Kelsian plunges to bottom of ASX on discounted raising to fund U.S. buy

Kelsian

17/03/2023 04:28

March 17 (Reuters) - Shares of Kelsian Group  KLS.AX 
fell more than 11% on Friday, on track for their worst day in
nearly seven months, after the Australian transit operator
undertook a discounted placement to fund its $325 million
acquisition of a U.S.-based bus operator.
    Kelsian said on Wednesday it would fund the acquisition of
All Aboard America! Holdings via an equity raising of A$281
million ($188.35 million) and A$226 million debt.
    Shares of the Australian tour operator, which were halted
from trading on Tuesday, fell as much as 11.6% to A$5.615 after
Monday's near 4% drop, while the ASX 200 benchmark  .AXJO  was
trading about 0.3% higher.  .AX 
    The stock, which has declined about 12% so far in the week,
was the biggest loser on the benchmark index.
    Through the capital raise, Kelsian said it raised A$233
million from shareholders at an offer price of A$5.55 apiece,
which implies a discount of 11.4% to the stock's last close on
March 13.
    Cameron McDonald, an analyst at E&P Financial, believes the
acquisition is an "appropriately sized step out acquisition with
a considered fund mixing", especially taking into consideration
the company's previously flagged desire to expand its footing
internationally.
    Analysts at UBS said in a note published on Wednesday that
the acquisition paved the way to a fresh offshore market, which
will provide Kelsian with exposure to growth sectors like
technology and oil and gas.    
    
($1 = 1.4919 Australian dollars)

 (Reporting by Roushni Nair in Bengaluru; Editing by Subhranshu
Sahu)
 ((Roushni.Nair@thomsonreuters.com;))