Billionaire investor goes ‘all in’ on Pengrowth
CALGARY Billionaire investor Seymour Schulich bought millions of additional shares in Pengrowth Energy Corp. in recent weeks, sending the stock skyrocketing and forcing the company to publicly say it didn’t know why the shares were rising so quickly.
“I happen to think oil and gas are going up,” Schulich said Monday, explaining that’s the reason he had bought additional shares in Pengrowth. He has increased his position from owning 19 per cent of the company in July to 24 per cent, or 130 million shares, at the end of last week.
In an email announcing his increased position, Shulich said he had gone “all in” on the company.
After trending downward for six months, Calgary-based oil and gas producer Pengrowth’s stock price more than doubled in the course of two weeks, rising from 72 cents each on Sept. 15 to a high of $1.50 per share on Sept. 26. Schulich confirmed he had been buying shares in large volumes over that period.
On Sept. 25, the Investment Industry Regulatory Organization of Canada asked Pengrowth to explain the spike in its share price and higher trading volumes. The company said in a release that “it is not aware of any material undisclosed information related to the company or our operations that would account for this trading activity.”
The stock has since declined, and fell about four per cent to close at $1.22 on Monday — a range where Schulich said he would buy more.
“I wish I had more firepower,” Shulich said, adding that he would increase his holdings in the company six months from now but he is restricted at the moment. If he buys more shares now, he would have to do so through a tender offer.
“I’m allowed to buy five per cent every six months,” he said. “I don’t think six months from now the stock is going to be the same price.”
Schulich said his motto is, “Often wrong, never in doubt,” and he had little doubt about oil prices rising and Pengrowth’s ability to pay down its debt.
Pengrowth, meanwhile, has been under pressure to sell assets and pare its debt as oil and gas prices have been stubbornly low. It announced a deal in September to sell its Swan Hills properties in Alberta, which produce 5,000 barrels of oil equivalent per day, for $150 million. That deal brought Pengrowth’s total divestitures through 2017 to nearly $1 billion.