BMO, RBC Lead Crescent Point Clean-Up Trade Following Hung Deal

A syndicate led by Bank of Montreal and Royal Bank of Canada is executing a clean-up trade on shares of Crescent Point Energy Corp., according to people familiar with the matter, after a hung deal last week left the lenders holding onto millions of shares.

Crescent Point shares were re-offered to clients at C$9.70 each, according to terms of the deal seen by Bloomberg News. That’s 60 Canadian cents less than the price at which the BMO-and RBC-led syndicate underwrote the share sale last week.

The Calgary-based oil and gas producer closed a C$500 million ($366 million) equity raise on Friday. The group failed to find enough buyers at C$10.30 a share, leaving them with about 25% of the 48.5 million shares issued, people familiar with the matter have said.

The difference between the original price and the re-offer implies the shares still held by the banking syndicate have declined C$7.3 million in value, Bloomberg calculations show. Neither BMO nor RBC responded to a request for comment.

Crescent Point shares are down 13% this month on a combination of a drop in oil prices and the announcement of its deal for Hammerhead Energy Inc. and the equity financing.

As of Wednesday morning, multiple analysts including at BMO were still restricted on the stock, according to data compiled by Bloomberg. Analysts are restricted on a stock when their firm is in the midst of trying to market shares of that company.

BMO and RBC are joint bookrunners on the share re-offer, the terms show. Settlement of the clean-up trade is expected on Nov. 16.

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