TUESDAY, 11.00AM
INSTITUTIONAL investors from America, Europe and the United Kingdom have pounced on Billiton’s offer of shares, way exceeding market expectations.
The company will trade for the first time on the London Stock Exchange on Tuesday, at first conditionally, then normally from next Monday.
Billiton and financial advisers Fleming Martin said in London on Monday night 431-million shares will be issued at 2,20, to raise new capital of $1,6-billion.
Billiton’s parent Gencor’s chairman Brian Gilbertson expressed confidence that the share will trade at 2,20, while analysts believe they will change hands in the 2,10 to 2,40 range. About 430 institutions showed an interest in acquiring Billiton stock, a sharp contrast to the reception received by Gencor in 1994 when it tried to raise loan finance to cover its purchase of Billiton from Royal Dutch Shell.
Gilbertson said, given that 70% of Gencor’s earnings in the year to end June would derive from SA assets, that the interest in Billiton is a vote of confidence in SA as an investment destination.
The next step is to decide which institutions will be allocated blocks of Billiton shares, and the size of those blocks. The extent of the oversubscription means that Billiton can be selective in building its share register, with preference expected to be given to long-term investors.