The company’s shares lost significant ground in morning trade…
The post BWX (ASX:BWX) share price slips 6% on placement update appeared first on The Motley Fool Australia. –
The BWX Ltd (ASX: BWX) share price is backtracking after coming out of a trading halt today.
The personal care products company provided an update to investors in regards to its capital raising efforts early this morning.
When the market opened, BWX shares rose to an intraday high of $5.56, however, those gains were quickly erased. At the time of writing, the company’s share price has rebounded to $5.12, down 3.48% on the previous close.
What did BWX announce?
A possible catalyst for investors dragging down BWX shares is an impending share dilution by the company.
In a statement to the ASX, BWX revealed it has successfully completed an $85 million (before costs) institutional placement.
This will see approximately 17.5 million new ordinary shares issued at a price of $4.85 to each participating investor. The offer represents an 8.7% discount to the last closing price of BWX’s shares on 26 August 2021.
The placement received strong interest from the company’s existing institutional shareholders, as well as other institutional investors. Demand significantly exceeded expectations of what BWX was seeking to raise under the placement.
Proceeds raised will be allocated primarily towards funding BWX’s acquisition of a 50.1% controlling interest in Go-To-Skincare. The purchase price to own a majority stake in the company is worth around $89 million.
BWX group CEO and managing director Dave Fenlon commented:
We are incredibly excited to partner with Go-To Skincare, BWX’s entry into the masstige market and the growth opportunities ahead. We are pleased with the strong institutional demand and thank investors for their support.
The new shares are expected to settle on Wednesday and be available to commence trading the following day.
About the BWX share price
Since this time last year, BWX shares are flat. However, year-to-date, they have generated returns of above 20%. The company’s share price is sitting in the upper-mid of its 52-week range of $3.60 to $5.63.
On valuation grounds, BWX presides a market capitalisation of around $699.4 million, with 141 million shares on issue.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.