Thursday, April 9, 2009 06:47 PM
TransCanada deal was a squeaker
Boyd Erman
Bay Street's abuzz with optimism after TransCanada Corp. successfully launched a $1-billion bought-deal share sale this week, the first big stock sale in months. In fact, it's the first big sale since the last time TransCanada came to market for more than $1-billion, back in May.
And while the optimism is warranted - it's nothing but good news that the market can handle a big deal like that, given the pummeling investors have taken since May - a comparison between the two deals reveals it was a much closer call to place all the stock this time.
Institutional investors bought less in the latest offering, with almost 40 per cent of the stock going into retail accounts, according to people familiar with the deal. And most investors got all the stock they asked for, while last time there was much more demand, so that investors only got about half what they requested.
This time, also, the discount to the prior trading price was much larger, though some of that relates to the fact that investors had sold TransCanada down before the May offering because the company announced the purchase of a power plant, a deal that telegraphed that the company would have to sell stock.
