TransCanada underwriters use overallotment option

TransCanada Corp. said Thursday it sold an additional $240 million Canadian (US$207.6 million) worth of shares to underwriters and will use proceeds to partially finance capital projects, as it seeks to become the sole owner in a pipeline that will transport crude oil from Alberta to markets in the U.S. Midwest.

The Calgary, Alberta, company said that underwriters of its recent share offering have exercised their overallotment option to purchase an additional 7.6 million shares at C$31.50 (US$27.24) each.

The overallotment portion of the deal is to close on June 30.

Including the common share offering, the total value of the deal is C$1.84 billion.

TransCanada, which transmits natural gas and generates power, said it will also use proceeds for general corporate purposes and to repay short-term debt.

Last week, TransCanada said it will become sole owner of the KeyStone pipeline through an acquisition of ConocoPhillips' remaining interest. The deal is worth about US$550 million, plus about US$200 million in assumed debt. That transaction is expected to close in the third quarter.

The Keystone pipeline is expected to be one of the largest oil delivery systems in North America when it is completed, with the capacity to transport 1.1 million barrels of oil per day.

TransCanada's shares rose 11 cents, to $26.89 in afternoon trading.