- Tags: BUSINESS POLITICS)MARK BLINCH/Reuters
Whitecap Resources Inc.'s bankers had no shortage of interest in the $500-million of Whitecap subscription receipts they had to sell Monday morning to finance a big purchase.
According to two people familiar with the sale, the transaction was well oversubscribed, with far more orders than there was stock on offer. Within two hours of the transaction being announced, there was $1-billion of orders.
Whitecap's bankers lined up to do a bought deal, in which they purchase the securities from the company and resell them to the public. With Whitecap arranging a purchase of oil and gas fields from Imperial Oil, and announcing a 10-per-cent dividend increase, the deal was an easy sell.
The stock is now trading well above the $11.20 sale price for the subscription receipts, meaning anyone who got an allocation is already making a return.
Subscription receipts allow buyers to get one share for every subscription receipt they hold when the Imperial acquisition is set to go ahead. If the acquisition is not completed before June 30, investors get their money back as well as interest.
National Bank Financial and TD Securities Inc. led the sale. The underwriters also included GMP Securities L.P., Dundee Securities Inc., RBC Dominion Securities Inc., Scotia Capital Inc., CIBC World Markets Inc., FirstEnergy Capital Corp., Macquarie Capital Markets Canada Ltd., Peters & Co. Ltd., Raymond James Ltd., and Cormark Securities Inc., Whitecap said.