The Reliance Worldwide Corporation Ltd (ASX: RWC) share price has shot higher today after the shares were released from a two-day trading halt this morning.
The shares reached a high of $5.99 shortly after the market opened, representing a gain of 31.4% compared to the previous closing price of $4.56. They have since retreated to $5.55 but are still trading 21.7% higher for the session.
Reliance’s share price was placed in a trading halt on Thursday before the market opened after the company announced a major acquisition, supported by a $1.1 billion capital raising (including a $945 million institutional component).
This morning, Reliance confirmed that it had successfully completed the institutional raise, generating $946 million at the offer price of $4.15 per new share. Existing eligible shareholders took up over 98% of the new shares available to them, while the shortfall bookbuild was significantly oversubscribed “with strong demand from both existing and new institutional investors”.
Retail investors will now have their chance to buy shares at the discounted price of $4.15, which marks a 25% discount to the current trading price of $5.55. Eligible shareholders can buy 1 new share for every 1.98 Reliance shares held on the record date.
Reliance Worldwide specialises in “behind the wall” plumbing and hot water systems, and owns the SharkBite brand. While SharkBite is a leader in brass ‘push-to-connect’ (PTC) fittings, Reliance acquired the UK-based John Guest brand, which is a leader in plastic PTC fittings, for $1.22 billion.
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