Banking, finance, and taxes
Wachovia Financing Terms Less Dilutive Than Others (WB)
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Wachovia Corporation (NYSE: WB) has priced its offerings for common stock and convertible preferred stock right before the open this Monday after a dismal earnings report.
They plan to offer 145,833,334 shares of common stock for $3.5 billion. They are also offering 3,500,000 shares of Non-Cumulative Perpetual Convertible Class A preferred stock, Series L, for $3.5 billion and a liquidation preference of $1,000 per share. The two offerings are independent of the completion of the other and underwriters were granted 21,875,000 shares of additional common stock and 525,000 shares of convertible preferred stock in over-allotment options.
The actual pricing is at $24.00 per share, and if all overallotments are exercised Wachovia will realize some $3.9 Billion in capital raised. Shares are down 8% at $25.55 in early morning trading, and its market cap before this dilution is still listed as being in excess of $50 Billion.
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Jon C. Ogg
April 14, 2008
Jon Ogg produces the Special Situation Investing Newsletter. He can be reached at [email protected] and he does not own securities in the companies he covers.
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