Sprott Inc. (TSE:SII), an alternative asset manager, said on June 24 that legendary precious metals investor Eric Sprott is reducing his stake in the company he launched nearly three decades ago to nearly 25 percent.
Sprott said that 2176423 Ontario Ltd., a company controlled by Erick Sprott, has struck a deal with a syndicate of underwriters co-led by TD Securities Inc. and Scotiabank.
Under the deal, the underwriters will buy from the selling shareholder 20 million common shares of Sprott at $3 per share, generating $60 million in gross proceeds, the Toronto-based company said in a statement.
The underwriters have been granted an over-allotment option to purchase an additional three million shares at the issue price. That option is exercisable for a period of 30 days after the date that the offering closes.
Sprott will also sell, via private placement, 5 million shares to the Sprott Inc. 2011 Employee Profit Sharing Plan Trust.
The company won’t get any of the proceeds from these transactions.
It said Mr. Sprott will use much of the net proceeds to invest in funds and securities managed by Sprott Inc. or its affiliates, with a focus on precious-metal-related investments.
Following completion of the offering and the private placement, Sprott will retain a 25.4 percent stake in Sprott Inc. and 24.2 percent if the over-allotment option is exercised in full.
Shares fell 8 percent to C$3.00 at the close of trading in Toronto yesterday, leaving the company with a market value of $745 million.