Insurance Australia Group (IAG) has raised approximately $236 million from an oversubscribed share purchase plan to fund its recent acquisition of Wesfarmers' (WES) insurance underwriting business.
In a statement to the Australian Securities Exchange, the insurance company said it would issue around 43 million new shares at $5.47 per share, to begin trading on February 4.
IAG managing director and chief executive officer Mike Wilkins said he was pleased at the number of shareholders who had participated in the share purchase plan.
"Although applications for the SPP exceeded our initial target of $200 million, we accepted the oversubscriptions we received to ensure that we met all the demand from eligible retail shareholders," he said.
In December, IAG raised $1.2 billion through an institutional placement in December.
The group said the proceeds from the share price plan would be used in addition to the December raising to partially fund its $1.85 billion acquisition of the Wesfarmers insurance underwriting business in Australia and New Zealand.
IAG said the balance of the acquisition would be funded through internal resources and subordinated debt.
"The acquisition supports IAG’s strategic priorities of accelerating profitable growth in Australia and sustaining its market-leading position in New Zealand," the group said.