Hannans to up stake in Ovato

The Hannan family is increasing its stake in the country's biggest printer Ovato (formerly PMP) as the company offered its shareholders new stock in a $15.5m cash raising bid.

Existing Ovato shareholders were offered one new share for every 2.3 they currently hold. The Hannans underwrote the offering, and are buying shares not taken up by institutional investors, who took 59 per cent of those on offer. The family currently owns 40.3 per cent of the business. Each of the directors who hold shares in Ovato and the CEO Kevin Slaven took up up their full entitlements. Michael Hannan, James Hannan, Lindsay Hannan, Sayman Pty Ltd in its capacity as trustee of the Lindsay Hannan Family Trust, Adrian O'Connor, and Richard O'Connor (the Hannan Family) currently have a relevant interest of 40.36 per cent in the company between them.

The raising comes against a background of a steep drop in revenue in the current financial year, with the company telling investors it now expects sales to be down by around 12 per cent on the previous year.

The company is seeking the $15.5m to strengthen its balance sheet, and accelerate the work on its supersite in Warwick Farm, which is due to receive its new 80pp manroland Lithoman over winter.

Ovato is blaming the election for softer retail spend, plus the sharing of print between Nine (Fairfax) and News Corp, and price cutting in New Zealand, as reasons for the falling sales. Its full year EBITDA is likely to be down by $7m, in latest forecasts to around $30m-$33m.

Ovato placed its shares in a trading halt while it placed the offer, which equates to one new share for every 2.3 already owned at 7c.

Shares in the business, which was PMP before its rebrand earlier this year, have plummeted over the past 18 months, losing 90 per cent of their value. The Hannan family company IPMG merged with PMP two years ago, with the Hannans becoming the largest shareholders.