Quote:
Originally Posted by
steve fleming
Sounded like a number of brokers (Wilsons, Cannacord, Ballieu) were all trying to position themselves to get the cap raising....therefore pretty surprising and disappointing that 32c is the best they could do.
The other thing is given how cheap HDX is trading, I don't know how earnings accretive an acquisition is going to be, unless they can get something at less than 2x EBITDA, which seems highly unlikely.
Hughes Drilling’s institutional placement closed over-subscribed on Wednesday night, with the company raising $17.5 million through Baillieu Holst. The book was due to close at 2pm on Thursday, but it is understood the deal was closed early after receiving adequate demand. The company was looking to sell about 54.7 million new shares at 32¢ each. It was a 17.9 per cent discount to the last close and 13.1 per cent discount to the 30-day volume weighted average price. The offer was to pay for the acquisition of ReichDrill, a supplier of production rigs. Hughes Drilling agreed to pay $US8.9 million for the purchase, which was equivalent to about 10 per cent of Hughes’ market capitalisation.
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Interesting - HDX is buying out its sole supplier/manufacturer of drilling equipment. Vertical integration to drive margins I guess. Will also diversify HDX's revenue streams, reducing reliance on NSW/QLD coal.