Webjet Limited’s Shares Down After Posting The Retail Entitlement Offer

  • Nov 12, 2018 AEDT
  • Team Kalkine
Webjet Limited’s Shares Down After Posting The Retail Entitlement Offer

On 12 November 2018, Webjet Limited (ASX: WEB) opened its Retail Entitlement Offer with an invitation to participate in its 1 for 9 accelerated non-renounceable pro-rata entitlement offer for new Webjet ordinary shares at an issue price of $11.50 per New Share. Following this news, the share price of the company decreased by 2.341 percent as on 12 November 2018. 

Earlier in the month of November, the company announced that it is planning to raise approximately $153 million through an Entitlement Offer with an intention to use the net proceeds for the acquisition of DOTW Holdings Limited and transaction costs. Under the Retail Entitlement Offer, eligible retail shareholders in Australia and New Zealand have the opportunity to subscribe for 1 New Share for every 9 ordinary shares in Webjet at the price of $11.50 per New Share, which is the same price as the institutional investors who participated in the Institutional Entitlement Offer. The issue price of $11.50 per New Share is representing an approximately 9.9 percent discount to the theoretical ex-rights price of $12.77 on 2 November 2018

On 5 November 2018, the company entered into a binding agreement to acquire DOTW for an enterprise value of US$173 million (A$240 million). The cash consideration for the Acquisition is planned to be funded by the funds of the Entitlement Offer and A$102m of debt funding, including a new acquisition debt facility. In addition, approximately US$20m (A$28m) of new Webjet shares will be issued to continuing management shareholders and the private equity vendor of DOTW at an issue price of A$12.77 per share. The Record Date for eligibility in the Retail Entitlement Offer was 7 November 2018. The Retail Entitlement Offer will close on 22 November 2018, and the results of the entitlement offer will be announced on 27 November 2018. The new shares under the Entitlement Offer will be issued on 30 November 2018, and these new shares will start trading on ASX from 3 December 2018.

In the recently announced FY 2019 guidance of Webjet, the company announced that it is on track to deliver minimum A$110m underlying EBITDA for the existing businesses for FY 2019. In addition, based on the current AUD/USD exchange rate, the company is expecting the proforma EBITDA for the DOTW business for FY 2019 will be at least A$23 million. Assuming an acquisition close of 22 November 2018, Webjet expects DOTW to contribute incremental EBITDA of at least AUD$10m for FY 2019, pre-synergies. Webjet is expecting that the acquisition of DOTW is going to generate incremental cost and revenue synergies which include anticipated cost synergies of AUD$4m per annum and revenue synergies related to the distribution of WebBeds and DOTW’s unique directly contract hotel inventory through the various WebBeds platforms of A$10m per annum.

In the last six months, the share price of the company increased by 4.91 percent as on 9 November 2018, traded at a PE Ratio of 34.400x. WEB’s shares traded at $12.100 with a market capitalization of circa $1.49 billion as on 12 November 2018 (AEST 4:00 PM).


The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.



All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK