NAB 0.62% $19.53 national australia bank limited

who set the offer price

  1. 6,716 Posts.
    This article at the Australian

    http://www.theaustralian.news.com.au/business/story/0,28124,24632020-16941,00.html


    discloses that NAB placement was at a fixed price of $20.00. Who came up with this price ?( only a WHOPPING 23% discount to Wednesday's price )

    Why didn't they do a "bookbuild" to determine what the market was prepared to pay ? Just lazy ? The fact that the issue was several times oversubscribed, proves that that nice round number they set was TOO LOW.

    NAB's advisers, Goldman, Merrill and UBS, of course, told NAB to SET THE PRICE TOO LOW. Why wouldn't they ? They get a fat fee for zero risk on an oversubscribed offer. In fact, when they increase the size of the offer by 50%, THEY GET AN EVEN FATTER FEE. This is all at the cost to the shareholders, who issue more shares for less money and get more dilution.

    Thats an incompetent and shoddy performance by the NAB directors indeed.

 
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