditions ahead.
It all depends on how many shares Chronican and his will allocate.
For that answer we will have yo wait until Wednesday but shareholder advocate Stephen Mayne is ready to jump if the NAB board duds its shareholders yet again.
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