The Macquarie Group Ltd (ASX: MQG) share price has returned from its trading halt and is dropping.
In early trade, the investment bank's shares are down 2.5% to $193.26.
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Why was the Macquarie share price halted?
The Macquarie share price was placed in a trading halt last week so it could undertake a $1.5 billion institutional placement following its half year update.
Macquarie's Group Chief Executive Officer, Shemara Wikramanayake, explained: "Having deployed $5.5 billion of capital over 2H21 and 1H22, we continue to see a strong pipeline of opportunities. Raising new capital provides us with additional flexibility to invest in new opportunities where the expected risk-adjusted returns are attractive to our shareholders, while maintaining an appropriate capital surplus."
This morning the Macquarie share price has returned to trade after announcing the successful completion of the placement.
According to the release, the placement was conducted by way of a bookbuild and will result in the issue of 7.7 million new fully paid ordinary shares at a price of $194.00 per new share. This represents a discount of just 1.9% to the Macquarie share price prior to its halt.
Ms Wikramanayake commented: "We are very pleased with the success of the Placement and the strong signal of support delivered from Australian and international institutional shareholders. Macquarie remains committed to investing in the growth of our businesses in a disciplined manner."
A share purchase plan will soon follow, providing shareholders with the opportunity to apply for up to $30,000 of shares. This will be offered at the lower of the placement price (adjusted for the interim dividend) or a 2% volume weighted average price during the five days prior to the closing date of the share purchase plan.
Half year results impress
It's not often that a capital raising is undertaken at such a small discount to a company's current share price.
However, Macquarie was able to achieve this after impressing the market with its half year result.
For the six months ended 30 September, the investment bank reported a first half net profit of $2,043 million. This was double what it recorded in the prior corresponding period and in line with the second half of FY 2021. This allowed the Macquarie Board to declare a partially franked interim dividend of $2.72 per share.
The result went down well with the team at Citi. This morning it upgraded the investment bank's shares to a buy rating with a $226.00 price target.
Despite today's decline, the Macquarie share price is still up almost 40% in 2021.
