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Encana raises $1.34 bn in largest canadian IPO since 2000

DOUG ALEXANDER and REBECCA PENTY

CALGARY,Canada (Bloomberg) -- Encana raised C$1.46 bn ($1.34 bn) selling a 40% stake of its PrairieSky Royalty business in Canada’s largest initial public offering in 14 years.

Canada’s largest natural gas producer sold 52 million shares in its royalty unit at C$28 each, according to terms in a statement. That’s at the top of the revised price range of C$26.50 to C$28 a share after boosting the range and amount earlier this week.

The spinoff of PrairieSky adds to a series of energy IPOs, including a C$248 million sale by Journey Energy, that closely held oil and gas producers are considering this year. Equity markets are more favorable toward sales from Canada’s energy industry this year because of higher fuel prices and a weaker currency that’s boosting returns for exporters.

The sale surpasses Athabasca Oil Corp.' s C$1.35 bn IPO in 2010 and is the largest in Canada since Sun Life Financial raised about C$1.8 bn in 2000, data compiled by Bloomberg show.

The sale is part of CEO Doug Suttles’s plan to turn around Encana by selling assets, focusing on primary regions that produce higher value oil and gas liquids and paying down debt.

Jay Averill, an Encana spokesman, confirmed the details of the sale in a phone interview.

Toronto Dominion Bank and Canadian Imperial Bank of Commerce are co-leading a group of banks on the sale, which have the option to sell an additional 15% stake when the offering closes. The deal is scheduled to close on May 29, according to the filing.

05/23/2014

 

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