Property developer Peet Ltd plans to raise up to $52 million in an equity raising after agreeing to acquire stakes in six residential projects.
Peet will raise $40m through a share placement to institutional investors and another $7m through a placement to an entity associated with Chairman Tony Lennon. The company will also raise a maximum of $5m by issuing shares to retail shareholders.
All the shares will be issued at $1.11 each, a 5.5 per cent discount to its last traded price of $1.175 a share. Peet shares are currently in a trading halt pending the capital raising.
The company will use the proceeds to fund the acquisition of stakes in six residential projects. These include four developments in Perth, one in Adelaide and another in Victoria. The total cost of the acquisitions will be $95m, with Peet’s share at $55m.
The $40m institutional placement, being managed by Merrill Lynch, will be completed on Friday, with shares expected to resume trading on the ASX on Monday.
Peet, which mainly operates in Western Australia and Victoria, has seen a sharp rise in profits on the back of rising demand for residential property in Australia’s capital cities. It had reported a 73 per cent jump in fiscal 2014 profit to $31.6m. Last year, it acquired listed developer CIC Australia for $76m.
(Prashant.mehra@businessspectator.com.au)