Caltex Share Offer Oversubscribed Despite Institutional Demand Hesitation

Strategic Insights -

Pioneer International's Caltex share offer has received over 90 million shares, with more than 65% of those shares being purchased by retail investors. Despite weaker than expected institutional demand, the share offer exceeded expectations, with retail investors buying 45.1 million shares, and institutions collecting the remaining 30 million. The price of Caltex shares has been set at $4.15 per share for institutions, 10c below the current market price, while retail investors will pay a relatively cheap $4 per share.

Key Takeaways:

  • The Caltex share offer received over 90 million shares, with more than 65% of those shares being purchased by retail investors.
  • Retail investors purchased 45.1 million shares, while institutions collected the remaining 30 million shares.
  • The price of Caltex shares has been set at $4.15 per share for institutions, 10c below the current market price.
  • Retail investors will pay a relatively cheap $4 per share.
  • Pioneer, the former owner of the 90 million shares, will receive $365 million, $35 million less than initially forecast.
  • Priority applicants, including existing Caltex shareholders, employees, and Pioneer shareholders, were able to have their share orders filled in full.
  • Other retail investors collected 45.1 million of the 70 million shares they applied for.
  • Institutions expected stronger demand from US investment banks, but foreign investment banks and fund managers made up only 20% of institutional shares.
  • US investment banks were the largest offshore buyers, but still only made up a small portion of the total institutional demand.
  • The float had expected strong demand from US investment banks, but institutions had not bid as high as expected.
  • Mark Warburton from Macquarie Underwriting admitted institutions had not bid as high as expected and that there were several institutions who missed out because they bid too low.

Statistics:

  • $365 million: The amount Pioneer will receive for the sale of the Caltex shares.
  • $35 million: The amount less than initially forecast that Pioneer will receive for the sale of the Caltex shares.
  • 45.1 million: The number of shares purchased by retail investors.
  • 30 million: The number of shares collected by institutions.
  • $4.15: The price of Caltex shares for institutions.
  • $4: The price of Caltex shares for retail investors.
  • 20%: The proportion of institutional shares made up of foreign investment banks and fund managers.
  • $4.50: The early forecasted price of Caltex shares per share.

Sources:

  • The Daily Telegraph
  • Macquarie Underwriting
  • Pioneer International
  • Caltex