Pinned straw:
Austco puts out out their hand for a capital raise
Bell Potter are the underwriters.
Bell Potter also did the raise for Clarity Pharmaceuticals and only 33% took the offer.
I think this could head the same way. Extra 15m shares for retail OR Bell Potter has to buy up to 10m shares (going by the 33% using Clarity and an example) if retail do not take the offer.
I know comparing Clarity Pharmaceuticals and Austco is not an apples to apples comparison but I'm making the point that that retail right now doesn't have the stomach to tip money into the begging bowl unless there is very clear upside and synergies.
Sold on the pop on the morning
[not held].
Other thoughts on the raise:
* Acquisition was meant to complete some time in Q4 of FY24. Maybe they wanted to complete the acquisition sooner to report more income for FY24
* Shore up the balance sheet to get working capital for potential contracts
But the raise was unexpected as the Feb announcement did initially indicate this was to be funded by cash.
So it was still a bit of a surprise to me.
In addition, Bell Potter is doing the raise and was wary they would be given whole lot of stock and then dump on market after the placement completes.
So have now sold based on the above. Have held AHC for more than a year so probably good time to move on. But will still keep a watch to see how this raise goes.