Rights is­sue sparks volatil­ity, but Sta­dio still gets good marks

Business Day - - COMPANIES - Karl Ger­net­zky Mar­kets Writer ger­net­zkyk@busi­nesslive.co.za

Shares in pri­vate ed­u­ca­tion group Sta­dio surged an­other 6.5% to R6.55 on Thurs­day, after a volatile week for the re­cently listed ter­tiary busi­ness of Curro.

Volatil­ity in the share price was largely re­lated to the group’s rights is­sue, but the share price re­mained well sup­ported and there also ap­peared to be in­ter­est from in­sti­tu­tional in­vestors in the stock, said Ni­cholas Sorour, a port­fo­lio man­ager at Sas­fin Se­cu­ri­ties. Sta­dio plunged 24.63% on Tues­day, when shares be­gan trad­ing ex-rights and gained 40.32% in the pre­vi­ous three ses­sions.

It is up 5.65% so far this week and has gained 18% since its list­ing.

Pri­vate ed­u­ca­tion group Curro un­bun­dled Sta­dio into a sep­a­rate list­ing at the be­gin­ning of Oc­to­ber, with the com­pany seek­ing to raise R640m through the rights of­fer.

As of Tues­day, ac­quir­ing 100 Sta­dio shares con­veyed a right to about 57.2 right of­fer shares, at a sub­scrip­tion price of R2.50.

Sorour said the drop on Wed­nes­day was prob­a­bly due to the di­lu­tion­ary ef­fect of the rights trad­ing, but Sta­dio’s share price had re­mained sup­ported, mean­ing most were likely to ex­er­cise their rights at R2.50.

“If you are a share­holder in Sta­dio, this is very pos­i­tive,” Sorour said. Dur­ing the six months to end-June‚ Sta­dio ac­quired 100% of film school Afda and a 74% stake in South­ern Busi­ness School.

The total com­mit­ted ac­qui­si­tion value was R540m‚ with the ad­di­tional in­vest­ment into three Em­bury cam­puses to­talling R130m.

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