Participate in the SPP
Domino’s Pizza (ASX:DMP) (Domino’s) is offering its shareholders the opportunity to participate in a Share Purchase Plan (SPP). Funds raised will fund the acquisition of the remainder of Domino’s Pizza Germany that it does not already own.  Concurrently with the SPP, Domino’s has successful raised $150 million through a share placement at an issue price of $66.38 per share. These funds will also be used to fund Domino’s German acquisition.
To be eligible to participate in the SPP offering, Members had to own Domino’s shares on 30 November 2022. Other matters pertaining to the SPP including other eligibility criteria are contained in the SPP Offer Document, that was forwarded to, on 7 December 2022. The SPP issue price is the lower of (i) $66.38 (the placement price) or (ii) a 2% discount on the closing price of Domino’s on the Australian Stock Exchange (ASX) on 22 December 2022. The shares of Domino’s closed on the ASX on 20 December at $63.84.
Under the SPP, eligible Members may purchase a maximum of A$30,000 in new shares and a minimum of A$2,500. The nominated levels of participation are shown in the following table:
Source: Domino’s (ASX:DMP)
Eligible Members may select one pre-determined level of participation. Domino’s may amend acceptances at its discretion. The SPP is currently open for eligible shareholders to lodge applications and will close on 22 December 2022. The allotment of SPP shares will occur on 30 December 2022.
We recommend Members who are eligible shareholders participate in the SPP. Participation should be proportional to the value of your existing Domino’s holdings. Members should action our recommendation immediately.
We are of the view the acquisition of the remaining part of the of the German operations, as a strategic brownfield strategy. Domino’s and we concur, views Germany as offering a strong long-term growth profile that fits with Domino’s view.
Guidance for 2023 was re affirmed  with a target of new store openings to exceed 484 for 2023, bringing the total to 3,900. Domino’s three to five year outlook remains unchanged with 3% to 6% same-store-sales growth at a Group level, 8% to 10% new store openings and net Capex in the range of $100 million to $150 million. Domino’s has maintained store sales growth in its underlying Net Profit After Tax and has retains a strong customer presence.Â
We maintain our Hold recommendation for Members with exposure. Domino’s will remain in the Fat Prophets portfolio. Members should note our SPP recommendation above.
Disclosure: Interest associated with Fat prophets holds shares in Domino’s Pizza (ASX:DMP).
