Royal Gold, Inc. (NASDAQ:RGLD; TSX:RGL) announced today that it has agreed to sell 5.25 million shares of common stock of Royal Gold to a group of underwriters led by Goldman, Sachs & Co. in an underwritten at-the-market public offering. To the extent the underwriters sell more than 5.25 million shares, the underwriters will have the option to purchase up to 750,000 additional shares from Royal Gold. The last reported sale price of Royal Gold’s common stock on the NASDAQ Global Select Market on October 9, 2012 was $94.16 per share. The offering is expected to close on October 15, 2012, subject to customary closing conditions. Goldman, Sachs & Co. is acting as the sole book-running manager for the offering, and HSBC Securities (USA) Inc. and Scotia Capital (USA) Inc. are acting as lead managers.
Not to be outdone by Sandstorm Gold’s smart $150 million financing here we have a $500+ million raise*. By our calculations Royal Gold is trading at a very healthy premium to its net asset value and that’s precisely the time you want to go out and raise as much money as possible because it’s hugely accretive. The funny thing is that not all royalty companies are being awarded the same premium which creates some interesting opportunities.
*First order of business should be to update what I think would have to be a frontrunner for the award of worst website design among public $5+ billion companies. Beyond design, it seems every other link is broken depending on how you navigate through the site.
8 months ago
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