qbe-issues-new-shares-in-a-difficult-market

QBE issues new shares in a difficult market

The Australian insurance company raises A$406 million in an overnight placement to fund its US acquisitions. Shares trade lower Wednesday.
February 28, 2007
AustraliaÆs QBE Insurance Group launched a placement of new shares on Tuesday night raising a quick A$406 million $315 million from institutional investors. The deal, expected to price flat to TuesdayÆs close of A$33.62 due to the companyÆs strong following, ended up pricing at a 3.4% discount or about 2% ex-dividend with investors paying A$32.48 per share.

The company issued 12.5 million shares representing 1.5% of issued capital or about three-and-a-half dayÆs worth of trading. ôThis was a relatively small deal and should have been easy to place but nobody expected it would run into the troubles that were experienced on the global market on Tuesday,ö says a source familiar with the deal.

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