Nuplex to raise CR funds on market

By GEORGINA BOND

Resins company Nuplex is using its $202 million purchase of Netherlands business Coatings Resins to boost its profile among international investors.

The firm is largely targeting overseas institutions with its capital-raising programme to fund the purchase of Coating Resins from Europe giant Akzo Nobel.

Nuplex is looking to raise about 30 per cent of the purchase price from selling about 11.5 million new shares.

Investors expect the new shares to sell for just under the Friday close of $5.08.

Forsyth Barr research analyst John Cairns said the acquisition seemed to be a good fit but, with 60 per cent of revenue coming from Europe, currency fluctuations could make earnings more volatile.

AMP Capital portfolio manager Stan Wilson said he expected more interest in Nuplex stock from Australian investors following the deal.

"It's clearly a bigger company and there will be more liquidity in the stock. That will pop up on the radar screen of some investors that haven't previously gone there."

The company's existing 62 million shares and its capital notes were placed in a trading halt yesterday.

This will remain until 10am tomorrow or an announcement by the company that the institutional bookbuild process is complete.

The acquisition, disclosed late on Friday, will lift group sales to $1 billion.

Nuplex, which started in 1956 as Auckland-based Floor Tiles and Parquet, is listed in New Zealand and Australia. But 92 per cent of shares are held here, and about 70 per cent are in the hands of small investors.

The top 10 New Zealand institutions and the top 30 Australian institutions were among those being targeted with the capital-raising programme.

Craig Brownie, manager of Bancorp, which is advising Nuplex on the deal, hopes a briefing to large investors today will encourage Australian institutions not on the register to participate in the stock placement.

He said Nuplex did not have a particularly strong institutional register so it would be looking to boost that through the private placement.

The placement is conditional on the deal closing and the approval of shareholders next month.

CR is a manufacturer of resins for coatings with 774 staff and operations in the UK, US, Brazil, Malaysia, Indonesia, Thailand and China.

Resins deal

* Last Friday, Nuplex says it will buy Netherlands business Coatings Resins for $202 million.

* It will issue 11.5 million new shares to raise 30 per cent of the purchase price.

* Investors expect the new shares to sell for just under the Friday close of $5.08.

* The company's existing 62 million shares are on a trading halt until 10am tomorrow or completion of the institutional bookbuild process.