The secondaries are coming! The secondaries are coming! Actually, that should be that the secondary offering wave is still coming on strong. Early last week we gave a deep review of 16 secondaries and that was only mid-week. We have already seen four secondary offerings by companies raising cash. Among these are Kaiser Aluminum Corporation (NASDAQ: KALU), Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX), Massey Energy Company (NYSE: MEE), and ViaSat Inc. (NASDAQ: VSAT).
We have outlined the proposed terms or indications, a comparison to the current price, underwriters, and the expectations for each.
Kaiser Aluminum Corporation (NASDAQ: KALU) just announced its intention to offer $130 million aggregate principal amount of convertible senior notes due 2015 in a private offering (144A) to qualified institutional buyers. The notes may be converted into an amount of cash equal under certain circumstances and Kaiser expects to repurchase up to $50 million of its outstanding common stock in privately negotiated, off-market transactions with purchasers of the notes. The market cap here is $742 million.
Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX) is no surprise at all that the company announced a capital raise. Its shares have effectively doubled since last wee’s FDA approval of Silenor. After the close the company announced it will offer up to 4,000,000 shares of its common stock a public secondary offering. The sole book-runner is Jefferies & Company, and it listed Oppenheimer as the sole co-manager in the deal; simultaneously it will grant the underwriters an overallotment option to purchase up to an additional 600,000 shares. The 4 million shares would come to around $33 million based upon today’s prices and its market cap at the close was $196 million.
Massey Energy Company (NYSE: MEE) also announced after the close that it will sell 8.5 million shares of common stock in a public secondary offering to fund a portion of the cash consideration related to its recently announced $960 million combined cash and stock acquisition of Cumberland Resources Corporation and affiliated companies. It has a large underwriting group. UBS Securities LLC is acting as Sole-Book-Running Manager for the offering. Stifel, Nicolaus & Company, Incorporated and PNC Capital Markets LLC are acting as Joint-Lead Managers for the offering. FBR Capital Markets & Co. and Raymond James & Associates, Inc. are acting as Co-Managers of the offering. Its overallotment option is 1.275 million shares of common stock. The gross proceeds here would be about $430 million, and Massey’s market cap is $4.34 billion.
ViaSat Inc. (NASDAQ: VSAT) has commenced a public secondary offering of 5,500,000 shares of common stock, of which some 3,000,000 shares are being sold by selling stockholders. Morgan Stanley, BofA Merrill Lynch and Credit Suisse are the joint book-running managers, and co-managers are Barclays Capital and Needham & Co.; the total overallotment between the company and selling shareholders is up to an extra 825,000 shares. Based upon Monday’s closing bell, the proceeds would be a gross amount of close to $190 million; its market cap is $1.26 billion before the effects of any offering.
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JON C. OGG
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