Marston's and GKN are next to raise cash


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.