Most crucially is this: BoQ said everything it did was standard practice for other capital raisings and was ticked off by the ASX.
But BoQ is not a standard bank and this was definitely not an offer that gave much consideration to its 105,000 retail investors.
The crucial point is not much will happen from this point. The bank does not concede it has done anything wrong or that its timeframes were unusually short.
Its reasoning in pursuing a 10-day window was that it needed certainty of funding and to reduce the market risk of the transaction. Make of that what you will.
About 60,000 of its investors are small-time “mum and dad” shareholders who probably could be classed as inactive with fewer than 1000 shares. That still leaves about 45,000 retail investors who may have had an interest in buying more.
A letter detailing the offer to raise $682 million was sent to those investors on March 1 and the offer closed on March 10. There’s a weekend in the middle of that and Australia Post is not renowned for speed – so the 105,000 retail investors effectively had eight business days to receive it, read the 118 pages, and send it back with a cheque or deal with it electronically.
Some didn’t get it at all, but the bank rejects any notion that as many as 70,000 missed out.
The offer was sent priority mail in two-to-four day timeframes and BoQ said it has had complaints from people about the time frames but not many.
Even if it was done by email that’s pretty tight, but it did allow up until March 15 for late cheques.
Not surprisingly, the take-up rate was 50 per cent with some of those able to top up, bringing the total to about 60 per cent. The remainder went to institutions that underwrote it.
The takeup from institutions was 98 per cent. Big difference.
The damage is that the equity raising was done at a price of $7.35 and it’s now trading at $8.47, so anyone unable to take up the offer in that timeframe missed out on some substantial upside as well as potential growth.
Shareholder activist Stephen Mayne is agitating for a class action with Maurice Blackburn and said the actions of BoQ were “indefensible”.
“Nine days is a joke,” Mayne said.