Transurban Group (ASX:TCL) recently announced a security purchase plan to provide eligible security holders with an opportunity to subscribe for up to $15,000 of Transurban stapled securities without incurring brokerage or other transaction costs (“SPP”). The funds raised under the SPP will contribute to funding Transurban’s acquisition of the remaining 34.62% interest in M5 West for $468 million (excluding stamp duty and transaction costs of $47 million), and for general corporate purposes.
As noted above, under the SPP, securityholders as of the Record Date (6 August 2019) have the opportunity to apply for up to $15,000 worth of additional TCL securities. The issue price payable for TCL securities under the SPP will be the lesser of $14.70 and a 2% discount to the volume weighted average price (VWAP) over the last five trading days up to and including the closing date of the offer (26 August and 30 August 2019). Eligible securityholders have the ability to apply for SPP securities in the amount of $1,000, $2,500, $5,000, $10,000 or $15,000 regardless of the number of Transurban securities they held on the Record Date.
The SPP opened at 9.00am (AEST) on 15 August 2019 and closes at 5.00pm on 30 August 2019. The SPP offer is non-renounceable, which means you cannot transfer the offer to a third party. Clients should also be mindful that all securities issued under the SPP will rank equally with existing Transurban Securities, but will not be entitled to the distribution of 30.0 cents per Transurban security for the 6 months ended 30 June 2019, as the record date for that distribution was 28 June 2019.
Our independent third-party research provider Morningstar is not overly constructive on Transurban’s outlook citing valuation concerns after a period of strong security price appreciation from mid-2018 and as a result, recommend that securityholders should avoid subscribing as the stock is currently trading well above Morningstar’s assigned fair value of $12.00.
If you have any further queries in relation to the SPP 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.