PG&Es stock falls after $3.25 billion equity investment announced, to be priced at a discount – MarketWatch

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Shares of PG&E Corp.
PCG,
+0.91%

sank 6.2% in premarket trading Monday, after the San Francisco-based utility announced an equity investment of a total of $3.25 billion by investors including Appaloosa, Third Point LLC, Fidelity Management & Research Co. LLC and Zimmer Partners at a discount to current prices. Under terms of the investment, the investors will pay up to $10.50 a share, depending on the price per share to be paid in an expected public offering of common stock. That price represents a 16% discount to Friday’s closing price of $12.52. The deal is expected to close when PG&E emerges from bankruptcy. PG&E said it expects to use the proceeds to fund a portion of the financing for the exit from bankruptcy. The stock has lost 12.3% over the past three months through Friday, while the SPDR Utilities Select Sector ETF
XLU,
+1.45%

has declined 8.8% and the S&P 500
SPX,
+0.29%

has gained 7.5%.

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