Tesoro Corporation (NYSE: TSO) is indicated slightly higher this morning as its Tesoro Logistics LP (NYSE: TLLP) is raising more than expected in its partial spin-off initial public offering. Tesoro Logistics priced 13,000,000 common units at $21.00 per unit. The range was $19.00 to $21.00 per unit and we had expected 12.5 million units. It appears that the higher payout (distribution, yield substitute) may have attracted more investors at the last-minute.
After the IPO, the public will own 41.8% of the outstanding equity of Tesoro Logistics and Tesoro Corporation (NYSE: TSO) will own 58.2%. If the overallotment is exercised in full, then the public will own 48% and Tesoro Corporation will own 52% of the equity.
Citi, Wells Fargo, Bank of America Merrill Lynch, and Credit Suisse are the joint book-runners for this IPO; co-managers are Barclays Capital, Deutsche Bank, J.P. Morgan, Raymond James, and RBC Capital Markets. The underwriting group was given an overallotment option to purchase up to an additional 1,950,000 common units at the IPO price from Tesoro Logistics.
Tesoro Corporation shares are indicated up 1.1% at $27.45 versus a 52-week trading range of $10.40 to $28.74.
JON C. OGG
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