AVADA Group (ASX: AVD) sees surge in share price on Wednesday following stake sale news

2 min read | March 20, 2024 01:22 AM EDT | By Team Kalkine Media

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AVADA Group (ASX: AVD) sees surge in share price on Wednesday following stake sale news — Image source: shutterstock

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Shares of AVADA Group Ltd (ASX: AVD), an Australian traffic management firm, soared over 28% on Wednesday to AU$0.64 apiece(at 2:11pm AEDT). This surge came in response to reports indicating that the company's second-largest shareholder, Regal Funds Management, had divested its stake in AVADA.

Meanwhile, the benchmark S&P/ASX 200 index (AXJO) saw a modest decrease of 0.10% to 7,695 points.

Reason behind the surge in share price

According to the Australian Financial Review (AFR), Regal Funds Management, a component of Regal Partners (ASX: RPL), had offloaded its 15.4% interest in AVADA Group to Pacific Equity Partners, based in Sydney.

The stake sale reportedly took place at an issue price of A$0.65 per share, representing a substantial 31.3% premium over AVADA's closing price of A$0.495 on Tuesday.

Notably, Pacific Equity Partners also have ownership of Altus Traffic. It is one of the largest full-services traffic management business in Australia.

The news of the stake sale and the involvement of a well-established equity firm like Pacific Equity Partners has evidently sparked investor optimism, reflected in the significant surge in AVADA's share price. This development marks a notable milestone for AVADA Group Ltd and could potentially signal positive growth prospects and strategic shifts within the company's ownership structure.

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