GLS retail offer opens after strong institutional demand

Retail investors offered one new share for every two held

L1 Global Long Short Fund Limited (ASX:GLS) has opened the retail component of a capital raising that could bring in up to approximately $381.7 million. Eligible shareholders can subscribe for one new share for every two held at $1.76 per share, with the offer price set at approximately the company’s pre-tax net tangible asset backing as at 2 October.

The offer is non-renounceable, meaning entitlements cannot be traded or transferred and any portion not taken up will lapse without compensation. Retail investors can subscribe for all or part of their entitlement, while those who take up their full allocation can apply for additional shares through a discretionary top-up facility.

Institutional demand has absorbed the first $100.9 million

The institutional component closed on 7 October after raising approximately $100.9 million. The booklet breaks that figure into about $30.8 million from institutional entitlements and a further $70.1 million from the institutional shortfall offer, following strong support from existing and new shareholders.

That result followed the institutional entitlement raising, in which L1 Group’s approximately $70.1 million entitlement was placed with new shareholders while L1 Capital founders Mark Landau and Raphael Lamm took up their full entitlements. The company says binding wholesale bids for the retail shortfall offer exceeded the $381.7 million available to existing retail shareholders, although the amount ultimately allocated to institutions will depend on retail take-up.

Offer remains exposed to retail participation

The entitlement offer is not underwritten. If retail shareholders do not subscribe for their allocations, any remaining shares may be offered to wholesale investors under the retail shortfall offer, with allocations and any scale-backs at the company’s discretion. The board may also conduct an institutional placement at the same $1.76 price, subject to investor demand and available placement capacity under ASX Listing Rule 7.1.

If fully subscribed across the retail entitlement, top-up and shortfall components, GLS expects total shares on issue to rise from 548.5 million at the record date to approximately 822.8 million. The proceeds are intended to be invested in line with the fund’s existing investment strategy; the filing does not specify a separate acquisition or project for the capital.

The $1.76 price will be tested against market value

The retail offer is scheduled to close at 5.00pm Sydney time on 23 October, with the results expected on 27 October and new shares expected to begin normal trading on 2 November, subject to ASX approval. During the offer period, GLS plans to publish net tangible asset backing updates twice weekly and on each of the final three offer days.

That cadence matters because the offer price is fixed while both the market price and NTA backing can move. Shareholders therefore face a straightforward but important comparison: whether subscribing at $1.76 remains attractive relative to the prevailing GLS share price and the fund’s updated asset backing when the offer closes.