Aveva leads the way in biggest fundraising of 2020

UK-based FTSE 100 information technology giant Aveva announced the terms of a £2.8bn rights issue on 6 November 2020, in what is set to be the biggest secondary fundraising of 2020.

The rights issue price per share is set at £22.55, a discount of 45.8% to the closing price on 5 November. Aveva has also confirmed an interim dividend of 15.5 pence per share, which will be adjusted ‘to reflect the bonus element of the rights issue.’

Bucking the recent trend towards US bidders sweeping up UK target companies, the fundraising, which is fully underwritten by J.P. Morgan Securities plc and Numis Securities Limited, is being carried out to partly fund the British company’s acquisition of rival California-based data software and services company OSIsoft. The transaction, which was confirmed on 25 August, is expected to ‘strengthen Aveva’s position as a global leader in industrial software,’ with a combined revenue of around £1.2bn.

The fundraise will only go ahead once the company has gained shareholder approval of the acquisition and rights issue at a general meeting to be held on 24 November. French company Schneider Electric SE, which acquired Aveva via a reverse takeover in 2017 and now holds around 60% of its issued share capital indirectly, has already provided an irrevocable undertaking to vote in favour of both the acquisition and the fundraise.

Aveva’s rights issue announcement follows a spate of high value equity fundraisings, including a £2bn cash box placing and retail offer announced by Compass Group in May and, more recently, a £2bn rights issue announced by struggling aerospace engineering group Rolls Royce (see also Rolls-Royce taps shareholders for £2bn rescue).

More money has been raised by secondary offers in 2020 than in the past ten years, as companies reach out to shareholders to both offset the financial impact of the pandemic and make the most of post-pandemic acquisition opportunities. With seven weeks left of the year, total funds raised to date are already up 62% on aggregate secondary fundraising values in 2019 (see our recent trend reports for more on Coronavirus (COVID-19)—trends in secondary equity fundraisings and secondary offerings in 2019).