Domino’s Pizza is raising $165 million to take full control of its German joint venture operations from a UK related company.
Domino’s put its shares into a trading halt on Thursday before the market opened to allow the majority of the raising to be placed with big shareholders.
The raising sees Domino’s making a fully underwritten institutional placement to raise $150 million that would create 2.3 million new shares – 2.7% of the company’s existing number of shares – at $65.05 a share, a skinny 2% discount on Wednesday’s closing price of $66.38.
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% discount on the closing price of the last day of the plan, expected to be December 22.
“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,” Domino’s Group CEO Don Meij said in the statement
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 operation 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 listed on the London Stock Exchange.
The $150 million institutional placement will be completed today and then trading halt lifted.
The company reaffirmed its AGM trading guidance in Thursday’s announcement, which saw it forecast “materially lower” earnings for the December half of 2022-23 compared to the previous corresponding period.
Net profits for the full 2023 financial year would be weighed down by a forecast $35 million of extra costs and the impact of negative foreign exchange movements.
Domino’s Pizza Enterprises’ saw a 12.5% slide in underling net profit for 2021-22 to $165 million, driven by the negative impact of pandemic lockdowns in France and Japan.
