Mexican silver miner Fresnillo has moved higher after it acted to meet new stock exchange free float requirements which come into force in January.
It sold a 2.7% stake at £11.30 a share - a 1.99% discount to Friday's close and 38% lower than the start of the year - to an existing shareholder, fund manager First Eagle. The move means Fresnillo is now compliant with rules requiring FTSE constituents to have 25% of their shares available for trading. The £220m raised will be used for corporate purposes and working capital. Fresnillo chief financial officer Mario Arreguin said:
We have made clear we value our inclusion in the FTSE index and this placing will ensure we retain that position.
Ben Davis at Liberum Capital said:
Interesting to note Blackrock (second largest shareholder with 7.17%) was not involved in the process, suggesting a lack of appetite to further increase exposure. The other alternative was to see [controlling shareholder] Penoles sell down shares, but this would have lead to significant tax charges. The stock continues to trade expensively with a consensus 2014 PE of 17.1 times.
Fresnillo is currently 28p higher at £11.81.
