Tuesday, specialty financial services company Assured Guaranty Ltd. (AGO) said it plans to make two separate public offerings to fund the cash portion of its buyout of Financial Security Assurance Holdings, Ltd., or FSAH.
The company plans to launch an underwritten registered public offering for $400 million in common shares, with 30-day option for underwriters to buy up to an additional $60 million.
Furthermore, the company said it intends to make a concurrent public offering of 3 million equity units at an initial amount of $50 per unit, or $150 million in the aggregate. Underwriters would have the option to buy up to an additional $22.5 million in equity units.
The company noted that the closing of both the offers are not dependent on the other.
On November 14, 2008, Assured Guaranty agreed to buy Financial Security Assurance from a subsidiary of Dexia S.A. for $361 million in cash and up to 44.57 million in Assured Guaranty common shares, at a total transaction value of $722 million. At the time, the company anticipated the buyout to close in the first quarter of 2009.
The company noted that the cash purchase price would be increased by about $3 million for buying shares of FSAH held by certain of its directors.
The net proceeds will be used to pay the cash portion of the purchase price and to reduce the number of shares, otherwise deliverable in the acquisition by up to approximately 22.28 million shares.
AGO is currently trading down $1.76 or 12.44% at $12.39.
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