Genesee & Wyoming selling stock and equity units
GREENWICH, Conn. (AP) — Regional railroad operator Genesee & Wyoming Inc. said Wednesday it will sell more than 3 million shares of stock and 2 million equity units to fund its purchase of RailAmerica Inc.
Genesee & Wyoming is offering 3.3 million shares of Class A stock and 2 million equity units, each of which will consist of a prepaid stock purchase contract and an amortizing note.
The units, priced at $100 each, will automatically settle for Class A common shares on Oct. 1, 2015, if they are not redeemed earlier. The amortizing notes will pay equal quarterly installments that will include a partial repayment of principal and a repayment of interest. The final installment payment will be Oct. 1, 2015.
The company said the underwriters of the offerings will have the opportunity to buy another 525,000 Class A shares and 300,000 equity units.
In July Genesee & Wyoming agreed to buy fellow regional railroad operator RailAmerica for about $1.39 billion in cash, and the offering will help the company fund that deal. If that deal is not completed, Genesee & Wyoming will use the money for other corporate purposes like strategic investments and acquisitions.
BofA Merrill Lynch, Citigroup, and J.P. Morgan will be the joint book-running managers of both offerings.
The Greenwich, Conn., company also said Chairman Mortimer Fuller III will sell 234,000 shares in the offering, but Genesee won't get proceeds from that sale.
Shares of Genesee & Wyoming rose $1.50, or 2.3 percent, to $67.92 on Wednesday, then shed $3.02, or 4.5 percent, to $64.90 in after-hours trading.