Ansell's $400m placement yields strong returns

Company News

by Glenn Dyer

Big investors seized a lucrative opportunity on Tuesday as Ansell, the global leader in protective solutions, executed a $400 million placement. The move, aimed at financing the acquisition of Kimberley-Clark's PPE business, resulted in significant gains for shareholders across the board.

The day marked a substantial uptick in share value, benefiting all stakeholders amidst the company's strategic expansion plans. Despite a slight dip during the session, trading activity soared, with over 1.4 million shares changing hands—surpassing the previous week's volume.

Investor interest surged following Monday's announcement of the impending deal, prompting a trading halt. Tuesday saw Ansell swiftly resume trading, confirming the successful completion of the fully underwritten institutional placement.

Priced at $22.45 per share—a 6% discount from the April 5 closing price of $23.89—the placement attracted robust interest from both existing and new institutional investors. This enthusiasm translated into a notable surge in share prices, reaching heights not seen since the release of the company's 2022-23 annual results.

Initially opening at $26.27, shares peaked at $26.92—an impressive 14% increase—before retracing slightly. However, they managed to regain momentum, closing at approximately $25.43, marking a notable 6.4% gain from the previous week's close.

For savvy investors who participated in the placement, early profits were substantial, with millions of dollars potentially realized upon sale. Even for those opting to hold onto their shares, the promise of future gains remains enticing.

With 17.8 million shares issued in the placement, holders collectively enjoyed a paper profit of around $34 million by day's end. However, the positive spillover extended beyond placement participants, with other shareholders also reaping the benefits of Tuesday's surge.

Looking ahead, Ansell is set to launch its share purchase plan (SPP), with the aim of raising an additional $65 million. The SPP will be priced at the lower of the placement price or a 2% discount to the five-day volume-weighted average price of Ansell shares leading up to the closing date, scheduled for May 6, 2024.

As Ansell continues to navigate strategic growth initiatives, shareholders remain optimistic about the company's trajectory, buoyed by the success of the recent placement and anticipation surrounding the forthcoming SPP.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

Subscribe to our Daily Newsletter?

Would you like to receive our daily news to your inbox?