Super Cheap Bids To Be Big Outdoor
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Super Cheap Auto Group is to expand deeper into the & #160;outdoor leisure sector with the & #160; & #36;54 million purchase of rival operator, Ray's Outdoors.Super Cheap, which went into a trading halt yesterday, revealed the deal in a statement to the ASX & #160;of an & #160; & #36;86 million fund raising.Super Cheap is buying Ray's Outdoors to give its & #160;BCF (Boating Camping Fishing) business more bulk and a greater market share. & quot;The company has the capital and systems to accelerate the growth of the business, & quot; Super Cheap CEO, Peter Birtles said in the statement.He said Ray's Outdoors, which has current annual sales of around & #36;130 million, will be merged with the BCF Boating Camping and Fishing business to create a market leading Australian Outdoor Leisure Retailer with two distinct brands, operating 103 stores with combined annualised sales of approximately & #36;400 million.Mr Birtles said there was the & #160;potential to grow the combined BCF/Ray's Outdoors business to around 160 stores and & #36;600 million in annual sales and with potential back office cost savings.Ray's Outdoors has a network of 38 stores in five states.It has been & #160;in operation for over 50 years, has a number of privately branded product ranges such as Wild Country, Outdoor Expedition and Classic Outdoor, specifically designed for Australian conditions.Super Cheap will pay for Ray's Outdoors with & #36;52.5 million in cash and & #36;1.5 million in shares placed with the vendor. It expects the transaction to be completed by the end of next month.Super Cheap said the transaction would be equity-funded with an underwritten institutional placement to raise & #36;76 million, and a non-underwritten share purchase plan to raise another & #36;10 million.The placements will be at & #36;4.80 per new share, compared with the & #36;5.07 closing price last Friday.The institutional side of the fund raising was expected to be completed overnight, with the company's shares cleared for trading this morning.Super Cheap said the & #160;extra & #36;32 million raised by the issue will & #160;be used to & #160; & quot;fund its capital expenditure and working capital requirements and to increase its financial flexibility & quot;.There was a & #160;fully underwritten institutional placement of 15.9 million new shares at a price of & #36;4.80 per share to raise & #36;76.32 million.Super Cheap said its & #160;major shareholder, SCA FT, & quot;will not participate in the placement, with a view to increasing the Company's free float. No shareholder approval is required or will be sought in relation to the institutional placement. & quot;Existing Super Cheap Auto Group shareholders with a registered address in Australia and New Zealand on the record date for the SPP (30 April 2010) will have the opportunity to acquire up to approximately & #36;10,000 worth of new shares at a price of & #36;4.80 per share under a non-underwritten share purchase plan. & quot;If applications for new shares under the SPP exceed & #36;10 million, the Company may, in its absolute discretion, undertake a scaleback to the extent and in the manner it sees fit. & quot;
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