Elders has bought back almost three quarters of its 98,000 hybrid securities as the farm services company tidies up its share register prior to recommencing ordinary dividend payments.
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Elders Finance Limited began buying back the hybrid stocks last month for $95 each - a seven per cent premium on their value prior to the offer opening.
The offer was due to close this week, but will extend until the end of the month.
At the same time an ordinary share rights issue to pay for the hybrid buy-up raised $77.4 million with the release of new shares in a one-for-four offer to existing stockholders.
Chairman Hutch Ranck took the opportunity to lift his total holding to 125,000 shares after paying $85,000 for a 25,000 share entitlement.
Other board members also gained extra stock.
However, not all the offer was taken up by existing shareholders, so underwriters Morgans Limited and Bell Potter Securities placed the residue with institutional and “sophisticated” investors to bring total proceeds to $102.4m.
Elders’ unusual hybrid stocks, originally issued as a premium share product for $100 each back in 2006, have been an uncomfortable part of the company’s listed equity base.
Despite having priority dividend status ahead of ordinary shares they have not paid a dividend since 2008 when Elders was left with a billion dollar debt after over-extending a flawed diversification strategy.
Elders managing director, Mark Allison, said smallholders who hoped to sell their hybrids but had not had time to organise their affairs had contacted the company seeking more time to offload them.
He said the (now debt-free) company’s buyback offer to simplify its capital structure - paying 20pc more than the hybrids had averaged in the past year - had offered important price liquidity for security holders.
With the bulk of the hybrids mopped up and out of the market the company is free to begin paying ordinary share dividends as planned later this financial year.
Elders ordinary shares have been trading between $3.80 and $3.63 since the rights issue and hybrid buy-up were announced a month ago.
Mr Allison thanked existing shareholders for their support for the entitlement offer and welcomed new shareholders to the company’s register.
Among the new shareholders is director Robyn Clubb who joined the board last year and has acquired 1200 shares, while other directors Ian Wilton and James Jackson lifted their totals to 100,000 and 37,500 respectively.
Mr Allison spent $1400 to lift his holding by about 4000 to 22,100 shares.
