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The Australia and New Zealand Banking Group Ltd (ASX:ANZ) the stock price came back from its three-day trading halt.
In early trading, shares of the banking giant were down nearly 1% at $21.46.
Why is the ANZ share price falling?
The catalyst for ANZ share price weakness on Thursday was the completion of the institutional component of the banking giant’s fundraising.
According to the release, ANZ has successfully raised gross proceeds of approximately $1.7 billion, which will result in the issuance of approximately 89 million new shares.
The statement noted that the institutional rights offering was well supported by ANZ’s institutional shareholders with approximately 95% of the rights subscribed.
The remaining rights were quickly scooped up by other eager institutional shareholders who paid $21.65 per new share following a short book process. That’s $2.75 more than the offering price of $18.90 per share.
ANZ will now continue its retail rights offering which aims to raise the balance of the $3.5 billion fundraising at the same price.
Why is ANZ fundraising?
The proceeds of the fundraising will be used to finance the acquisition of the banking activities of Suncorp Group Ltd. (ASX: SUN) for $4.9 billion.
ANZ chief executive Shayne Elliott explained the reason for the acquisition. He said:
The acquisition of Suncorp Bank will be a fundamental investment for ANZ and a vote of confidence in Queensland’s future. With much of the work to simplify and strengthen the bank complete and our digital transformation well advanced, we are now in a position to invest and reshape our Australian business. This will result in a stronger and more balanced bank for customers and shareholders.
This is a growth strategy for ANZ and we will continue to invest in Suncorp Bank and Queensland for the benefit of all stakeholders.
