Chesapeake Energy Secondary Priced At Slight Discount (CHK)

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Chesapeake Energy Corporation (NYSE: CHK) has priced a public secondary offering of 20 million shares of common stock at $45.75 per share.  Before any overallotments and before fees, the net proceeds of this deal come to $915 million.

Chesapeake announced this sale under a shelf registration just on Wednesday.  The company intends to use net proceeds initially to repay outstanding debt under its revolving bank credit facility, which it notes may be re-tapped from time to time to fund its recently announced drilling and land acquisition initiatives.

Deutsche Bank, Banc of America Securities, and Lehman Brothers were listed as the joint book-running managers in the underwriting.

On Wednesday, shares closed at $47.36.  Yesterday, shares closed at $46.10.  Shares are indicated at $46.00 in pre-market trading this morning, slightly above the $45.75 pricing of the secondary offering.  Chesapeake’s 52-week trading range is $30.81 to $49.87 and its market cap now sits at $23.7 Billion. 

Jon C. Ogg
March 28, 2008