Altagas Ltd (ALA.TO) - Page 3
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Thread: Altagas Ltd (ALA.TO)

  1. #21
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    Quote Originally Posted by gibor365 View Post
    Treasury Offering of Subscription Receipts via Bought Deal
    Price: $31.00 CDN
    What's the difference between subscription receipts and just a plain old share offering?
    Does the SR approach allow them to back out if the deal doesn't go through for WGL or something?
    Is there a downside to buying ALA in the market at $31.17 (this morning's price)?
    Any word on if the offering is fully subscribed?


  2. #22
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    A share offering is a share offering. This is a maybe share offering. With this subscription receipt method, if the deal does not go through they take their shares back and give the buyers back their money. The buyer would get to keep all the dividends they received up until they receive back their cash.

    There is always a downside in everything you do.

    Not sure if it is fully subscribed. The 10 million share overallotment is a way for the offering brokers to sell short the shares before the open and either stand back if the Altagas share price is strong or buy the shares like crazy, to support the price, if the market price is declining in the market, at the open. In other words, the current price tells you nothing about what the proper price should be because most likely the brokers are supporting it for the time being, to allow them to unload the bought deal.

  3. #23
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    Quote Originally Posted by OptsyEagle View Post
    Not sure if it is fully subscribed.
    Well, TD is sold out.

    It's a reasonable, but not spectacular price to get into ALA. I will have to consider whether to just buy on the market.

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  5. #24
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    Quote Originally Posted by gardner View Post
    Well, TD is sold out.

    It's a reasonable, but not spectacular price to get into ALA. I will have to consider whether to just buy on the market.
    Sold out at CIBC IE in 1 hour . Thinking just to buy at market

  6. #25
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    Quote Originally Posted by gibor365 View Post
    Sold out at CIBC IE in 1 hour . Thinking just to buy at market
    They are slightly better shares. The subscription shares will resist rising in 2017 because if this deal gets cancelled, the subscription shares only get back the original subscription price. The common shares not only get any appreciation of the shares, regardless of the WGL deal but may get a bump from such a cancelation.

    I am not saying the deal will get cancelled but you will see the subscription shares will trade at a discount to the common shares since they carry that extra cancelation risk.

  7. #26
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    They are slightly better shares....the subscription shares will trade at a discount to the common shares
    Sorry, don't really understand your point . If , for example, I buy subscription shares, couldn't I sell it after settlement date (Feb 3)? Isn't price for subscription and common are the same?
    Last edited by gibor365; 2017-01-26 at 05:31 PM.

  8. #27
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    Subscription receipts can be sold on the market but under a different ticker and may or may not be as liquid as the common shares. At $31.xx, I would buy the common shares just for flexibility.

    It sounds like it is selling well. Other companies that have gone down into the states, such as Emera, Fortis, and Algonquin Power, have all issued shares (plus various debt/preferred equity) and all of those stocks are trading above all of their issue prices. Altagas has credible management and there is no reason to expect they will blow this up.

    That being said, it won't close for over a year. That is a long time to hold subscription receipts, and a long time to potentially add to a position. I hold shares. if they stay below $32 for long, I might pick up a few more. This is as close as you get to a screaming buy on the TSX these days, imo. Large cap, investment grade, great management, great value, great dividend, plus growth.

  9. #28
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    Subscription receipts can be sold on the market but under a different ticker
    Is ALA was sold under different ticker?

    I bought via shares offering SRT.UN, and as per my account the ticker is the same...

  10. #29
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    SRT.UN was an offering of common shares, not subscription receipts like this ALA offering. The ALA receipts will be converted to common shares upon closing of the acquisition but will receive the same dividends. It's effectively the same thing as common shares, but if the acquisition doesn't close, you get your money back plus any unpaid dividends. And, not sure if they'll be listed on the exchange yet for general trading.

  11. #30
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    The ALA receipts will be converted to common shares upon closing of the acquisition
    I see and when acquisition to be closed?

    and yes, there is some uncertainly
    Regulatory obstacles in Washington can prove difficult to surmount: Just ask Exelon, whose $6.8B purchase of Pepco was rejected twice before finally being cleared by D.C. regulators last year.

    “There is probably additional uncertainty due to the Pepco-Exelon transaction which had a lot of turmoil and controversy surrounding it and is in the same regulatory jurisdiction," says Edward Jones utilities analyst Andrew Smith.

    Last edited by gibor365; 2017-01-26 at 09:01 PM.

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