ANZ launches rights issue to fund Suncorp Bank purchase

ANZ is raising funds to buy Suncorp Bank. Photo / NZ Herald

ANZ has launched a discounted rights issue aimed at funding its purchase of Suncorp Bank for A$4.9 billion ($5.4b).

The acquisition is to be funded by a fully underwritten 1-for-15 pro rata accelerated renounceable entitlement offer to raise about A$3.5b at A$18.90 per new ANZ share.

The offer represented a 12.0 per cent discount to the theoretical ex-rights price of A$21.47 or a 12.7 per cent discount to ANZ's closing share price of A$21.64 on Friday.

Suncorp said its insurance operations in both Australia and New Zealand would not form part of the transaction and the group's head office would continue to be in Queensland.

The bank will continue to operate under the Suncorp Bank brand pursuant to a licensing agreement between ANZ and the group for a period of five years after completion of the deal.

ANZ also confirmed that it had withdrawn from discussions with US investment giant Kohlberg Kravis Roberts & Co (KKR) about a potential acquisition of accounting software firm MYOB.

The bank also issued a quarterly business update to go with details of its capital raising announcement.

"This was a pleasing quarter where all our businesses performed, particularly our home loan business in Australia," ANZ's chief executive Shayne Elliott said.

"While rising inflation and interest rates are starting to impact some customers, household and business balance sheets remain strong and with a collective provision balance of $3.8 billion we are well-placed to continue to support economic growth into the future," he said.

In New Zealand, the bank had "delivered disciplined growth across core products".

ANZ shares are on a trading halt while the rights issue gets underway.