Sydney, April 28 - Shares in Australian conglomerate Wesfarmers Ltd rose 6.3 percent on resuming trade on Monday after the company said demand from institutions was strong for its A$2.6 billion ($2.5 billion) share sale.
The institutional portion of Wesfarmers' one-for-eight rights offer raised about A$940 million ($887 million) at a price of A$37.25 a share, the company said last week before trade resumed. About 96 percent of existing eligible institutional shareholders participated.
The stock rose as high as A$38.36 on Monday and was up 4.4 percent at A$37.68 at 0040 GMT.
"The ability to materially improve the company's financial position without materially diluting EPS (earnings per share) confirms this equity placement is a positive development and improves sentiment for the stock," said a research note from Credit Suisse.
The offering to retail shareholders opens Monday.
Faced with turmoil in global credit markets, Wesfarmers opted for the share issue, which was fully underwritten by six banks, to refinance part of its A$18 billion acquisition of supermarket chain Coles Group. The strike price for the new rights offer was set at A$29.00.
Wesfarmers shares had been placed in a trading halt on April 16 ahead of the refinancing announcement.