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Investing.com -- American Water Works (NYSE:AWK) stock dropped 3.9% after the company announced the pricing of an underwritten offering of 7,042,254 shares of common stock at $142.00 per share.
The water utility services provider said the shares are expected to be borrowed by forward purchasers from third parties and sold to underwriters as part of forward sale agreements. Wells Fargo (NYSE:WFC) Securities, J.P. Morgan, and Mizuho (NYSE:MFG) are acting as joint book-running managers for the offering.
American Water Works will not receive any proceeds from the sale of the common stock sold by the forward purchasers to the underwriters. The company entered into forward sale agreements with Wells Fargo Bank, JPMorgan Chase (NYSE:JPM) Bank, and Mizuho Markets Americas, with settlement expected on or before December 31, 2026.
The offering, which includes a 30-day option for underwriters to purchase up to an additional 1,056,338 shares, is expected to close on August 6, 2025. When settlement occurs, American Water Works plans to use any net cash proceeds for general corporate purposes.
The company noted that the offering is being made pursuant to its effective shelf registration statement filed with the Securities and Exchange Commission.
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