Australia's Boral slides 12 percent after Headwaters deal

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SYDNEY (Reuters) - Australian brick maker Boral Ltd BLD.AX said it raised A$1.58 billion ($1.2 billion) in shares to help pay for a buyout of U.S. rival Headwaters Inc HW.N, sending its stock lower as investors factored in the effects of having more scrip on issue.

Boral said on Thursday it closed the institutional component of a capital raising that it hopes will total A$2.05 billion, and that it now hopes to raise another A$483 million from retail investors by Dec. 9.

“We see the success of the equity raising as a clear endorsement of Headwaters’s compelling strategic fit within the existing Boral business,” Boral Chief Executive Officer Mike Kane said in a statement.

The institutional share raising was “multiple times oversubscribed”, Boral added in the statement.

Shares in Boral fell 12 percent to A$5.09, higher than the A$4.80 issue price of the new shares, suggesting investors took a favorable view of a deal which the company says will double its U.S. presence just as President-elect Donald Trump plans to boost infrastructure spending.

Australia's broader S&P/ASX 200 index .AXJO was flat.

Reporting by Tom Westbrook and Byron Kaye; Editing by Stephen Coates