Domino’s share price halted amid $165 million cap raise

The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is missing out on the good times on Thursday.

That’s because this morning, the pizza chain operator requested that its shares be placed in a trading halt until Monday.

Why is the Domino’s share price paused?

Domino’s requested a trading halt this morning so it could launch a capital raising that aims to raise up to $165 million. This comprises a fully underwritten $150 million institutional placement and a $15 million share purchase plan.

The company is raising the funds at a floor price of $65.05 per new share, which represents a modest discount of 2% to where the Domino’s share price last traded.

Why is it raising funds?

According to the release, the proceeds will be used to fund the acquisition of the remainder of the German joint venture and any surplus will be applied towards debt retirement.

This comes after the company received an option exercise notice last month requiring the purchase of Domino’s Pizza Group plc’s shares in the joint venture.

But the acquisitions don’t stop there. The company has also revealed it has now completed the acquisitions of Domino’s Malaysia and Domino’s Singapore. The proposed acquisition of Domino’s Cambodia remains subject to regulatory approvals but is expected to complete in the first quarter of 2023.

Trading update

Finally, Domino’s also provided the market with an update on its guidance for the full year.

It has reaffirmed the guidance for FY 2023 provided to the market at its annual general meeting at the start of November, with the business continuing to track to plan.

This is for the company “to deliver NPAT growth in FY23.”

Positively, the Malaysia, Singapore and Cambodia markets have also seen trading in line with expectations.

The post Domino’s share price halted amid $165 million cap raise appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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