On September 9th, 2019, Northland Power Inc (TSX: NPI) announced that they are buying a Colombian power facility for $1.1 billion. NPI is funding the acquisition with equity and debt. The $315 million of equity was raised by a public offering of subscription receipts. This means that the subscription receipts will trade as receipts until the closing of the deal. This is done to protect the buyer, the seller and the existing shareholders if the deal does not go through. However, in my 20 years of experience, I have never seen a subscription receipt deal not go through. Generally, most of the due diligence is completed and what holds up the deal is delays with regulatory approvals.
Disclaimer: Palos Funds are shareholders of NPI.
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