What about the overallotment option on the shares issuance?Here is what we know about the recent share issuance.
Bombardier announced (on March 23rd) that it closed its previously announced offering of 168,000,000 Class B shares (subordinate voting) at a purchase price of Cdn$3.80 per share (the Offering), for aggregate gross proceeds of Cdn$638.4 million.
Bombardier Closes Offering of Equity March 23, 2018 Bombardier also granted the Underwriters an option to purchase up to an additional 25,200,000 Class B Subordinate Voting Shares at any time up to 30 days after closing of the Offering. Closing of the Offering is expected to occur on or about March 23, 2018, subject to customary closing conditions, including receipt of stock exchange approval. The offering will result in gross proceeds of $638.4 million to Bombardier (or approximately $734.1 million if the Underwriters’ overallotment option is exercised in full).
Bombardier to issue $638.4 million of equity Questions for discussion :
1 - When exactly does that 30 day option period expire?
- - A) Expires Sunday April 22
- - B) Expires Monday April 23 - before trading begins
- - C) Expires Monday April 23 - after trading ends
- - D) Expires Tuesday April 24 - before trading begins
2 - What do you expect the underwriters to do just before the option period expires?
- - A) Buy all the shares they can and sell them immediately?
- - B) Buy all the shares they can and sell some immediately?
- - C) Buy all the shares they can and hold them short-term?
- - D) Buy all the shares they can and hold them long-term?
3 - What do you expect the underwriters to do after the option period expires?
- - A) Sell them immediately?
- - B) Sell some immediately?
- - C) Hold them short-term?
- - D) Hold them long-term?