DuPont Sets Conoco Spin-Off
Shares of DuPont rose Monday after the chemical giant offered details of its planned sale and spin-off of its Conoco oil unit.
DuPont, a component of the Dow Jones Industrial Average, plans to conduct an IPO for up to 20 percent of Conoco by the end of the year.
DuPont filed an amendment of its IPO with the Securities and Exchange Commission specifying an offering price of $20 to $24 per share.After the IPO DuPont shareholders will be given the opportunity to exchange some of their shares for shares of the newly public oil company. DuPont said the expected exchanges will let it effectively acquire 10 to 20 percent of its outstanding shares.
Shares of DuPont (DD) rose 2 1/8 to 60 7/8 in recent trading.
"The split-off will reward DuPont shareholders both by effecting a large acquisition of our own shares, and offering a tax-efficient choice to them to own either or both companies going forward," said DuPont CFO Gary M. Pfeiffer.
Conoco's proposed ticker for its offering of 150 million shares on the New York Stock Exchange is "CLL," according to a statement from the company.
"In May we announced that DuPont would exit the energy business so that DuPont and Conoco could better capitalize on market opportunities to make both companies stronger," said DuPont president and CEO Charles O. Holliday, Jr. "The IPO and split-off will offer the most value to shareholders, as well as position both companies for future success."
Net proceeds of the offering will be used to repay outstanding debt to DuPont.
Underwriters for the massive deal will be granted an option to acquire up to 22.5 million shares to cover over-allotments. The underwriters are Morgan Stanley Dean Witter; Credit Suisse First Boston; Goldman, Sachs & Co.; Merrill Lynch & Co.; J. P. Morgan & Co.; Salomon Smith Barney; BT Alex. Brown; and Schroder & Co. Inc.
Conoco, active in 40 countries, is an energy specialist involved in exploration, production, refining, marketing, transportation and power. The company ranks eighth in the worldwide production of peroleum liquids by all U.S.-based companies, eleventh in the production of natural gas, and eighth in refining throughputs.
Written By Steve Gelsi