The local market is a busy scene

Dealmaking is widespread at the moment as corporates take advantage of opportunities being dished up

- 

For enthusiasts of exciting corporate transactions, last week was a big one on the local market.

It included everything from new listings to substantial buyouts and mergers, with some sweet capital-raising sprinkled on top.

Thanks to ASP Isotopes and Vukile Property Fund, we have two examples of raising capital that are completely different in nature.

First is the accelerated bookbuild by Vukile Property Fund to raise capital for acquisitions in Iberia and South Africa. As has been the recent trend in the property sector, this raising was met with strong demand by the market. The company initially aimed to raise R2-billion, but investors were so hungry for the shares that Vukile raised a cool R2.65-billion, or about 10% of its market cap. It managed this at a significant discount of 4.3% to the 10-day volume-weighted average price (VWAP).

This highlights one of the risks facing retail investors in a hot property market: exclusion from accelerated bookbuilds. This capital gets raised from institutional investors only, and usually at a small discount to the current market price. Although it’s great that the capital will be used for growth, the best returns are reserved for the investors who can buy shares at a discount when these raises happen on the market.