Australia's Goodman Group shares tank after $2.5 billion fundraising

Goodman

20/02/2025 24:28

By Roshan Thomas
       Feb 20 (Reuters) - Shares of Australian property and logistics company Goodman Group
 GMG.AX  dropped over 7% at resumption on Thursday, a day after the company raised A$4 billion
($2.54 billion) to fund its data centre business growth plans.
    Goodman, which went on a halt on Wednesday, announced it would issue 119.42 million shares
at a price of A$33.5 apiece, a 6.9% discount to the Sydney-headquartered firm's last closing on
February 18.    
    "Although the increased liquidity and initial dilutionary impact to earnings is expected to
weigh on the share price initially once the share opens post a trading halt, we remain
optimistic on the double-digit growth trajectory of the business", analysts at Citi said in a
note.  
    "The funds raised will enable us to optimise the opportunities we're creating over the long
term, particularly through our data centre offering, and provide greater financial and
operational flexibility to manage the next phase of growth", CEO Greg Goodman said.
    The escalating demand for data centres is being fuelled by the increasing use of cloud-based
technologies, data migration, and AI and machine learning.
    On Wednesday, the company reported a first-half operating profit of A$1.22 billion, marking
an 8% increase from the same period last year.

($1 = 1.5773 Australian dollars)

 (Reporting by Roshan Thomas in Bengaluru; Editing by Alan Barona)
 ((Roshan.Thomas@thomsonreuters.com))