PrefBlog

Dividend Growth Split Corp has announced:

that the board of directors has approved a private placement of 468,480 preferred shares at $10.30. The private placement is being made in order to maintain an equal number of outstanding preferred shares and class A shares of Dividend Growth Split Corp. following its merger with Brompton Equity Split Corp.

The closing of the private placement, as well as the merger, is expected to take place on May 18, 2011, subject to regulatory approvals. As a result of the private placement, there will be no requirement for Brompton Equity Split Corp. to redeem any of its class A shares, as more fully described in the joint management information circular of Brompton Equity Split Corp. and Dividend Growth Split Corp. dated March 11, 2011.

Based on the April 28, 2011 net asset values, the class A share exchange ratio for the merger is 1.493584 Dividend Growth Split Corp. class A shares for each Brompton Equity Split Corp. class A share. After giving effect to the private placement and the merger, Dividend Growth Split Corp. will have 6,374,149 class A shares and preferred shares outstanding.

I find it rather odd that the private placement was necessary: the implication is that a large number of preferred shareholders retracted at $10 rather than selling into the market at a higher price.

DGS.PR.A was last mentioned on PrefBlog when the merger and term extension were approved. DGS.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns.

This entry was posted on Friday, May 13th, 2011 at 2:08 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.