Underwriting Termination Puts Identitii’s Rights Issue Capital Raise at Risk

Background and Regulatory Intervention

Identitii Limited, a fintech company listed on the ASX, has issued a supplementary offer document dated 20 February 2026 concerning its ongoing pro rata non-renounceable rights issue. This follows a declaration of unacceptable circumstances and final orders by the Takeovers Panel in relation to the rights issue process. The Panel's intervention stems from an application by Mitchell Asset Management, highlighting procedural concerns that have led to significant amendments in the offer's conduct.

Key Changes to the Rights Issue

In compliance with the Panel's orders, Identitii has reopened the rights issue until 2 March 2026, providing shareholders with an extended window to participate. Importantly, shareholders who had already accepted the offer before 10 February 2026 are now granted withdrawal rights, allowing them to rescind their acceptance if they choose. This move aims to ensure fairness and transparency following the Panel's findings.

Additionally, the underwriting agreement, which previously guaranteed the subscription of shares, has been terminated by the underwriter. This termination means no securities will be issued to the underwriter, and the company will not issue options as underwriting fees. This development introduces a new dynamic to the capital raising effort, potentially increasing uncertainty around the final subscription level.

Clarifications on Shortfall Offer and Allocation

The supplementary document clarifies that the directors will not exercise discretion over shortfall share allocations except to ensure compliance with legal and ASX listing requirements. This contrasts with earlier terms where directors had broader discretion. The allocation process will prioritise existing shareholders on a pro-rata basis before considering applications from new investors, aiming to maintain equitable treatment among shareholders.

Impact of Substantial Shareholder Actions

Notably, Mr Cameron Beavis, a substantial shareholder and director-related party, has indicated his intention to withdraw his acceptance of the offer under the newly granted withdrawal rights. Mr Beavis’s withdrawal, coupled with the underwriting agreement termination, may influence the overall capital raised and the company’s future shareholder composition.

Looking Ahead

While the fundamental terms of the rights issue remain unchanged, these procedural amendments and regulatory interventions introduce fresh considerations for shareholders and potential investors. The reopening of the offer and withdrawal rights provide a second chance for shareholders to reassess their participation under clearer conditions. However, the absence of underwriting support raises questions about the ultimate success of the capital raise and Identitii’s near-term financial flexibility.