Marston's and GKN are next to raise cash

THE WAVE of companies seeking to raise fresh capital from shareholders showed no sign of abating yesterday as engineer GKN and pub group Marston&rsquo;s both announced rights issues.<br /><br />GKN aims to raise &pound;423m, while Marston&rsquo;s is asking the market for &pound;176m. GKN&rsquo;s 50p offer price represents a 39 per cent discount to Wednesday&rsquo;s closing price.<br /><br />The aeroplane and car engineer said the cash will reduce its reliance on debt refinancing and allow it to &ldquo;sidestep more onerous covenants&rdquo;.<br /><br />It added the cash would also allow it to take advantage of the opportunities for growth that the backdrop in its end markets continues to present.<br /><br />The company &ndash; which is shedding nearly 6,000 jobs worldwide as it battles the slowdown in the automotive and aerospace sectors &ndash; also announced that sales for the five months to 31 May totalled &pound;1.8bn, a 10 per cent decrease year-on-year.<br /><br />Marston&rsquo;s plans to offer 298.8m new shares at 59p each, a 40 per cent discount to Wednesday&rsquo;s closing price. The pub operator, led by chief executive Ralph Findlay, said it will spend &pound;140m of its new capital to accelerate its strategy of acquiring and developing new-build pubs.<br /><br />It will use the remainder to buy pubs from rivals or to repay debt, if it can buy it back at attractive prices.<br /><br />Marston&rsquo;s is the second pub group this week to launch a cash call, after Punch Taverns on Monday said it planned to raise &pound;375m.<br /><br />But RBS Hoare Govett chief executive Paul Nicholls said that there was no sign that investors were tiring of the weekly fundraising launches.<br /><br />&ldquo;I think investors are still keen to help companies raise money, but the story accompanying the issue is going to be increasingly important,&rdquo; he said.<br /><br />Marston&rsquo;s shares sunk by 16 per cent to close at 118p yesterday, while GKN closed 0.4 per cent down at 119.5p.<br /><br /><strong>UK-LISTED CASH CALLS </strong> TOP 20 BY VALUE &nbsp;&nbsp;&nbsp; June 2008 - June 2009<br /><br /><strong>1&nbsp;&nbsp;&nbsp; </strong>HSBC<strong> &nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; &pound;12.5bn<br /></strong><strong>2&nbsp;&nbsp;&nbsp; </strong>Royal Bank of Scotland<strong>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &pound;12bn<br /></strong><strong>3&nbsp;&nbsp;&nbsp; </strong>Rio Tinto<strong>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &pound;9.5bn<br /></strong><strong>4&nbsp;&nbsp;&nbsp; </strong>Imperial Tobacco<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &pound;4.9bn<br /></strong><strong>5&nbsp;&nbsp;&nbsp; </strong>Xstrata<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &pound;4.2bn<br /></strong><strong>6&nbsp;&nbsp;&nbsp; </strong>Lloyds Banking Group<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &pound;4bn<br />7&nbsp;&nbsp;&nbsp; </strong>Standard Chartered<strong>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &pound;1.8bn<br />8&nbsp;&nbsp;&nbsp; </strong>Wolseley<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &pound;1.05bn<br />9&nbsp;&nbsp;&nbsp; </strong>Land Securities<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; &pound;755m<br />10&nbsp; </strong>British Land<strong>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &pound;740m<br />11&nbsp; </strong>3i Group<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &pound;732m<br />12&nbsp; </strong>Liberty International<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; &nbsp; &nbsp;&nbsp; &pound;600m<br />13&nbsp; </strong>Hammerson<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &pound;584.2m<br />14&nbsp; </strong>Segro<strong>&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &pound;500m<br />15&nbsp; </strong>GKN<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &pound;423m<br />16&nbsp; </strong>Premier Foods<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &pound;404m<br />17&nbsp; </strong>Punch Taverns<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &pound;375m<br />18&nbsp; </strong>William Hill<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &pound;350m<br />19&nbsp; </strong>DSG International<strong>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &pound;310.6m<br />20&nbsp; </strong>Greene King<strong>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &pound;208m<br /><br />SARA HALE<br />MD, HOARE GOVETT<br /></strong>The Marston&rsquo;s rights issue is fully underwritten by RBS Hoare Govett and JP Morgan Securities.<br /><br />The Hoare Govett team is headed up by its managing director Sara Hale, whose other clients include Whitbread, Rolls-Royce and Cable &amp; Wireless. The firm is a long-standing adviser to Marstons.<br /><br />Durham University educated Hale has been with Hoare Govett for over ten years, prior to which she worked in the Corporate Broking department of HSBC Investment Bank.<br /><br />Hoare Govett are also co-managers and underwriters on the GKN cash call, working closely with JP Morgan on both initiatives. <br /><br />Hoare Govett chief executive Paul Nicholls and director John Fishley are leading this fundraising.<br /><br />Nicholls has over 30 years experience in corporate&nbsp; broking, mainly with James Capel and UBS Warburg, and he joined Hoare Govett three years ago. <br /><br />He is responsible for many of the senior institutional and&nbsp; corporate relationships in RBS Hoare Govett, including Imperial Tobacco, Rolls-Royce, Tate &amp; Lyle and Premier&nbsp; Foods.<br /><br />His relationship with GKN stretches back to his days with Warburg.<br /><br />Recent work includes rights issues for Rio Tinto, Bowleven, Informa&nbsp; and Amlin Insurance.