The Sandfire Resources Ltd (ASX: SFR) share price has surged more than 5% higher on Thursday after a retail entitlement offer from the Aussie resources group.
Image source: Getty Images
Why the Sandfire share price is lifting 5% today
Sandfire today released its retail entitlement offer booklet for eligible shareholders. It comes as the Aussie mining and exploration company seeks to raise approximately $322 million from the fully underwritten offer.
The 1 for 1 pro-rata accelerated non-renounceable entitlement offer are being offered at $5.40 per share. At the time of writing, the Sandfire share price has climbed 5.4% higher to $5.42 per share.
In total, the Aussie miner is seeking to raise $1.248 billion from its latest equity raising. That comprises both an entitlement offer (institutional and retail) and institutional placement. Sandfire is looking to raise $963 million in the entitlement offer and a further $285 million from the placement.
Citigroup Global Markets Australia and Macquarie Capital Australia are underwriting the entitlement offer.
Today's retail offer release has investors bidding up the Sandfire share price. The funds will go towards funding the group's latest big ticket acquisition.
Shares in the Aussie copper producer were halted last Thursday as the company announced it had entered into a binding sale and purchase agreement with Trafigura and Mubadala Investment Company to acquire 100% of Minas De Aguas Tenidas (MATSA) on a consideration of US$1.86 billion.
The takeover will see Sandfire take control of the MATSA mining complex in Spain. It delivers the Aussie mining company an international site with an estimated 12 years mine life.
Sandfire is looking to use an $897 million debt facility secured by MATSA in conjunction with the $1.2 billion equity raise to finance the takeover.
Foolish takeaway
The Sandfire share price is climbing higher today in line with the retail offer price on offer to eligible shareholders. Shares in the Aussie copper miner are now up 6.5% year to date with a market capitalisation of a touch under $2 billion.
