Over-allotment option nets Brookfield extra $41m

A secondary offering on Brookfield’s $13bn renewable energy fund is now over with the asset manager raising a total of $341m.

A ‘greenshoe’ option let Brookfield Asset Management (BAM) raise $341 million in a secondary market offering of its newly minted renewable energy business.

A fully exercised over-allotment option on the part of underwriting team Scotia Capital and Toronto Dominion Bank enabled a 1 million unit add-on to a previously planned 11-million unit tender of Brookfield Renewable Energy Partners (BREP), a $13 billion fund BAM created in fall 2011.

Without exercising the over-allotment option, BAM would have netted $300m from the secondary offering. A so-called over-allotment, or ‘greenshoe’, option is a commonly available underwriting provision allowing for a larger-than-originally-planned offering.

The secondary sale priced BREP at $26.30 a unit, more than the $26.25 initially announced, BAM said. The asset manager announced the closing of its BREP deal a little over a week after making the offering.

BAM, an alternative asset concern headquartered in Toronto will retain 68 percent ownership of BREP, a 5 percent reduction from its previous 73 percent stake in the fund. In its secondary market offering of BREP, BAM has signalled its intention to pursue the possible acquisition of energy businesses based in Europe.

BAM recombined its renewable energy business, including its erstwhile Brookfield Renewable Energy holding, under the BREP umbrella as a publicly traded partnership similar to its flagship Brookfield Infrastructure Partners offering, which trades on the New York and Toronto stock exchanges.