Bloomberg – Sprott Inc. may rise after the mining and energy hedge fund run by investor Eric Sprott raised C$200 million ($197 million) in the biggest Canadian initial public offering in five months.
The 20 million shares were sold at C$10 each, in the middle of the expected range of C$9.50 to C$10.50 a share, the Toronto- based money manager said in a Canada NewsWire statement late yesterday. The offer is scheduled to close on May 15.
Eric Sprott and other shareholders are selling a stake of as much as 15 percent in the firm, whose hedge funds and mutual funds have soared along with prices for oil, gold and other metals. The C$2.1 billion Sprott Canadian Equity Fund has returned 30 percent annually in the past five years, compared with a 19 percent gain for the Standard & Poor’s/TSX Composite Index.
“This issue is hot, hot,” said David Cockfield, who helps manage about $2 billion at Leon Frazer Associates Inc. in Toronto, who declined to say whether he’s buying shares. “If you think that we’re in the kind of market that will continue to provide the kind of performance fees that they’ve been earning, then it’s a buy.”
The shareholders may sell an additional 3 million shares within 30 days of the closing date to meet demand, raising gross proceeds to about C$230 million. The IPO, led by Cormark Securities Inc. and TD Securities, is the biggest in Canada since Franco-Nevada Corp. raised C$1.26 billion in December.
