Good morning,

But wait, there’s more!

A swath of capital raises, including this morning’s $23 million raise from uranium play Alligator Energy, have hit the market with free options attached. These give shareholders the right to convert the option to shares at a certain price within a specific timeframe. The pitch goes something like this: “participants in the capital raising will receive one free attaching option for every two securities allocated in the offer...”

While attaching options to a capital raising is nothing new, sources told Street Talk they’d seen an increase in the number of stockbrokers employing this tactic, especially small caps.

The reasons for attaching options are many, but the more cynical say it is to attract retail shareholders. It’s the equivalent of throwing in an extra set of steak knives.

Capital raises have been a tough slog for brokers this year and this is a clear signal they’re getting harder to get away, particularly on the smaller end. Free options are something to get retail clients excited about your placement, and if the guy down the street is doing it, you do it too. The pitch to management is somewhat self-fulfilling – these guys only got their deal away by giving away options, so you need to as well.

It’s not a harmless exercise, however, and can dilute existing shareholders.

Happy reading,

• BGH Capital is set to kick off a $600 million refinancing deal for Village Roadshow.
• Keybridge Capital‘s Nick Bolton is stepping up his campaign against Magellan Financial‘s Global Fund.
• ASX hopeful Cuscal is booking in investor meetings ahead of what it hopes is a $300 million IPO.
• LGT Crestone swoops on disheartened Escala Partners advisers; seven senior figures walk.
• Ord Minnett’sSydney office has been rattled by a series of departures last week.
• Firetrail names new global fund portfolio manager.

• Instacart and Klaviyo, reacting to the strong reception of this year’s biggest IPO, have increased the amount of money they want to raise, Bloomberg News reports.
• Shares in France’s Société Générale’s tumbled more than 12 per cent after new chief executive Slawomir Krupa unveiled what he called a “realistic” restructuring plan, The Financial Times reported.
• Sports-centred conglomerate, Wasserman, has finalised a deal to buy Brillstein Entertainment Partners, which represents among others Brad Pitt and Adam Sandler, The New York Times reports.

The Magellan Global Fund is trading at a 13 per cent discount to the underlying value, an improvement on the one-year average discount of negative 18.6 per cent.

Click here for the latest equity market wrap.