Shares in Australian building materials group Boral slumped 9.6 per cent, from $4.89 to $4.40 on Thursday after the completion of the $274 million institutional part of its $490 million rights issue.
''You'd have to say the re-listing should be seen as a bit disappointing,'' said Argo Investments managing director Rob Patterson.
''There will be a retail shortfall to be placed in due course which will keep pressure on the price for a while yet, but I'm still surprised at the re-listing price.''
Boral shares were in a trading halt since Tuesday, when the company declared it would raise $490 million to fund capital investment through rights issue. The retail component was set to start July 15 and close on July 30.
The shares were offered at $4.10, a 16 per cent reduction to Boral's closing price on Monday.
The building products group claimed it had ''strong support'' from eligible institutional shareholders, with 92 per cent taking the offer. Analysts, however, said the response was unsatisfactory.
''Given the equity dilution, a 92 per cent take-up is actually disappointing,'' said Credit Suisse analyst Rohan Gallagher.
According to Boral, 5.5 million shares, the remaining 8 per cent, were made available for the institutional bookbuild. The clearing price of $4.65 per new share was a 55¢ premium to the offer price but below the $4.76 theoretical ex-rights price, the sum at which analysts predicted the share to be valued after the dilution of the capital raising.
Mr Gallagher said the underwhelming investor response probably resulted from doubts over the US housing market recovery and disappointment with its ''half-baked restructure'' and shortage of quantifiable savings from the ''much-hyped'' strategy review.
The equity raising announcement came after a strategic review that will see Boral condense its seven divisions to five.
''Following our comprehensive review, the capital raising will provide the financial flexibility and balance sheet to focus on our core operations and identified opportunities across the group, and in the process, improve shareholder returns,'' chief executive Mark Selway said in a statement.