Elders Limited Initiates Retail Entitlement Offer to Fund Delta Acquisition
ELD (ELD) Share Update November 2024 Sunday 24th
Elders Limited Launches Retail Entitlement Offer to Raise $103 Million
Elders Limited (ASX: ELD) has announced a retail entitlement offer as part of its strategy to fund the acquisition of Delta Agribusiness, aiming to raise approximately $103 million.
Instant Summary:
- Retail entitlement offer priced at $7.85 per new share.
- 1 for 5.05 pro rata accelerated non-renounceable entitlement offer.
- Total capital raising of $246 million for Delta Agribusiness acquisition.
Offer Details
Elders Limited has launched a retail entitlement offer, inviting eligible retail shareholders to participate at an issue price of $7.85 per new share. This offer forms part of a larger capital raising initiative to fund the acquisition of Delta Agribusiness.
The offer is structured as a 1 for 5.05 pro rata accelerated non-renounceable entitlement offer, allowing shareholders to purchase one new share for every 5.05 existing shares held. The retail component aims to raise approximately $103 million, contributing to the total capital raising goal of $246 million.
Strategic Acquisition
The funds raised will be used to acquire Delta Agribusiness, a leading Australian agribusiness with a strong presence across 68 locations. The acquisition is expected to enhance Elders' technical expertise and expand its geographic footprint, particularly in New South Wales, Victoria, South Australia, and Western Australia.
Delta Agribusiness generated a revenue of $835 million and an EBITDA of $53 million in the last twelve months to 30 June 2024. The acquisition is aligned with Elders' core strategy of disciplined growth through strategic acquisitions.
The retail entitlement offer is expected to strengthen Elders' financial position by providing the necessary capital for the acquisition of Delta Agribusiness. This strategic move could enhance Elders' market presence and operational capabilities, potentially leading to increased shareholder value in the long term.
Investor Reaction:
Analysts have generally reacted positively to the announcement, noting the strategic fit of Delta Agribusiness within Elders' portfolio. The offer price represents a discount to the theoretical ex-rights price, which may attract retail investors looking for value opportunities.
Conclusion:
Investors should consider participating in the retail entitlement offer to capitalize on Elders' strategic acquisition of Delta Agribusiness. The offer closes on 9 December 2024, providing a limited window for participation. Elders' continued focus on strategic growth initiatives positions it well for future success.