PIPE Investments in Canadian Listed Oil & Gas Companies

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Courtesy of Stikeman Elliott. View original article here.

A substantial private placement or “private investment in public equity” (a PIPE) involves the direct or indirect acquisition of a control position in a public company by an investor through the purchase of shares of the target and (in most cases) warrants or debentures that are convertible into shares of the target.

A PIPE allows an investor to acquire a substantial equity position at a discount and  an option on the equity to reward future performance while affording the investor the ability to influence and re‑invigorate corporate strategy.

For management a PIPE affords capital to exploit growth opportunities in a down market and creates a lead investor that can support later capital market fund raising. For shareholders, a PIPE is an alternative to M&A (or worse outcomes) and offers the opportunity to realize substantial value later in the cycle as commodity prices recover.

Click here to download the PIPE Toolkit from Stikeman Elliott.

Courtesy of Stikeman Elliott. View original article here.