Encana Corp. reduced the price range of its substantial issuer bid to purchase for cancellation up to US$213 million of its common shares, citing a drop in the stock's market price.
The Calgary, Alberta-based company lowered the price band of the offer to US$4.15 per share to US$4.75 per share, from the previous range of US$4.70 per share to US$5.40 per share, according to an Aug. 14 news release. The revision was due to a decrease in the market price of the stock since the original offer dated July 8, leading to a failure to meet one of the conditions to the offer.
Encana is carrying out the share buyback through a "modified Dutch auction" that will enable shareholders to individually choose the price within the new range. When the offer expires, Encana will determine the lowest price at which it can buy the maximum number of shares without exceeding the US$213 million cap.
In addition, Encana amended a condition to allow it to withdraw, change or extend the offer; or postpone the acceptance for payment of or the payment for shares tendered if the shares' market price falls more than 10% since the close of business Aug. 14.
The share repurchase is now expected to end Aug. 28, unless further extended or withdrawn. BMO Nesbitt Burns Inc. and BMO Capital Markets Corp. are financial advisers and dealer managers, and AST Trust Co. (Canada) acts as depositary for the offer.
Encana is engaged in the exploration and production of oil, gas and NGLs, with assets in shale plays, including the Montney and Duvernay shales in British Columbia and Alberta.