Capital Power Corp T.CPX.PR.A

Accretive acquisition

[555rookie555]

It is advertised as an accretive acquisition, yet SP drop? Is it common for the market to respond by selling while analysing acquisitions?

[DeanEdmonton]

After so many REALLY bad acquisitons, think AQN, ALA, Rogers, in this space, it has become the instant response to any announcement, until large holders can figure out if the assts purchased really are as good as the comapny announcements make them out to be. No company ever says, we bought a bunch of dog assets and paid way too much money for them, but lately that is often the case. In this case,

[Experienced]

Dean.....well said.  I agree with your analysis. I took advantage of the situation near the open today to add to my holdings.

[billroth]

I agree with you, this is a buying opportunity and i added to my position too.

[555rookie555]

I also pulled the trigger on an equal weight position. I like natural gas power producers and the US exposure.  I am saving a lot of dry powder for tax loss season this year though, so exhibiting some self-control! 

[AlwaysLong683]

Look like high quality assets to me and the discount on the subscription receipts ($36.45) is not outrageous.    If the entire over-allotment is exercised (which will likely be the case), a total of 12.2M new shares will be issued. According to TMX Money, CPX currently has  toal of just over 117M shares outstanding, so this equity offering will add just over 10% to the count

[1northumberland]

Dog Issue. Re-price likely coming like CPG. remember - The installment receipt will likely start trading a $1:00 lower than the regular shares due to wait period on conversion. No rush to buy-imo  Re-price should be done at $35.00 -imo

[NewOpportunist]

Don't think the comparison with CPG is appropriate. CPG issue was done on day when crude moved sharply lower and a lot of investors got burned by prior CPG Management during their acquisition binge period of the past. Haven't seen analyst response yet to CPX acquisitions, but on paper they seem reasonable, moving CPX away from being overly reliant on Alberta, reasonable acquisition

[Experienced]

New.....very good points

[DeanEdmonton]

Alwayslongs- I agree with you and the point about the shares repricing to the new issue is a good thought as well.

[Red_Deer]

Hey ROOKIE__The SP drop IS the Direct Result of the 12.2 MILLION shares being SOLD @ 36.45__Needed for the Acquisition. This Sale WILL DILUTE a Tad Over 10% BUT at the same time ADDS Support @ 36.45 All NORMAL

[Red_Deer]

Rookie__Here are the DETAILS of the OFFERING  Subscription Receipt Offering   The Company has entered into an agreement with a syndicate of underwriters (the “Underwriters”) led by TD Securities Inc. and National Bank Financial Inc. to issue 8,231,000 subscription receipts (the “Subscription Receipts”), on a bought deal basis, at an issue price of $36.45 per Subscription Receipt

[555rookie555]

Well look at that! The math matches where the SP opened! Thanks for highlighting that red deer.