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Xero chief Rod Drury sells $94.5m of shares
Xero chief executive and founder Rod Drury sold $94.5 million of shares, boosting the accounting software firm's liquidity as it prepares to shift to a sole ASX listing.
Drury sold 3 million shares in a placement to institutional and professional investors at $31.50 apiece in his biggest transaction since taking the company public in 2007. Drury remains Xero's largest shareholder with 17.7 million shares, or about 13 percent.
The transaction comes hot on the heels of Xero's first-half earnings announcement when it posted positive pre-tax earnings and unveiled plans to delist from the NZX in favour of a sole listing across the Tasman, which it says will encourage a broader range of analyst coverage and a wider pool of investors.
Drury said the sale was part of that strategy to improve liquidity in the stock with growing demand among global investors keen to back the company, which incorporates the move to a single-listing on the ASX.
"We've had global-grade investors wanting to invest in the company with really strong demand," Drury said. We got advice on how to clear up our shares to allow their funds to come in - that's what we've put together."
He said the $31.50 per share sale was a "good price", with the stock closing at $33 yesterday, having soared 89 percent so far this year.
Drury has watered down his stake in Xero before, his last being the sale of 1 million shares in 2015 at $20.01 apiece. When it listed, he owned 45 percent of the company with about 24.7 million shares, reducing that holding as the software company made headway around the world and attracted major institutional investors including big names such as Paypal co-founder Peter Thiel.
"One of the great things about going public is you can do this without selling the whole company," Drury said.
Drury said the funds will lay the foundation for his future plans for philanthropic and social endeavours, although his family will be looking after that for now while he focuses on Xero.
RELATED VIDEO: Rod Drury talks to Susan Wood about Xero's decision to consolidate the company's shares across the Tasman (Nov 10)