The Flight Centre Travel Group Ltd (ASX: FLT) share price is rocketing higher on Wednesday, up 14.84% in early trade.
The S&P/ASX 200 Index (ASX: XJO) travel stock closed on Monday trading for $15.83. The share price shot as high as $18.18 this morning and, at the time of writing, is $17.54, up 10.8%.
The company was placed in a trading halt at its request yesterday.
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Why was the Flight Centre share price halted?
As The Motley Fool reported yesterday, Flight Centre shares entered a trading halt following the company's announcement that it will acquire United Kingdom-based luxury travel brand Scott Dunn.
Commenting on the acquisition yesterday, Flight Centre CEO Graham Turner said, "High-net-worth, time poor customers highly value the services of Scott Dunn as shown by their customers' loyalty."
Flight Centre will shell out $211 million for Scott Dunn, comprising of $40 million in cash and a $180 million placement. That placement comprises of some 12.3 million new shares, issued for $14.60 apiece.
Additionally, Flight Centre will conduct a $40 million share purchase plan (SPP), offering existing stockholders shares at the same placement price.
What did the travel group report today?
The Flight Centre share price is out of the trading halt and roaring higher after the company reported that the $180 million share placement is complete.
The company said demand for the institutional placement – issued at a 7.8% discount to Monday's closing price – exceeded the supply of 12.3 million shares.
"We are very pleased with the support shown by new and existing institutional investors for the placement," Turner said. "The acquisition of Scott Dunn will enable us to grow our leisure presence in the attractive US and UK luxury markets, complementing our existing footprint."
Investors who held shares at Monday's close will have the opportunity to apply for up to $30,000 worth of Flight Centre shares for $14.60 apiece or 2% discount to the volume-weighted average share price over the five trading days up to, and including, the SPP closing date. (Whichever is lower.)
Flight Centre share price snapshot
The Flight Centre share price has been a strong performer so far in 2023, up 25% since the closing bell on 30 December. Over the past 12 months, as you can see below, shares are up 3%.
