The Treasury Wine Estates Ltd (ASX: TWE) share price is marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) global wine company closed Tuesday trading for $11.46. At the time of writing, shares are swapping hands for $11.59 apiece, up 1.1%.
For some context, the ASX 200 is up 0.1% at this same time.
Here's what's happening.
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What are ASX 200 investors considering?
The Treasury Wine share price is outperforming today after the company announced that the retail component of the entitlement offer relating to its $825 million equity raising opened this morning.
The 1 for 9.45 pro rata accelerated renounceable entitlement offer is priced at $10.80 per share. Notably, that represents a 7% discount to the current share price.
The company will use the capital to help fund its purchase of luxury United States wine brand DAOU Vineyards. Treasury Wine will reportedly pay US$900 million upfront for DAOU as well as up to US$100 million in earnouts.
Today's retail offer opening comes following the completion of the company's institutional component of the entitlement offer last week. That saw Treasury Wine raise around $604 million, also at an offer price of $10.80 per new share.
Treasury Wine chairman John Mullen noted that DAOU, located in Paso Robles, California, was the fastest-growing luxury wine brand in US trade over the past year.
Mullen added, "DAOU owns the DAOU Mountain Tasting Room, four luxury vineyards, four wineries and 411 acres of vineyards in the region and will complement Treasury Wine Estate's existing sourcing and production base in Paso Robles."
He noted that founders Georges and Daniel Daou, both with "a proven track record of success", intend to remain involved in the business following the sale.
Eligible shareholders take note. The retail entitlement offer closes at 5pm on 23 November.
Treasury Wine share price snapshot
The Treasury Wine share price is still on the rebound from the sharp sell-off in May and June.
Shares are down 8% over the past 12 months but are now up 10% since the recent 10 July lows.
