Transurban Group (ASX:TCL) Entitlement Offer

Transurban Group (ASX:TCL) recently announced that it had entered into an agreement to acquire a 25.5% stake in the WestConnex project, followed by a capital raising of $4.2bn to fund the acquisition together with an additional $600m for general corporate purposes.

Under the Retail Entitlement Offer, Transurban is offering eligible shareholders the opportunity to subscribe for 10 new shares for every 57 existing shares held as at the Record Date (7.00pm AEST on 5 September 2018) at an offer price of A$10.80 per new security. The company announced the successful completion of the institutional component which attracted strong demand and has confirmed it had raised $3bn in equity from institutions as part of the rights offer.

The retail entitlement offer opens on 7 September 2018 and is expected to close on 18 September 2018. Eligible retail security holders also have the option to sell their entitlements on the ASX, with trading to commence on 5 September 2018 (on a deferred settlement basis), on 10 September 2018 (on a normal settlement basis), and conclude on 11 September 2018. Retail entitlements will trade under the ASX ticker “TCLRB”. Clients should be mindful that associated brokerage costs may have a material impact on the net proceeds received, depending on the number of eligible entitlements held in the event an election is made to sell some or all of those entitlements.

Our independent third-party research provider Morningstar remains constructive on TCL as a leading toll road owner/operator with a high-quality portfolio of assets in Australia and North America and as such, have recommended that shareholders take up the offer given that the entitlement offer price of $10.80 represents a 6% discount to Morningstar’s assigned fair value of $11.50 and a further 9% discount to the theoretical ex-rights price.

If you have any further queries in relation to the offer and wish to discuss any matters in relation to your holding, please feel free to contact a member of our Wealth Management team on 03 9810 0700.

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