Corporate lawyer and company director Adam Schwab writes:


Disclosure column

noted today that Australia’s
childcare king, Eddie Groves,
has decided not to stump up for ABC’s recent $600 million capital raising
(arranged by ABC’s favourite broker, Austock). This comes not long after
and his wife Le Neve decided to collectively flog off around $30 million worth
of ABC stock just 6 months ago.

in ABC’s $600 million capital raising are paying $7.30 per share, a hefty
discount to ABC’s recent share price (ABC last closed at $7.75 but had been
$8.50 in March). Therefore, by not participating in the equity raising, the shrewd Groves
is effectively signalling to the market that ABC’s shares are, in his opinion,
likely to be worth less than placement price of $7.30 and significantly less
than the recent market price.

should be noted that Groves
is not averse to participating in ABC equity raising
per se. Groves and wife Le Neve bought more than 2.7 million shares between them
for the bargain price of $4.00 per share as part of ABC’s large placement during
the takeovers of Peppercorn and CDC back in 2004.