Orora shares plummet after discounted capital raising

The news: Shares in Orora have slid more than a fifth after resuming trading on Wednesday following a capital raising to fund the company’s European acquisition.

The numbers: Orora shares were down 20% to $2.82 in early trading on the ASX. The company on Tuesday raised a combined $1.1 billion through institutional placement and rights entitlement offer, issuing shares $2.70 a piece, a 21.3% discount to its previous close on Friday, 25 August.

The context: The Australian packaging giant is buying French premium bottle maker Saverglass for $2.26 billion, with the aim of adding meaningful scale to its existing operations and extending its operating footprint in attractive offshore markets. Orora shares had been in a trading halt since 28 August ahead of the buyout announcement and subsequent share offer.