Still no need to sell Dow Ag. Liveris is correct in saying that at $15, as constituted and with plan to rid itself of many of their commodity businesses, shares are a good value. That being said, the the current constitution is drastically altered, that may not be the case.
The Dow Chemical Company (NYSE: DOW) announced today that on May 6 it priced a public offering of approximately 130 million shares of its common stock at a price to the public of $15.00 per share.
Total potential gross proceeds to Dow and the selling stockholders from the offering is approximately $2.25 billion, including an over-allotment option of 15 percent.
Of these shares, approximately $1 billion in gross proceeds will be through shares offered by Dow and $1.25 billion (including over-allotment shares) will be through shares offered by accounts and funds managed by Paulson & Co. and trusts created by members of the Haas Family.
Excluding the over-allotment option, the Haas Trusts and the Paulson funds are each selling $454.4 million of their shares of Dow’s Perpetual Preferred Stock, Series B to Dow for the shares being sold by them in the offering.
“This over-subscribed equity issuance, and the clearing price of fifteen dollars per share, shows the strength of the Dow name in the equity markets,” said Andrew N. Liveris, Chairman and Chief Executive Officer. “In addition, by retiring more than $900 million of perpetual preferred in our capital structure, we have created a significant de-leveraging event that at the same time is meaningfully accretive to common shareholders.”
The clearing price represents a 1.3 percent decline from the closing price on May 6 of $15.19, and an 8.1 percent decrease from the closing price on Tuesday, May 5 of $16.33.
Disclosure (“none” means no position):Long DOW