The Takeovers Panel has declared unacceptable circumstances in Identitii Limited's recent rights issue, ordering supplementary disclosure and a reopening of the offer to protect shareholder interests and market integrity.
- Rights issue pricing and timing criticised for discouraging shareholder participation
- Underwriter Beauvais Capital’s potential control increase deemed problematic
- Panel mandates supplementary disclosure and reopening of the rights issue
- Shareholders granted withdrawal rights after initial participation
- Issuance of securities to underwriter now requires shareholder approval
Background to the Rights Issue
Identitii Limited (ASX – ID8), a financial services company, announced a one-for-two pro-rata non-renounceable rights issue in December 2025, aiming to raise approximately $2.88 million by issuing around 411 million shares at $0.007 each. The offer closed on 19 January 2026, with an underwriting agreement in place with Beauvais Capital Pty Ltd, trustee for The Reginald Hector Trust, which could increase its voting power from just under 30% to nearly 50%.
Panel’s Declaration of Unacceptable Circumstances
The Australian Takeovers Panel has declared the circumstances surrounding this rights issue as unacceptable. The Panel highlighted several concerns – the offer price was not sufficiently discounted to encourage shareholder participation, the timing over the year-end period likely reduced engagement, and the directors had broad discretion over shortfall allocations without clear priority rules. Crucially, the offer document lacked important disclosures, including the underwriter’s intentions if it gained control.
Implications for Control and Market Integrity
The Panel concluded that the underwriting arrangement could allow Beauvais Capital to acquire control or a substantial interest in Identitii in a manner inconsistent with an efficient, competitive, and informed market. This raised concerns about potential shifts in control without adequate transparency or shareholder consent, undermining market confidence.
Panel’s Orders and Next Steps for Identitii
To remedy these issues, the Panel ordered Identitii to issue supplementary disclosure clarifying the underwriting arrangements, the underwriter’s related-party status, and intentions if control is obtained. The rights issue must be reopened for at least seven days, allowing shareholders a further opportunity to participate with full information. Additionally, shareholders who already participated will be offered withdrawal rights. Importantly, any securities issued to the underwriter now require shareholder approval, with the underwriter and associates excluded from voting.
Looking Ahead
Identitii’s management faces the challenge of restoring shareholder confidence and navigating the reopening of the rights issue under these new conditions. The outcome will be closely watched by investors and regulators alike, as it sets a precedent for how underwriting arrangements and control issues are handled in capital raisings on the ASX.
Bottom Line?
Identitii must now rebuild trust through transparency and shareholder engagement as it reopens its rights issue under regulatory scrutiny.
Questions in the middle?
- Will the supplementary disclosure satisfy shareholder concerns and encourage participation?
- What are Beauvais Capital’s true intentions if it gains control of Identitii?
- How will the market react to the potential dilution and control changes following the reopened rights issue?