Mainland-backed China Everbright-IHD is cashing up to finance further acquisitions in Hong Kong and the mainland in the near future, analysts say. The company's decision to conduct two share placements within a month to raise $3.8 billion triggered acquisition rumours and fuelled yesterday's 36.9 per cent rise in its share price. The market was aware it was conducting an initial $1.9 billion placement and subscription, but was surprised by Tuesday's announcement of a second $1.9 billion fund raising exercise. The proceeds will be used to finance a $2.4 billion acquisition of a 20 per cent stake in Everbright Bank of China. It will use $500 million from the first placement and the entire $1.9 billion from the second placement to pay for the purchase. Following the fund raising exercises, Everbright-IHD will be left with about $1 billion to pay for any asset purchase once debts of 380 million yuan (about HK$352 million) have been repaid. Company officials declined to comment except to say the two cash calls to its mainland parent demonstrated the parent's confidence in the listed subsidiary. Rumours are intensifying over possible acquisition targets, with some analysts arguing Everbright-IHD may take a stake in Hongkong Electric and others saying it will purchase a stake in troubled retailer Giordano. Everbright-IHD has denied it is in negotiations with either, but shares in Hongkong Electric and Giordano have surged in anticipation of a deal. Amsteel Research's senior red chip analyst Marvin Lo said: 'The company is planning more acquisitions and there are also restructuring plans to bring the other two listed Everbright subsidiaries - China Everbright International and China Everbright Technology - under the direct control of China Everbright-IHD.' Some analysts said the placements were part of an effort to expand as quickly as possible before mainland authorities released guidelines on asset injections by red chips.