NEW YORK - Seaport Entertainment Group Inc. (NYSE American: SEG), a notable player in the entertainment and hospitality sector, has declared its intention to launch a substantial rights offering aimed at raising $175 million. This move will allow existing shareholders to purchase up to 7 million new shares of common stock, maintaining their proportional ownership in the company.
Scheduled to commence shortly after September 20, 2024, the record date, the offering will grant shareholders transferable rights to buy additional shares at $25.00 each. The rights will be tradable on NYSE American under the symbol "SEG RTWI" beginning September 19, 2024, and subsequently under "SEG RT" starting September 24, 2024, until the offering's closure on October 10, 2024, unless an extension is announced.
Each shareholder of record will receive one right per share held, with the right to purchase a number of shares calculated by dividing 7,000,000 by the total number of outstanding shares. Full subscription rights exercised by shareholders will also unlock over-subscription privileges, allowing them to claim any remaining shares after the basic subscription is fulfilled, subject to certain ownership limits.
Pershing Square (LON:PSHP) Capital Management, L.P. has committed to fully exercise its subscription rights and to backstop the offering by agreeing to purchase any shares not sold by the expiration date, ensuring the company secures the targeted $175 million.
The capital raised from this offering is earmarked for general corporate purposes, including operational expenses and working capital. This strategic financial move is subject to SEC approval, with a registration statement already filed but not yet effective.
Wells Fargo (NYSE:WFC) Securities, LLC will serve as the dealer manager during the rights offering.
This announcement is based on a press release statement and contains forward-looking statements, which involve risks and uncertainties. As such, actual results may differ from current expectations. The offering is conditional upon SEC registration effectiveness and will only be made through a prospectus, which will be provided to eligible stockholders and can be obtained from the SEC's website.
InvestingPro Insights
In light of Seaport Entertainment Group Inc.'s (NYSE American: SEG) upcoming rights offering, a review of the company's financial metrics and InvestingPro Tips provides valuable context for investors considering participation. Currently, SEG has a market capitalization of $153.29 million and trades at a low Price / Book multiple of 0.4. This could indicate that the stock is potentially undervalued relative to its book value, which might interest value-oriented investors.
However, the company's financial performance shows some challenges. SEG has not been profitable over the last twelve months, with a reported operating income margin of -186.0% and a gross profit margin of -61.07%. These figures underscore the difficulties SEG has faced in generating profit from its operations and managing its cost of goods sold effectively.
InvestingPro Tips suggest that SEG's stock generally trades with high price volatility, which could mean greater risk for investors. Additionally, the company does not pay a dividend, which may influence the investment decisions of income-focused shareholders. For those considering the rights offering, these factors are worth contemplating alongside the potential benefits of maintaining proportional ownership in the company.
For those interested in a deeper analysis, there are additional InvestingPro Tips available on the platform, offering further insights into SEG's financial health and stock performance.
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