CHARLOTTE, N.C. - Albemarle Corporation (NYSE: NYSE:ALB), a company specializing in essential elements for various industries, has upsized and priced its public offering of depositary shares. Each depositary share represents a 1/20th interest in a share of Series A Mandatory Convertible Preferred Stock, with the offering priced at $50 per share. This move increases the initial offering from $1.75 billion to $2 billion, with an option for underwriters to purchase up to an additional $300 million in shares.
The offering is slated to close around March 8, 2024, contingent upon customary closing conditions. Albemarle anticipates net proceeds of approximately $1.94 billion after accounting for the underwriting discount and estimated offering expenses. These funds are earmarked for general corporate purposes, which may include expanding lithium operations in Australia and China and repaying outstanding commercial paper.
Investors holding the depositary shares will have rights proportional to those of the Preferred Stock, including dividends, conversion, and voting rights. The Preferred Stock is set to convert automatically into common stock on or around March 1, 2027, with the conversion rate dependent on the common stock's average price before the conversion date.
Dividends on the Preferred Stock, if declared, will be payable cumulatively at an annual rate of 7.25% on the liquidation preference. Albemarle may choose to pay these dividends in cash, common stock, or a combination thereof.
Currently, there is no public market for the depositary shares or the Preferred Stock, but Albemarle has applied to list the depositary shares on the New York Stock Exchange under the symbol "ALB PR A."
The offering is being managed by J.P. Morgan and BofA Securities as joint book-running managers, with several other financial institutions serving as bookrunners and co-managers.
This announcement is based on a press release statement.
InvestingPro Insights
As Albemarle Corporation (NYSE: ALB) positions itself for growth through its upsized public offering, investors may consider the company's financial health and market performance to assess the investment opportunity. According to InvestingPro data, Albemarle has a market capitalization of $12.84 billion and a trailing twelve-month P/E ratio of 7.25, indicating a potentially undervalued stock compared to earnings. Despite a challenging market, with the stock price taking significant hits over the past six months, resulting in a 42.08% decline, Albemarle has demonstrated resilience by maintaining its dividend payments for an impressive 31 consecutive years, an InvestingPro Tip that signals a strong commitment to shareholder returns.
Additionally, the company's revenue growth over the last twelve months stands at 31.38%, showcasing its ability to expand its top-line figures. However, analysts have tempered expectations, with some revising their earnings forecasts downwards for the upcoming period, and anticipating a sales decline in the current year. These mixed signals underscore the importance of careful analysis when considering Albemarle's stock, particularly in light of its volatile price movements.
For investors seeking more in-depth analysis, InvestingPro offers additional insights and metrics. There are currently 12 more InvestingPro Tips available for Albemarle, which can be accessed by visiting https://www.investing.com/pro/ALB. To enhance your investing strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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