If you're a corporate executive watching the Toronto Stock Exchange soar yet again, you would be crazy not to think about what you could do with some extra capital under your belt.
Now imagine that the market is not only nearing 14,000, but the deals that are coming to light are also selling very, very well.
Except execs don't have to imagine this -- it's a reality. To capitalize on the strength, Progress Energy Resources Corp. launched a $400-million bought deal Monday afternoon.
Just last week, Progress announced its reserve base had grown by 30 per cent on successful drilling in British Columbia's Montney region. Now the company wants to raise money to expand its 2011 capital program to $350-million, trying to boost production by 15 per cent to 52,000 barrels a day.
Half of the $400-million comes in the form of common shares, the other half in five-year convertible debentures that pay 5.75 per cent annually. Canada Pension Plan Investment Board, which owns 15 per cent of Progress, was brought into the tent and has already agreed to buy $29-million of the common shares. BMO Nesbitt Burns and Scotia Capital are co-leading the offering.
BMO is also top-left on a $150-million offering for Innergex Renewable Energy Inc. , sharing the co-lead title with National Bank Financial. Innergex is buying Cloudworks Energy Inc. for $185-million, but the target's enterprise value is about $415-million after adding in long-term debt.
Innergex owns and operates hydroelectric facilities and Cloudworks' main projects are located in British Columbia. Innergex is also raising $39-million in a private placement, to cover the entire acquisition cost. NBF and BMO were also financial advisers in the M&A transaction, while McCarthy Tétrault LLP offered legal advice.
Other deals that hit the market Monday afternoon include U.S. Gold Corp., which is raising about $100-million and Pan Orient Energy Corp., which is raising $40-million in a private placement.
Tim Kiladze