Outsourcing firm Capita has managed to get its placing of 40m new ordinary shares away at 685p per share.
The shares, which had been trading slightly above the 685p level prior to the announcement of the result of the placing, dipped below 685p shortly afterwards and hit 676p at the end of the lunch-time session.
The day before the share placing was announced Capita shares closed at 723p, so the placing price is well below that.
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Based on the placing price, the company has raised around £274m from the share issue, which has increased the size of the issued ordinary share capital by about 6.5%.
Capita Chief Executive Officer, Paul Pindar, will also pocket around £2.7m as he took the opportunity to offload 0.4m Capita shares to institutional investors via the placing, thus reducing in the company to around 1.3m shares.
The share price reaction to the announcement of the fund-raising was negative, but Peel Hunt thinks raising money to splurge on acquisitions is a sound idea.
"Whilst some investors would no doubt prefer to see more focus on organic growth and deleveraging in 2012, we can see the long term rationale for taking advantage of acquisition opportunities when they arise," said Peel Hnt's Henry Carver.
"Acquisitions have always been a key part of Capita's strategy, giving it additional scale and breadth of capability that enable contract wins. We believe this will be well timed, given the much improved outlook for outsourcing evidenced by the strong start to 2012," Carver added.
Peel Hunt rates the shares a "buy" and has a price target of 850p for the shares.
