Columbia Pipeline Group Inc (NYSE:CPGX) shares fell in early morning trading after the company announced pricing on its secondary offering of stock. Previously they had announced that they would be making this offering available, but they have now decided to increase the amount of shares offered from 51 million to 71.5 million, an increase of over 42%.
Columbia Pipeline Group Inc (NYSE:CPGX)’s announcement has suddenly made the currently available outstanding shares seem a bit less valuable, as more will be hitting the market. The shares will be offered at $17.50 each, which was below what the stock was trading at. The offering will grant the underwriters a 30-day option to purchase up to 10.725 million shares, and is expected to close on December 7, 2015.
While the secondary offering certainly could be seen in a negative light by some investors, the addition funds will provide CPG with the ability to fully fund the 2016 cash capital expenditure requirements of themselves and their subsidiaries.
The stock is down 5.93% or $1.13 following the news, hitting $17.92 per share. About 3.64 million shares traded hands or 117.96% up from the average. CPGX has risen 6.00% since November 2, 2015 and is uptrending. It has outperformed the S&P500 by 6.20%.
Columbia Pipeline Group, Inc. owns and operates natural gas pipelines, integrated with the underground storage systems in North America. The company has a market cap of $5.70 billion. The Firm offers a range of services to local gas distribution companies and users of natural gas. It has 21.29 P/E ratio. The Company’s systems connect the natural gas supplies with nation’s energy markets, serving clients in over 16 states from the Gulf Coast to the Midwest, Mid-Atlantic and Northeast.