Elders Hybrids holders who have held the securities since they were first issued in early 2006 will be glad the experience is finally coming to an end. For all but a brief period they have been trading under par, sometimes by as much as 90%. Distributions are at the discretion of Elders directors and there have not been any since 2009.
Elders has now announced the securities will be “resold” on 30 March 2017. That is, Elders will sell holdings to a third party and in return, holders will receive the face value plus accrued distribution for the last twelve months which comes to $108.48.
The third party happens to be Elders Finance Pty Ltd which already owns 72.04% of the Elders Hybrids on issue. This holding was acquired via two buy-back offers in 2015 and 2016. When Elders announced an initial $30 million buy-back in August 2015 at $80 each, investors began to see light at the end of the tunnel. Speculation then turned to when the remaining securities would be redeemed. $100 million worth were purchased at $95 by the subsidiary in June 2016. This latest transaction will purchase the remaining 419,415 securities which are currently held by non-Elders holders.
Trading on the ASX will cease at the end of trading on 17 March 2017.