Mirrabooka Launches $85M 1-for-7 Entitlement Offer at $3.06 per Share

Entitlement Offer Overview

Mirrabooka Investments Limited (ASX: MIR), a specialist listed investment company focused on small and mid-cap companies in Australia and New Zealand, has announced a 1-for-7 non-renounceable pro-rata entitlement offer priced at $3.06 per new share. The offer is designed to raise up to approximately $85 million, providing the company with additional capital to pursue its medium to long-term investment strategy.

The entitlement offer is open to eligible shareholders registered as of 7.00pm (Melbourne time) on 9 May 2025, with the offer period running until 5.00pm on 2 June 2025. Shareholders can subscribe for one new share for every seven shares held, with the option to apply for additional shares through a top-up facility, subject to board discretion and scale-back.

Pricing and Market Context

The issue price of $3.06 per share represents a 5% discount to the last closing price of $3.22 prior to the announcement and aligns closely with the average estimated pre-tax tangible net asset backing over the preceding month. This pricing reflects a cautious but confident approach by the board amid recent market volatility and a decline in share prices across many companies in Mirrabooka’s investment universe.

Mirrabooka’s portfolio, valued at approximately $625 million as of 30 April 2025, targets quality small and mid-cap companies with sustainable earnings and dividend growth potential. The company’s closed-end structure and fixed capital base are positioned as advantages in navigating uncertain market conditions, allowing a focus on long-term value creation without the pressures of fund inflows or outflows.

Dividend and Shareholder Benefits

In conjunction with the entitlement offer, Mirrabooka’s directors have declared their intention to pay a fully franked final dividend of 6.5 cents per share for the 2024/2025 financial year. Shareholders who participate in the offer, including those acquiring additional shares under the top-up facility, will be entitled to this dividend, subject to board approval at the time of the annual financial statements.

The new shares issued under the offer will rank equally with existing shares, ensuring that participating shareholders maintain their rights and benefits. The company has also confirmed that no brokerage, stamp duty, or other fees will be payable by shareholders subscribing for new shares under the offer.

Risks and Considerations

The offer booklet outlines a range of specific and general risks associated with investing in Mirrabooka, including market volatility, concentration risk, regulatory changes, and the inherent risks of investing in small and mid-cap companies. The company emphasizes that the offer is not underwritten, meaning the final amount raised will depend on shareholder participation.

Eligible shareholders are encouraged to carefully consider their investment objectives and seek professional advice before participating. The offer is non-renounceable, so entitlements cannot be traded or transferred, and any entitlements not taken up will lapse, resulting in dilution for non-participating shareholders.

Next Steps and Market Impact

Mirrabooka expects the new shares to commence trading on a deferred settlement basis from 3 June 2025 and on a normal settlement basis from 11 June 2025, subject to ASX approval. The company will dispatch holding statements shortly after allotment.

The capital raised will enhance Mirrabooka’s ability to selectively add to its portfolio in the months ahead, potentially capitalizing on market dislocations. Investors will be watching closely to see the level of take-up and the company’s subsequent investment activity, which will be key indicators of confidence in the current market environment.