Q: Hi, PPL did a secondary offer for 26 million ( plus 15% overallotment option) subscription receipts, to convert to common shares at $42.85 each, to part finance the deal to buy Alliance Pipeline and Aux Sable from Enbridge. Would you recommend to participate in the offering ? Thanks
5i Research Answer:
It is a fairly aggressive purchase, at about 15% of PPL's market cap, but it is immediately accretive to cash flow, and creates consolidation and synergistic opportunities. We like PPL and it should be able to perform much better as interest rate pressures ease. We would be comfortable buying the offering for income investors.