By Valentina Za and Elisa Anzolin
MILAN (Reuters) - Italian spirits group Campari (LON:0ROY) has raised 1.2 billion euros ($1.3 billion) by selling new shares and debt that can be converted into equity to fund last month's acquisition of French cognac house Courvoisier, it said on Wednesday.
Campari took advantage of favourable market conditions as it joined a rush of issuance in Europe since the start of the year.
Courvoisier's deal is the biggest to date for a company that has grown steadily through acquisitions over the years.
Campari sold new shares at 9.33 euros each, offering a 6% discount from Tuesday's closing price and gathered orders through an accelerated book-building procedure.
Shares in Campari fell 5% to 9.4 euros by 1000 GMT, the biggest percentage drop on the pan-European STOXX 600 index as traders said the price converged towards that of the new stock placement.
With Courvoisier generating more more than half of its revenues in the United States, analysts have said China's anti-dumping investigation over brandy imported from the European Unionthe would have "negligible" impact on Campari.
Cognac is a high-end brandy that comes from France's southwestern Cognac region.
In December, Campari said it would fund the acquisition via a mix of debt, cash and equity or equity-like instruments, while also accelerating debt reduction.
Campari also privately placed with investors senior debt that it can opt to repay, when it expires in January 2029, by handing investors shares in the company.
Campari set the conversion price for the 550 million euro bond at 12.3623 euros a share, representing a premium of 32.5% compared to the price at which it issued the new shares.
Each debt note converts into 8.09 shares. Campari said some of the bond investors had hedged their risks by short-selling other Campari shares.
The company will use proceeds from the fundraising for the Courvoisier deal as well as general corporate purposes, it said, while improving the group's capital structure by cutting debt and extending its average maturity.
The new shares account for 5.6% of Campari's capital while the bond, if converted, would represent another 3.6%.
BofA Securities, Goldman Sachs (NYSE:GS), Crédit Agricole CIB, Intesa Sanpaolo (BIT:ISP) and Mediobanca managed the transactions, Campari said.
($1 = 0.9152 euros)