Domino’s Pizza has pressed go on a $165 million equity capital raising to take full control of its German joint venture operations, as the fast-food operator expands its global footprint.
The company put its shares in a trading halt on Thursday morning before market open, with Domino’s Group CEO Don Meij saying the fresh funding will feed the business’ appetite for offshore expansion.
“We are excited about increasing our ownership in Domino’s Pizza Germany, which has been an objective of ours since entering the market. Germany offers strong long-term growth prospects for our business,” he said.
Domino’s is the dominant pizza chain in Germany, especially after its acquisition of independent chain Hallo Pizza brought its store count from 200 stores to over 300. The German business is currently jointly owned between Domino’s Pizza Enterprises in Australia and Domino’s Pizza Group plc, a UK-based master franchise of the chain that is listed on the London Stock Exchange.
Domino’s Pizza is looking to raise up to $165 million.Credit:Rob Homer
The equity capital raising will involve a fully underwritten institutional placement to raise $150 million that would see the company issue 2.3 million new shares – 2.7 per cent of the company’s existing number of shares – at $65.05 a share, a 2 per cent discount on Wednesday’s closing price of $66.38.
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Domino’s hopes to raise a further $15 million through a non-underwritten share purchase plan, under which eligible shareholders can apply for up to $30,000 of new shares at a 2 per cent discount on the closing price of the last day of the plan, expected to be December 22.
Domino’s will make further details available to shareholders in a week’s time.
The $20.2 billion American pizza giant has the exclusive master franchise rights for the pizza brand not just in Australia, but in New Zealand, Belgium, France, The Netherlands, Japan, Germany, Luxembourg, Denmark, and Taiwan. It recently added Malaysia and Singapore to that list, with Cambodia expected to become part of the portfolio in the first quarter of 2023.
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