The Australia and New Zealand Bank Group Ltd (ASX: ANZ) share price will be on watch this morning.
This follows the release of an update on the banking giant's recent equity raising.
Image Source: Getty Images
Why is the ANZ share price on watch?
The ANZ share price will be on watch after the bank revealed that it has completed the retail component of its fully underwritten pro-rata accelerated renounceable entitlement offer to raise a total of approximately $3.5 billion.
This follows the institutional component of the entitlement offer, which was completed on 20 July and raised gross proceeds of approximately $1.7 billion.
According to the release, eligible retail shareholders subscribed for approximately 60.8 million new shares, raising approximately $1.15 billion.
This represented a strong participation rate of approximately 64% of the new shares offered under the retail entitlement offer to eligible retail shareholders. ANZ advised that approximately 217,000 applications were received from shareholders who elected to partially or fully take-up their entitlements.
The remaining entitlements not taken up by eligible retail shareholders or from ineligible retail shareholders, which account for approximately 36.4 million new shares, will be offered for sale for the benefit of those shareholders in the retail shortfall bookbuild.
Why is ANZ raising funds?
ANZ launched the equity raising to fund the acquisition of Suncorp Bank from Suncorp Group Ltd (ASX: SUN) for a purchase price of $4.9 billion.
ANZ CEO Shayne Elliott believes the acquisition will "a cornerstone investment" for the bank. He previously explained:
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.
We have admired the transformation that has occurred under the leadership of Steve Johnston and Clive van Horen and believe Suncorp Bank is a natural fit with ANZ given its culture, risk appetite and customer focus.
