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Breitburn Energy in 15M-unit public offering

  • Breitburn Energy Partners (BBEP) -3.7% AH after announcing a public offering of 15M common units.
  • BBEP says it intends to use the net proceeds to pay down debt.
Comments (7)
  • 395308
    , contributor
    Comments (52) | Send Message
     
    I do not think this a good idea. The market will not look upon this favorably.
    12 Nov 2013, 05:42 PM Reply Like
  • Davephd
    , contributor
    Comments (785) | Send Message
     
    It looks like a 15% to 17% increase in shares. The BV is $18.41 and the stock closed today at $19.06 (down $0.12), which is 103.5% of BV. Would the dilution take the BV to about $17.80 or does the money coming in from the stock sale leave the BV about the same ? Does this mean the payment to stock holders is reduced by the dilution or does the money not paid as interest on the paid off debt compensate for the dilution?
    12 Nov 2013, 06:33 PM Reply Like
  • Eriksbullish
    , contributor
    Comments (16) | Send Message
     
    This will give shareholders a chance to buy more shares at a discount, and it will also help the company clean up its balance sheet.
    12 Nov 2013, 08:21 PM Reply Like
  • lstobart
    , contributor
    Comments (7) | Send Message
     
    So, as a company, wouldn't it have been better to announce this BEFORE earnings, so that the really positive earnings and announcement of a monthly distribution would take the sting out of the dilution of shares?
    12 Nov 2013, 08:27 PM Reply Like
  • TJ Schoenlein
    , contributor
    Comments (412) | Send Message
     
    Normal operating procedures for MLP'S. Between the debt market and floating shares - it's how MLP'S raise money to move forward. Nothing to get excited about, historically they gain back the per share drop in a couple of months.
    13 Nov 2013, 08:15 AM Reply Like
  • judgmentDaze
    , contributor
    Comments (66) | Send Message
     
    With a "secure 10+% yield" and "CAGR 4% for next 5 years" the usual FUD around MLP equity issuance makes an adequate entry point for the long-haul investor ...
    13 Nov 2013, 04:47 PM Reply Like
  • demotom
    , contributor
    Comments (40) | Send Message
     
    Good MLP's only issue units to fund an acquisition, which is the case here.
    This offering is funding the highly accretive Oklahoma Panhandle deal from earlier this year. BBep mgmt said during the deal's announcement this summer, it would issue unit later in the year, when unit price was higher.

     

    A little disappointed, was hoping for a bigger drop; Initiated position in BBEP, earlier this week
    15 Nov 2013, 12:15 PM Reply Like
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