This is a sane move…anything but selling Dow Ag
The Dow Chemical Company (NYSE: DOW) announced today it has commenced a public offering of the Company’s common stock in which it will raise approximately $1.625 billion of capital.
Of the total capital raised, approximately $1 billion will be through shares offered by the Company and approximately $625 million will be through shares offered by accounts and funds managed by Paulson & Co. and trusts created by members of the Haas Family. These investors have agreed to sell a portion of their shares of Dow’s Perpetual Preferred Stock, Series B to Dow at par plus accrued dividends for shares of common stock which are subsequently being sold in the offering.
The selling stockholders have granted the underwriters a 30-day option to purchase an additional number of shares equal to 15 percent of the total number of shares offered to cover over-allotments.
Dow intends to use the $1 billion of proceeds it will receive from the offering to repay a portion of its $9.2 billion term loan agreement borrowings, under which it used to pay a portion of the purchase price for its recent acquisition of Rohm and Haas Company.
“Today’s offering will not only strengthen our balance sheet and improve our financial flexibility, but it is also very consistent with the objectives of our de-leveraging plan, which is designed to pay off our bridge financing facility by the end of this year,” said Andrew N. Liveris, Dow’s chairman and chief executive officer.
In addition to the equity offering, Dow is also considering a potential benchmark offering of senior unsecured notes in a registered public offering, subject to market conditions. The Company stressed that the consummation of the common stock offering is not conditioned upon the concurrent completion of the senior notes offering, and vice versa.
Disclosure (“none” means no position):Long DOW