Seaport Entertainment Group launches $175 million stock rights offering

NEW YORK - Seaport Entertainment Group Inc. (NYSE American: SEG), a premier entertainment and hospitality company, has begun a $175 million rights offering for its common stock. The offering will allow current shareholders the opportunity to purchase up to 7 million shares, maintaining their proportionate ownership in the company.

The rights offering provides each shareholder as of the record date, which was 5:00 PM, New York time, on September 20, 2024, with transferable subscription rights to buy additional shares at $25.00 each. Shareholders will receive one right for every share they owned on the record date, with each right entitling them to buy 1.267683 shares of common stock.

Investment funds advised by Pershing Square Capital Management, L.P. are backing the offering, committing to purchase any shares not sold by the expiration date, ensuring the company raises the targeted $175 million.

Trading of these rights on the NYSE American will commence on Tuesday under the symbol "SEG RT" and will continue until October 9, 2024, unless the company decides to extend the offer. The rights offering is scheduled to expire on October 10, 2024.

The company has clarified that it will not issue fractional shares but will round down to the nearest whole share, refunding any excess payments. Seaport Entertainment Group plans to use the proceeds for general corporate purposes, including working capital and operational expenses.

The rights offering is based on a registration statement filed with the U.S. Securities and Exchange Commission and a prospectus available to all eligible stockholders. Wells Fargo Securities is the dealer manager for the offering.

Seaport Entertainment Group has not made any recommendations to its stockholders regarding the exercise or sale of the rights, urging them to make independent investment decisions.

This rights offering announcement is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.

In other recent news, Seaport Entertainment Group Inc., a key figure in the entertainment and hospitality sector, has announced a significant rights offering with the goal of raising $175 million. This development will enable current shareholders to acquire up to 7 million new shares of common stock, thus preserving their proportional ownership in the company. The offering is slated to commence shortly after the record date of September 20, 2024, and will allow shareholders to purchase additional shares at $25.00 each.

Pershing Square Capital Management, L.P. has pledged to fully exercise its subscription rights and has agreed to backstop the offering by buying any unsold shares by the expiration date, guaranteeing the company secures the targeted $175 million. The funds raised from this offering are set aside for general corporate purposes, including operational expenses and working capital.

This strategic financial move awaits approval from the SEC, with a registration statement already submitted but not yet in effect. Wells Fargo Securities, LLC will act as the dealer manager during the rights offering. These are among the recent developments concerning Seaport Entertainment Group Inc.

InvestingPro Insights

As Seaport Entertainment Group Inc. (NYSE American: SEG) embarks on its rights offering to bolster its capital, investors are closely monitoring the company's financial health. According to InvestingPro data, the company has a market capitalization of approximately $162.95 million. Despite the challenging market conditions, the rights offering price of $25.00 per share is above the company's recent closing price of $29.51, indicating a potential value proposition for existing shareholders.

InvestingPro Tips suggest that Seaport Entertainment Group is trading at a low Price/Book multiple of 0.41 as of the last twelve months ending Q2 2024. This could signal that the company's stock is undervalued relative to its book value, which might be attractive to value-oriented investors. Additionally, the company's liquid assets surpass its short-term obligations, providing some financial flexibility in the near term. However, it's important to note that the company has not been profitable over the last twelve months and does not pay a dividend to shareholders, which might affect the investment decisions of income-focused investors.

For investors considering participating in the rights offering or seeking more detailed analysis, there are additional InvestingPro Tips available on the platform. These tips provide deeper insights into the company's performance and potential investment risks, aiding in making more informed decisions. To explore further, investors can visit the dedicated InvestingPro page for Seaport Entertainment Group at https://www.investing.com/pro/SEG.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.