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Market Analysis Latest ASX News

Infratil [ASX:IFT] Announces NZ$850 Million Equity Raise for One NZ Acquisition

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By Mahlia Stewart, Wednesday, 07 June 2023

Infratil raises AU$774 million to help fund the acquisition of a 49.9% stake in One NZ, taking its ownership to 9.90%.

New Zealand-based infrastructure investment company, Infratil [ASX:IFT] seeks full control of wireless company One NZ, and will be launching an equity raise of NZ$850 million (AU$774 million) to do so.

The investing group has reached an agreement with Brookfield Asset Management to acquire Brookfield’s 49.95% stake in One New Zealand (One NZ) for NZ$1.8 billion, increasing Infratil’s ownership from 49.95% to 99.90%.

Due to the launch of the equity raise, IFT was halted in trade on the ASX today, paused at $9.20 a share.

The stock has increased by 17% so far in 2023 and continues to hold strong in wider markets:

ASX:IFT Infratil stock chart news 2023

Source: tradingview.com

 

Infratil angles for One NZ via equity raise

Infratil has said it will seek to raise NZ$850 million (AU$774 million) to partially finance the acquisition of a remaining 49.9% stake in One NZ, upping its ownership of the group to 99.90% and thereby taking full control of the entity.

One NZ was once known as Vodafone NZ and remains the biggest telecommunications and wireless company in the country, accounting for 40% of the mobile market share back in 2020.

Keen to capitalise on this opportunity, Infratil has reached an agreement with Brookfield Asset Management, together with its affiliates, ‘Brookfield’, to acquire the 49.95% stake which had belonged to the asset management company.

Scooping up these remaining shares will set Infratil back by NZ$1.8 billion. However, the acquisition will be funded via the NZ$850 million equity raising, but also by the company’s existing cash reserves and use of debt facilities.

The acquisition values One NZ at an enterprise value of NZ$5.9 billion and an implied EBITDA (earnings before interest, tax, depreciation, and amortisation) multiple of 9.8x for Infratil’s increased stake and a normalised EBITDA multiple of 9.3-times.

Infratil has selected BS and Barrenjoey as the joint underwriters and bookrunners for funding the acquisition process, a raising that will be broken into two parts.

Part one consists of a fully written placement of NZ$750 million, to occur today only, with settlement due next Tuesday.

The placement will comprise the issue of 81.5 million new shares, representing approximately 11.2% of existing issued capital.

The offer is priced at NZ$9.20 — the same price as Infratil’s shares today – an 8.9% discount to the close on Tuesday of NZ$10.10 and a 7.9% discount to the five-day average.

Part two is a non-underwritten retail share offer to raise NZ$100 million, a retail offer that will run until 27 June.

Shareholders will be able to subscribe for up to a maximum NZ$80,000 and AU$45,000 of new shares under the retail offer, free of any brokerage, commission, and transaction costs.

Jason Boyes, Infratil’s CEO, said:

‘Further investment in One NZ is strategically and financially compelling for Infratil and our shareholders. One NZ has had strong momentum following the recent rebrand and other business transformation initiatives that are ongoing, with further upside to be realised. Full control of One NZ provides business plan and capital allocation flexibility and a renewed focus on long term value creation.

‘Beyond One NZ, we continue to see exciting near-term opportunities for investment across our portfolio, in particular across our digital and renewables platforms.’

Post equity raise and once the completion of the One NZ transaction is finalised, Infratil’s wholly owned group gearing is expected to be 18.7% with NZ$927.7 million of available liquidity.

 

Tik-stocks and the mania of 2024

Did you know that previous no-name and inconspicuous small-cap Stemcell United [ASX:SCU] catapulted 8,284% in two days on a medicinal cannabis venture?

It wasn’t so insignificant then, and it happened so suddenly.

Cann Group [ASX:CAN] also jumped 30 cents to $4 in a manner of months on another viral explosion.

If you know where the next burst of mania is going to be, you can really take advantage of the hype.

This is why our experts bring you Tik-Stocks, a sort of cousin to ‘meme stocks’ — you know, those stocks that go through the roof based on social media coverage.

These stocks can become overvalued in the blink of an eye. This means you need to time them right.

Intrigued? Click here for more.

Regards,

Mahlia Stewart,

For Money Morning

 

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Mahlia Stewart

Mahlia’s Premium Subscriptions

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All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

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