A rotten year for ASX-listed can and bottle maker Orora has activists making moves behind the scenes.
Street Talk understands home-grown investment bank Barrenjoey tried to pull together a syndicate of investors in a single stock fund to nab a 10 per cent stake in Orora and agitate for change.In a 16-page deck, which went out to family office and high-net-worth types in April, Barrenjoey told interested parties it was seeking a $289 million stake in the company. This would be funded by a $182 million equity raise and $87 million debt.
Interested parties were told the fund would be highly active, calling for board and management change, seeking to divest its major 2023 acquisition, French glass bottle maker Saverglass and zeroing in on operational efficiency in North America. This, they said, was in the name of returning Orora’s price-to-equity ratio to “historical levels” and “ensuring swift earnings recovery”.
If achieved, Barrenjoey reckons its fund could deliver an internal rate of return of around 24 per cent, or put bluntly, “2.3-times money in four years”.The move comes after Orora sought $1.3 billion from investors in 2023 to fund its $2.2 billion acquisition of Saverglass from The Carlyle Group, representing the biggest equity raise in the Australian market for financial year 2024 and Orora’s biggest purchase to date. Since the deal was announced, Orora’s share price has fallen 32 per cent.
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