WASHINGTON (AP) - Power company Pepco Holdings Inc. said Monday that it plans to sell up to 15.4 million shares of its common stock in an underwritten public offering.
Pepco said it plans to use any net proceeds from the offering to support its utility subsidiaries, repay short-term debt, fund working capital needs and for other general corporate purposes.
The offering's underwriters will also have the option to buy up to an additional 2.3 million shares to cover possible over-allotments. Morgan Stanley, J.P. Morgan, BofA Merrill Lynch and Citigroup are the offering's joint underwriters, Pepco said.
No price was disclosed for the offering. Pepco shares closed at $19.50 on Friday and have traded in a range of $16.57 to $20.64 in the past year. It has more than 227 million shares outstanding, according to FactSet.
Pepco, based in Washington, D.C., delivers energy to customers in Delaware, Maryland, New Jersey and the District of Columbia.
In connection with the offering, Pepco said it plans to enter into a forward sale agreement with Morgan Stanley, under which Pepco will issue and sell to Morgan Stanley the same number of shares sold by Morgan Stanley to the offering's underwriters at the public offering price, minus underwriting discounts and commissions.
As a result, Morgan Stanley is expected to sell to the underwriters up to 15.4 million shares of Pepco stock, assuming that the overallotment option is not exercised, at the close of the offering.
The forward sale agreements will be settled within 12 months after the offering is priced, Pepco said.
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