GPT’s Share Price Set to Rise on $800 Million Capital Raising

Today, GPT Group [ASX:GPT] entered a trading halt before launching an $800 million share placement on Wednesday.

Before the trading halt, GPT’s share price was trading at $6.33 a share.

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GPT’s share placement agreement

GPT will include a non-underwritten security purchase plan (SPP) to raise $50 million, for a consideration of $531 million funded through equity raising, at an offer price of $6.07 per new security.

This is a 4.1% discount on the closing price of $6.33, and 44% on this financial year’s distribution yield, as reported the Australian Financial Review.

According to the term sheet, the capital raised from the placement will be used to pay for the acquisition of a 25% interest in harbourside purchases Darling Park 1 & 2 and Cockle Bay Wharf. This will ‘provide certainty of funding for GPT to deliver on its strategy to grow its office & logistics portfolio.

Overseeing GPT’s deal will be Macquarie Capital and UBS.

GPT’s Chief Executive Officer, Bob Johnston, said:

The Group is excited by this compelling Sydney office investment opportunity. Darling Park provides the group with an enhanced exposure to the strong Sydney office market via modern, high quality assists and access to future growth through the Cockle Bay Park development.

GPT’s share price outlook for 2019

GPT, together with with Wholesale Office Fund (GWOF), will hold a combined 75% interest in Darling Park 1 & 2.

GPT’s focus will remain on its growth strategy, with the funding with GPT’s development pipeline going to its office and logistics sectors.

This is something Mr Johnston said would ensure the continued capacity to explore more investments opportunities, as well as maintaining a strong balance sheet.

And if this continues alongside with healthy investor reaction, then GPT’s share price could see further positivity.

More to come.


Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

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