ALBERTA

Underwriters buy Encana's remaining stake in PrairieSky for $2.6 billion

09/26/2014 08:43 EDT | Updated 11/26/2014 05:59 EST
CALGARY - Encana Corp. (TSX:ECA) has completed the sale of its remaining stake in PrairieSky Royalty Ltd. (TSX:PSK) in a secondary offering valued at about $2.6 billion.

The stock was sold to a syndicate of underwriters led by several of Canada's biggest banks at a pre-agreed price of $36.50 , which was $2 above PrairieSky's closing stock price on Thursday.

PrairieSky's IPO price was $28 but the shares have never traded that low on the Toronto Stock Exchange The shares initially began trading at $35 in late May. Since then, they've traded as high as $42.60 in late July and as low as $33.91 on Sept. 23.

Encana announced on Sept. 8 that it had agreed to sell its remaining 54 per cent stake in PrairieSky for $36.50 per share to a syndicate that included TD Securities, CIBC, BMO Capital Markets and RBC Capital Markets.

"The creation of PrairieSky has unlocked significant value from Encana's royalty business and the successful closing of the secondary offering marks a major milestone of the strategy we announced last November," Encana CEO Doug Suttles said Friday.

"The proceeds significantly increase the strength of our already healthy balance sheet, leaving us well positioned as we continue to aggressively pursue our strategy."

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