UBM to raise 565 million pounds via rights issue to fund Advanstar deal

By Noor Zainab Hussain (Reuters) - Communications and events company UBM Plc said it intended to raise about 565 million pounds via a rights issue to fund its acquisition of trade show organiser Advanstar Communications Inc [DLJMDC.UL]. Shares in the FTSE-250 company fell nearly 4 percent, making the stock one of the biggest midcap percentage losers on Thursday morning. Canaccord Genuity analyst Simon Davies said that while the rights issue was known, the terms of the deal were not revealed earlier, causing the stock price to adjust to the level of discounts in the rights issue. The company said it would issue 196.7 million shares, representing about 80 percent of its existing issued share capital, or 44.4 percent of the enlarged issued share capital after the completion. UBM would issue 4 new ordinary shares at 287 pence each for every 5 existing ordinary shares. UBM said on Oct. 1 that it would buy Advanstar for $972 million in cash, becoming the top events organiser by revenue in the United States. It planned to fund the deal through a rights issue. JP Morgan advised UBM on the financial aspects of the Advanstar deal, while JP Morgan and Credit Suisse are joint brokers and underwriters for the rights issue. UBM's shares were down 2.8 percent at 530.5 pence at 0904 GMT on the London Stock Exchange (Reporting by Noor Zainab Hussain and Esha Vaish in Bangalore; Editing by Gopakumar Warrier)