The Macquarie Bank (MQG.ax) SPP overview
On 29 October 2021 Macquarie announced a Share Purchase Plan for eligible shareholders to apply for up to$30,000 of MQG shares as part of its $1.5b Placement. The SPP is expected to close at 5:00 pm (Sydney time) on Friday, 26 November 2021 with all details here www.macquarie.com/SPP.
Macquarie have said the proceeds "raised from the Placement and the SPP will be used to provide additional flexibility to investing new opportunities where the expected risk adjusted returns are attractive, while maintaining an appropriate capital surplus".
The SPP is at the lower of$191.28 (being the issue price paid by institutional and sophisticated investors under the Placement, adjusted for the 1H22 Dividend (which placement applicants won’t get), and a 2%discount to the volume weighted average price of Shares traded on ASX during the five trading days prior to the Closing Date (26/11/21).
Should I get some?
When investors consider giving more money to an investment, they want to know that they will be getting good value for their hard-earned dollars.
But what is value to one investor, may not be to another. Just like beauty... it is always in the eye of the beholder. That is why it is always best to consider your own unique personal circumstances and how it relates any investments or financial matters.
Back to the Macquarie SPP...
It's always important to consider a whole host of factors, such as;
- how much is being raised relative to the existing market capitalisation,
- what the pricing mechanisms are, and do you think this if good or not,
- what they will do with the funds (is it to buy another business, will it be earnings accretive?),
- what is the quality of the management,
- what is the quality of the existing business,
- what are the fundamentals for the sector, and most importantly
- does this suit your own personal circumstances?
You hopefully have been able to answer these questions, and that should help you decide whether this is an appropriate investment top up or not.