Could you please help us understand the implications of this news /transaction as a current shareholder.
What is the % of the secondary to present o/s shares ?
In your view, could it result in a stock weakness - at least a temporary overhang and offer an opportunity to add to our position and if so, what would be the price range ?
Thank You
ATS is offering 6M shares, plus a 15% greenshoe (extra) allotment. It has 92M shares now, so the full deal would add 7.5% more shares. It is in conjunction with a US listing, so despite dilution it may be very good for shareholders, if the deal is received well by US investors. Automation is hot and ATS is doing very well, so we expect it will be. That being said, there can be share price weakness when companies issue shares. Typically they are sold at a discount to encourage a successful deal. We think any weakness will present an opportunity. The stock ramped up hard last week and some might look at the big gain as connected to the stock announcement (it also reported earnings, though). C$56 to $57 in any weakness we think would look good.