Australian agribusiness Elders tumbles on discounted capital raising

Elders

19/11/2024 01:35

By Rajasik Mukherjee
       Nov 19 (Reuters) - Shares of Elders  ELD.AX  fell on
Tuesday to their lowest level in more than seven months after
the Australian agribusiness firm raised about A$143 million
($92.96 million) at a discounted rate to fund its acquisition of
Delta Agribusiness.
    The stock declined as much as 11.3% to A$7.670, its lowest
since April 8, as trading resumed after a halt on Monday. The
benchmark index  .AXJO  was up 0.7%, as of 0101 GMT.
    On Monday, the agribusiness firm reported a 55% decline in
annual net profit after tax to A$45.1 million. Brokerage firm
Jefferies said the full-year results missed street consensus.   
    "I don't think the management of ELD has performed very well
at all," said Brad Smoling, managing director of Smoling
Stockbroking, adding that the agribusiness "has been out of
favour for some time now."
    Adelaide-based Elders said on Monday it had signed an
agreement to buy Delta Agribusiness for A$475 million. The
company said it was undertaking a capital raising and a loan
facility of A$110 million to fund the acquisition.
    Elders raised about A$143 million at an offer price of
A$7.85 per share - a 9.2% discount to the stock's last close.
    "The purchase of Delta is earnings-accretive... one can only
hope that the management talent in Delta transfers across to ELD
in the days ahead," said Brad.
    

($1 = 1.5382 Australian dollars)

 (Reporting by Rajasik Mukherjee; Editing by Subhranshu Sahu)
 ((Rajasik.Mukherjee@thomsonreuters.com;))