Investors Give Thumbs Down To Roundy’s Inc (NYSE:RNDY)’s Pricing Of Public Offering

Posted by Kristi Scott February 10, 2014 0 Comment 1418 views

The Milwaukee headquartered retail grocery chain, Roundy’s Inc (NYSE:RNDY) declared the pricing of its previously announced public offering on 7th February. It has proposed to sell 8.84 million shares of stock at $7 per share. This translated to a discount of over 19 percent on its February 3 start price of $8.67. This resulted in the stock shedding close to           15.68 percent of its market valuation last week, and close to 2.5 percent of its value during trading on 7th February.

Discounted Pricing

The 7th February press note by the $321 million market capped Roundy’s Inc (NYSE:RNDY) disclosed that while the firm is putting up for sale, 2.95 million shares of common stock, an additional 5.89 million shares are being contributed by current share holders, who want the company to sell the shares as part of the public offering. The underwriters have been offered a 30 day option to buy out an additional 1.33 million shares, in the event of over subscription.

 The offer will close on 12th February. The proceeds raised by the sale of shares via the public offer is expected to be sued for augmenting and upgrading the recently bought out Safeway stores in Chicago. This proceeds the company would be laying claim to would be limited to the revenue originating from the 2.95 million shares only. Roundy’s Inc (NYSE:RNDY) has retained the services of “Credit Suisse and J.P. Morgan, along with BofA Merrill Lynch and BMO Capital Markets” as its joint book running managers and has designated the  Milwaukee-based brokerage firm Robert W. Baird & Co. Inc. as its lead manager for the offering.

Share Holders Booking Profits

The pricing of the public offering at a substantive discount over the current trading price of the stock resulted in the current share holders dumping the stock and book profits. They might consider entering into the stock at lower pricing during the public offering.

About Kristi Scott

Kristi Scott joined GDP Insider in 2005 as a Wall Street reporter for the Business and Market section. Kristi covers the stock market, financial markets and personal finance. Her awards have come from the National Federation of Professional Writers, the Ohio Newspaper Association, the Cleveland Press Club, the Society of Professional Journalists and Suburban Newspapers of America. Kristi was named SNA's national Journalist of the Year

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