Discount rate of 8.4% vs a lower dilution of 4.8% (for 40 mio raised instead of the initial planned 110 mio), seem excessive to me. Apparently, Mr market agreed in the morning.
While I appreciate the lower dilution and the utilisation of cash from the 2013 placement, there are also more questions that need to be answered.
About 100 mio is raised in the last placement, more than enough to cover the 70 mio difference the initial placement exercise want to raise.
So altogether, 170 mio of cash(excluding the 40 mio and consideration units to be issued) need to be set aside for this acquisition. Looking the Q3 cash level of 223 mio. it seems that the lower dilution is a pleasant surprise.
However, the pleasant surprise is offset by a nasty surprise of only 0.55 cents of advance payment. while it is not confirmed, lets assume the full quarter of distribution is 14% higher (13 days more out of 90), which is 0.62 cents. It is still an almost 10% fall in DPU QoQ from 0.69 cents.
The Pluit Village effect coming into play?
Looking at the currency exchange for the past 6 months, hardly any big swing to answer for that lower distribution
I almost wanted to accumulate at the lower price, until the lower distribution caught my eye.
A quick calculation:
Total dilution from equity raising and consideration shares will be about 10%.
So, 0.55 cents could be a conservative new normal QoQ DPU going forward for the next 1-2 quarters with all the one-off costs causing more downward pressure.
Assume 15 mio increase in NPI for distribution, yearly DPU should 2.75 cents, which translate into a yield of 7.9 % annually.
Seem not too bad a deal if you ask me.