NZ company brews up plans for rights issue

Brewer Moa Group plans to raise up to $3 million through a rights issue to help fund its acquisition of bar and restaurant owner Savor Group if the deal is approved by shareholders at a special meeting next month.

In December, Moa announced a conditional agreement to acquire the business it said would add $3.6m of operating earnings in its first full financial year.

The conditional agreement is for Moa to pay $13m up front for Savor Group, of which

60 per cent would be in cash and 40 per cent in shares. The maximum purchase price, if all contingent elements of the consideration were to become payable, is $21.4m.

The deal is to be funded by a mix of bank debt, a private placement and a rights issue, it said. Yesterday it said a $5.5m bank facility has now been conditionally agreed with Bank of New Zealand, and Moa has received firm commitments for a placement of $3m, at an issue price of 38 cents per share from a group of private investors. That includes $750,000 from a family trust associated with executive chair Geoff Ross. The rights issue will be at the same price.

The issue price for the $5m scrip component of the purchase price will be the

20-day volume weighted average leading up to the transaction. If that matched the 38 cent price in the upcoming placement, it would equate to 13.3 million new Moa shares, or 15 per cent of the enlarged group.

Its volume-weighted average price over the past 20 days is almost 46 cents, which would equate to about 11 million shares, or about 13 per cent, for Savor’s sellers. The rights issue will be launched after the company obtains shareholder approval on March 12. The one-for-11 offer will seek to raise $2m with provision for another $1m of oversubscriptions, Moa said. It is expected to launch in March.