CALGARY – Crescent Point Energy (NYSE:CPG) Corp. has taken a significant step to manage its recent equity challenges amid a downturn in oil prices and its latest acquisition moves. The Calgary-based company is now navigating a clean-up trade executed by a syndicate led by BMO and RBC, offering shares at a reduced price to alleviate the effects of a hung deal from last week.
On Friday, the company aimed to bolster its finances through an equity raise of C$500 million, pricing the share sale at C$10.30 each. However, the market's tepid response left the underwriting syndicate with approximately 25% of the 48.5 million shares unsold. This shortfall necessitated today's re-offering of shares at a decreased price of C$9.70, down C$0.60 from the initial offer, equating to a C$7.3 million devaluation on the shares held by the syndicate.
The decision for a clean-up trade comes as Crescent Point's shares have seen a 13% drop this month, influenced by declining oil prices and the company's recent acquisition of Hammerhead Energy Inc. This share price reduction reflects the company's attempt to adjust its equity financing strategy in response to these market conditions.
Analysts, who are currently restricted on the stock, are closely watching the situation unfold with BMO and RBC acting as joint bookrunners on the re-offer. The settlement for this clean-up trade is scheduled for tomorrow, November 16.
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