Elders shares sink after $143m discounted equity raise
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The news: Elders shares tanked as they emerged from a trading halt on the ASX, after the agriculture and real estate group announced that it had completed a discounted institutional entitlement offer, raising around $143 million.
The numbers: Elders shares were down 9.3% to $7.85 by 1:20pm AEDT, making it the worst performing stock across the ASX 200.
The group's equity raising was completed at an offer price of $7.85 per new share, representing a 9.2% discount to its closing price on Friday.
The raise will part-fund the proposed acquisition of Australian agriculture company Delta Agribusiness, announced on Monday, for $475 million.
The context: Elders, which also reported 55% decline in full-year profit and slashed its total dividend on Monday, saw support from analysts for the acquisition.
Citi called the proposed deal a "sound acquisition", given it is "highly complementary" to Elders, projected synergies are likely to be conservative, and Elders' strong track record in acquisition and integration.
Bell Potter analyst Jonathan Snape noted that the Delta acquisition "looks likely to aid the next leg of growth" for Elders into FY26 and FY27.
What they said: "It is pleasing to see the strong investor support for the acquisition of Delta Agribusiness and the equity raising, providing us with greater exposure to key local retail markets as well as a leading agronomy and farm advisory team," said Elders' managing director and CEO Mark Allison.
The sources: ASX announcement, Citi research, Bell Potter research
