05/22/2014 07:59 EDT | Updated 07/22/2014 05:59 EDT

Encana to raise $1.46B by spinning off some Alberta holdings in PrairieSky IPO

CALGARY - Encana Corp. (TSX:ECA) says it expects to raise almost $1.46 billion by spinning off some of its Alberta land holdings through the company's PrairieSky Royalty Ltd. subsidiary.

Calgary-based EnCana says an initial public offering of 52 million common shares of PrairieSky, representing some 40 per cent of the company, has been priced at $28 per common share.

Encana said in an announcement Thursday night that PrairieSky has filed a final prospectus dated May 22 in respect of the offering with the securities commissions or similar authorities in each of Canada's provinces and territories.

Subject to necessary approvals, the offering is expected to closed May 29.

It is being conducted by through a syndicate of underwriters co-led and joint bookrun by TD Securities Inc. (TSX:TD) and CIBC (TSX:CM).

The underwriters have been granted an over-allotment option to purchase up to an additional 7.8 million common shares at the offering price, exercisable until 30 days after closing. If exercised in full, it would increase the aggregate gross proceeds to Encana to about $1.67 billion.

On the Toronto Stock Exchange, Encana shares closed down 38 cents, or 1.49 per cent, at $25.12 on Thursday on lighter than average volume of about 1.8 million shares.