The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has returned from its three-day trading halt.
In early trade, the banking giant's shares are down almost 1% to $21.46.
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Why is the ANZ share price falling?
The catalyst for the weakness in the ANZ share price on Thursday has been the completion of the institutional component of the banking giant's capital raising.
According to the release, ANZ has successfully raised gross proceeds of approximately $1.7 billion, which will result in the issue of approximately 89 million new shares.
The release notes that the institutional entitlement offer was well supported by ANZ's institutional shareholders with approximately 95% of entitlements taken up.
The remaining entitlements were quickly snapped up by other eager institutional shareholders who paid $21.65 per new share following a shortfall bookbuild process. This is $2.75 higher than the offer price of $18.90 per share.
ANZ will now push ahead with its retail entitlement offer which is aiming to raise the balance of the $3.5 billion capital raising at the same price.
Why is ANZ raising funds?
The proceeds from the capital raising will be used to fund the acquisition of the banking operations of Suncorp Group Ltd (ASX: SUN) for $4.9 billion.
ANZ's chief executive officer, Shayne Elliott, explained the rationale of the acquisition. He said:
The acquisition of Suncorp Bank will be a cornerstone investment for ANZ and a vote of confidence in the future of Queensland. With much of the work to simplify and strengthen the bank completed, and our digital transformation well-progressed, we are now in a position to invest in and reshape our Australian business. This will result in a stronger more balanced bank for customers and shareholders.
This is a growth strategy for ANZ and we will continue to invest in Suncorp Bank and in Queensland for the benefit of all stakeholders.
