Shares of Chesapeake Utilities Corp. (CPK) slumped 1.0% in premarket trading on Friday, reaching a three-year low. The Delaware-based electric utility company disclosed its plan to conduct a public stock offering, valued at $330 million. The offering represents approximately 21.3% of the company’s market capitalization, which stood at $1.55 billion at the close of Thursday’s trading session.
Details of the Offering
Chesapeake Utilities Corp. plans to offer 3.86 million shares at a price of $85.50 per share. This pricing reflects a 1.7% discount from Thursday’s closing price of $87.02. Notably, the stock hasn’t traded at or below $85.50 since October 5, 2020.
Purpose of the Offering
The proceeds from the stock offering will be utilized to support the anticipated acquisition of Florida City Gas. The acquisition is projected to be finalized in the fourth quarter.
Over the past three months, Chesapeake Utilities Corp.’s stock has experienced a significant decline of 23.2%. In comparison, the Utilities Select Sector SPDR ETF has decreased by 6.6%, and the S&P 500 has slipped by 2.7%.
Chesapeake Utilities Corp.’s decision to pursue this stock offering reflects its strategic approach to secure necessary funds for expansion and further strengthen its position in the energy market.