A change in purchasing rules is blamed for the $11.13 price drop
POSTED: 01:30 a.m. HST, Mar 01, 2011
Central Pacific Financial Corp.'s stock lost nearly a third of its value yesterday as shares traded for the first time without a $10 rights offering attached.
The parent of Central Pacific Bank saw its shares plunge $11.13, or 31.8 percent, to $23.90 after closing Friday at $35.03.
The drop was expected as Friday marked the last day investors could buy Central Pacific shares with a special share offering attached. Investors who owned shares by the close of business on Friday have the right to purchase an additional 1.3081 shares for each share they own at a special price of $10 a share.
Shareholders will be able to buy the additional shares after the Securities and Exchange Commission approves their registration. Fractional shares will be rounded down. The "rights" can be sold or transferred after the "rights" period is activated.
Central Pacific will have more than 41.6 million shares outstanding after all the shares are registered. Those include 32.5 million shares issued to the two lead investors, The Carlyle Group and Anchorage Capital Group; approximately 5.6 million shares that were exchanged with the U.S. Treasury Department; 2 million shares available through the shareholders rights offering; and the approximately 1.5 million shares that were outstanding prior to these recent share sales.