Australian Unity Prices $120M Equity Raising at $80 per New MCI
Australian Unity Limited has launched a $120 million equity raising through a non-underwritten entitlement offer and placement, aiming to strengthen its balance sheet and support strategic acquisitions.
- Non-underwritten 1-for-4 pro rata entitlement offer of mutual capital instruments
- Concurrent placement to wholesale investors targeting $100 million
- Offer price set at $80 per new MCI, a 5% discount to adjusted market price
- Proceeds primarily to reduce gearing and fund Plena Healthcare acquisition
- Entitlement offer opens 2 October and closes 14 October 2025
Equity Raising Initiative
Australian Unity Limited has announced a significant capital raising initiative designed to bolster its financial position and support ongoing growth ambitions. The company is conducting a non-underwritten 1-for-4 pro rata entitlement offer of mutual capital instruments (MCIs) alongside a concurrent placement targeting wholesale investors. Together, these efforts aim to raise approximately $120 million.
Strategic Use of Proceeds
The majority of the funds raised will be directed towards reducing the company’s gearing, a move that should enhance financial flexibility and resilience. Additionally, a portion of the proceeds will be allocated to meet further acquisition payments related to Plena Healthcare, underscoring Australian Unity’s commitment to expanding its portfolio in the healthcare sector. Remaining funds will support general corporate purposes, providing the company with operational agility.
Offer Details and Pricing
The offer price for both the entitlement offer and placement is set at $80 per new MCI, representing a 5% discount to the cash dividend-adjusted closing market price as of 23 September 2025. This pricing reflects a running yield of 6.25% per annum on a cash basis, or 8.93% when grossed up for imputation credits, making it an attractive proposition for investors seeking income with capital growth potential.
Participation and Timetable
Eligible MCI holders in Australia and New Zealand as of 29 September 2025 will be invited to participate in the entitlement offer, which opens on 2 October and closes on 14 October 2025. Investors can take up all, part, or none of their entitlement, with the option to apply for additional MCIs subject to scale back. Notably, the company’s Chair, Group Managing Director, and Chief Financial Officer have committed to fully participate in the offer, signaling confidence in the capital raising.
Market Implications
This equity raising is a clear signal of Australian Unity’s proactive capital management strategy amid a competitive financial services environment. By strengthening its balance sheet and securing funds for strategic acquisitions, the company positions itself to navigate future challenges and opportunities with greater financial stability. However, the non-underwritten nature of the entitlement offer introduces some uncertainty regarding the final amount raised, placing emphasis on investor appetite and market conditions in the coming weeks.
Bottom Line?
Australian Unity’s capital raise sets the stage for enhanced financial strength but hinges on investor uptake amid market uncertainties.
Questions in the middle?
- Will the non-underwritten entitlement offer fully subscribe to the targeted $101 million?
- How will the equity raising impact Australian Unity’s credit metrics and cost of capital?
- What are the next steps and timing for the Plena Healthcare acquisition payments?
