The Keepers [DAVIN] board approves follow-on offering plan

The Keepers [DAVIN 2.95 susp] board approves follow-on offering (FOO) plan to cure non-compliance with PSE’s minimum public ownership rule. The plan calls for the sale of 3 billion common shares, at between P2.00 and P2.50 per share.

DAVIN’s shareholders already approved the use of a FOO to correct the minimum public ownership problem that was created by the Cosco Capital [COSCO 5.20 0.39%] property-for-share swap with DAVIN, so there really isn’t much new here except for the price range and the update that the board is, in fact, moving forward with attempts to fix the situation that’s left DAVIN untradeable for four trading days and counting.

MB BOTTOM-LINE

The 3 billion shares to be sold in the FOO are about 24% of DAVIN’s outstanding shares (post-transaction, after COSCO gets 11.5 billion in return for its three subsidiaries), but only about 19.5% of DAVIN when the shares from the FOO are added to the post-transaction outstanding shares.

I feel like I basically nailed it when I predicted the size of the FOO back in May (“<20% of listed shares”), but I can’t take too much credit for my prediction because it’s the least that Lucio Co would have to sell to scrape himself just barely over the line required to lift the trading suspension. The spirits market is booming; why sell more of a quality asset than is required?

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