Why is the Aristocrat (ASX:ALL) share price dipping on Monday?

Here’s what’s driving Aristocrat Leisure’s stock today.

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The Aristocrat Leisure Limited (ASX: ALL) share price has dropped into the red mid-morning, after opening in the green this morning. This comes after the company released more details on its $1.3 billion equity raise.

The gaming technology company has divulged additional information on its retail entitlement offer, the final stage of its capital raise.

The funds raised will help fund Aristocrat’s $5 billion acquisition of London-listed Playtech.

At the time of writing, the Aristocrat share price is $46.99, 0.28% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.24% this morning. As is the All Ordinaries Index (ASX: XAO).

Let’s take a closer look at today’s release from Aristocrat.

Aristocrat share price rises on retail offer

The Aristocrat share price is gaining after the company released the offer booklet for its $405 million retail entitlement offer.

The retail entitlement offer will feature the same price and ratio as its recently completed institutional entitlement offer.

Under the pro rata offer, current Aristocrat shareholders will be able to purchase 1 new share in the company for every 20.56 shares they own on Thursday evening.

They’ll be forking out $41.85 for every new share they wish to purchase.

Aristocrat’s equity raise will see around 31 million new securities in the company hitting the market from mid-November. For context, Aristocrat had an average of approximately 637 million shares on issue over the previous financial year.

The $1.3 billion the tech company expects to raise through the retail and institution offers will be pooled with $1.1 billion of Aristocrat’s existing cash. Additionally, the company will also secure a Term Loan B issuance worth around $2.8 billion before the acquisition is complete.  

The company successfully raised $895 million via its institutional entitlement offer last week.

Aristocrat plans to purchase all of Playtech’s issued shares for 680 pence apiece. That represents a 58% premium on Playtech’s closing price as of 15 October, which came to 429 pence.

The Aristocrat share price has gained 2.62% since the acquisition announcement and equity raising plans.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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