Why the Computershare (ASX:CPU) share price will be on watch on Friday

The Computershare Ltd (ASX:CPU) share price will be one to watch on Friday after releasing an update on its capital raising…
The post Why the Computershare (ASX:CPU) share price will be on watch on Friday appeared first on The Motley Fool Australia. –

A smiling businessman sits at a desk with bags of mony, indicating a share price rise after funding has been approved

The Computershare Ltd (ASX: CPU) share price will be one to watch on Friday.

This follows the release of an announcement after the market close relating to its acquisition of the Wells Fargo Corporate Trust Services business.

What did Computershare announce?

This afternoon Computershare announced the completion of the retail component of its underwritten 1 for 8.8 pro-rata accelerated renounceable entitlement offer.

The entitlement offer was aiming to raise approximately A$835 million (US$634 million) via a $500 million institutional entitlement offer and a $335 million retail entitlement offer.

Computershare successfully completed the institutional component at the end of last month, raising the funds at $15.05 per new share.

However, retail investors weren’t as interested in the offer.

According to the release, approximately 14,900 eligible retail shareholders elected to partially or fully take up their retail entitlements, subscribing for approximately 13.8 million new shares and raising approximately A$187.6 million.

This represents an aggregate participation rate of approximately 56% by value and approximately 41% by shareholder numbers.

What now?

Approximately 10.9 million retail entitlements not taken up by eligible retail shareholders will be offered for sale in a retail shortfall bookbuild.

Retail entitlements will be auctioned in a retail shortfall bookbuild, which will be a variable price bookbuild commencing with a floor price of $13.55 per new share. This will be conducted after the market close today.

After which, the company can focus on completing the acquisition of the Wells Fargo Corporate Trust Services business by the second quarter of FY 2022.

Is it a good acquisition?

Computershare’s CEO, Stuart Irving, believes the acquisition will be a big positive for the company’s North American operations.

Last month he said: “We are delighted to announce the acquisition of Wells Fargo Corporate Trust Services. It is a clear fit with our successful Canadian corporate trust operations and existing US operations. CTS provides scale with a top four market position, a platform for ongoing growth and increased leverage to long term growth trends and interest rates.”

‘The Acquisition allows us to integrate CTS’ deep client relationships and market expertise to deliver additional recurring fee revenue. We also see the potential for improved returns and margin expansion through new product development and innovative technologies, Computershare’s core competencies. We welcome the proven and experienced CTS team to Computershare, and we look forward to working with them as we deliver on our growth strategy.”

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Computershare (ASX:CPU) share price will be on watch on Friday appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!