Macquarie Puts Hard Word On Shareholders For $100m

Sydney Morning Herald

Thursday May 18, 2006

Lisa Murray

AFTER collecting $700 million from institutions, Macquarie Bank now expects to raise up to $100 million from retail investors via a share purchase plan.

Its chief financial officer, Greg Ward, said yesterday the money would be used to fund international expansion.

"We have experienced unprecedented international growth," he said. "With growth expected to continue, we wish to maintain our strategic flexibility to take advantage of the excellent opportunities available to the bank."

Fund managers agreed to pay $66 a share for their new stock, which will start trading on the ASX on May 23. Mr Ward said the stock was sold at a 2.7 per cent discount to its last closing price and the bank was "relatively happy with that".

Retail shareholders will also pay $66 for up to $4950 worth of shares but won't have to pay brokerage costs.

Mr Ward said the bank expected to raise $20 million to $100 million from the retail offer.

Macquarie is also sweetening its dividend reinvestment plan, reintroducing a 2.5 per cent discount for shares bought under the scheme.

The discount comes into play this year to encourage investors to spend their dividend cheques on new shares.

Macquarie fell 47c to $69.18 as the impact of the extra shares was digested.

Brokers upgraded their forecasts for the bank after it announced this week a 13 per cent jump in net profit to $916 million for the year ended March 31.

The result was held back by a slower second half because of a significant drop in performance fees from the bank's specialist funds.

Investors, however, were buoyed by the unusually upbeat outlook statement and the prospect of a string of deals this year.

One deal on the horizon is the takeover of the debt-ridden Eurotunnel, probably in conjunction with Goldman Sachs.