By Stephen Mayne, tiny Multiplex shareholder
BRW‘s 2005 Rich List has declared that Australia has 21 billionaires, including four family empires but excluding the Murdochs. The magazine has only been on the streets for a few hours and we’ve already lost one. Multiplex supremo John Roberts is estimated to have lifted his net worth by $94 million to $1.1 billion over the past year, but the poor guy’s wealth is actually going down, not up, after yesterday’s sharemarket route.
The unexpected sale of a 12.5% stake in London’s biggest shopping centre development saw Multiplex shares tumble 45c to a record low of $3.16 yesterday – a far cry from the December 2003 float price of $4.05, which comprised $3.08 up front and a further 97c payment in December 2004.
There hasn’t been a more notorious placement lately than the $200 million Multiplex raised in December 2004 at $5.54 a share after a tour of the Wembley redevelopment in which everything was said to be travelling well.The institutions that bought the stock thought they were on a winner and at one point were collectively about $35 million in front when it peaked at $6.50 last year.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
At last night’s close, the buyers of those shares were $86 million underwater, while those that stumped up $1.2 billion in the UBS-managed float were an additional $263 million in the red. Meanwhile, the Roberts family’s 214 million shares were down to a valuation of $676 million.
Investors could reasonably expect that the Roberts family would do the right thing and compensate them for their losses. After all, the family offered a $50 million indemnity if any losses emerge on the Wembley contract, which is now forecast to merely break even. The shares were at a far healthier $4.61 when that offer was made last year and the company told the market: “This [$50 million] indemnity demonstrates the confidence of the Roberts family in both the Wembley project and in management’s ability to recover claims.”
Multiplex shares recovered 10c to $3.26 this morning after the company put out a statement denying the banks had forced the sale of its London shopping centre development. The company claimed it had “substantial cash at hand” and available credit lines of more than $400 million. Check out the latest Multiplex double-speak to the ASX here.