Home / Insurance Tips / Sleep Country Canada closes secondary offering: It’s good news for a few and bad news for the rest

Sleep Country Canada closes secondary offering: It’s good news for a few and bad news for the rest

Sleep Country Canada President Christine Magee.

Get it right and also the four per cent business C the fees earned through the underwriters and that are shared between your bankers, the brokers and their employer C is much like shooting fish in a barrel.

Get it wrong, meaning the issue is too large or even the price is excessive, and also the buyers steer clear, the fees are reduced.

The latest example of the second situation plays out Thursday whenever a $185 million secondary offering by Sleep Country Canada Holdings closes. Being a secondary, none of the proceeds will flow towards the company. Instead the sellers, Birch Hill and Panzer Ltd., will get a pre-Christmas bonus.

Indeed the two sellers will get what they contracted for, even though lack of investor interest meant the problem needed to be repriced. Instead of selling Ten million shares at $18.50 a share for net proceeds of $177.Six million (or $17.76 a share), the syndicate repriced the deal to market the block at $17.75.

That decision was taken the morning following the deal was announced, a proactive move because the unsold shares were then allocated. It was also timely, because the shares closed Wednesday at $16.52.

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