Prem Watsa is the Third-Largest EXCO Resources Inc (XCO) Shareholder; Raises Stake to 6.4% in the Rights Offering

Prem Watsa‘s Faifax Financial Holdings follows the bullishness that surrounded EXCO Resources Inc (NYSE:XCO), and in a new filing with the Securities and Exchange Commission revealed boosting its stake to 17.54 million shares, from 10.81 million held earlier. Following the increase, Fairfax’s passive holding amasses 6.4% of the common stock of the company.

Prem Watsa

As it was mentioned above, in the past couple of days, several investors disclosed boosting their positions in EXCO Resources Inc (NYSE:XCO) on the back of a rights offering launched by the company. Wilbur Ross‘ Invesco Private Capital has raised its position to 51.11 million after adding around 17.72 million shares. Another one is Oaktree Capital Management, led by Howard Marks, which purchased around 8.4 million shares in the offering, at a price of $5.00 apiece and raised its holding to 45.25 million shares, or 16.6% of the common stock.

Following the increase in their holdings, Invesco, Oaktree and Fairfax solidified their positions as three largest shareholders of EXCO Resources Inc (NYSE:XCO).

In the rights offering, EXCO Resources Inc (NYSE:XCO) distributed to shareholders of common stock one transferable subscription right for every common share. The right offered the investor to purchase 0.25 of a common share. The company managed to issue 54.5 million shares of common stock, raising its total amount of shares outstanding to 272.82 million, which bring the company’s market cap to about $1.50 billion. EXCO Resources Inc (NYSE:XCO) received net proceeds worth about $272 million, which will be used to repay the company’s indebtedness.

The stock of EXCO Resources Inc (NYSE:XCO) has been gaining ground amid the offering, and in the past week rose by almost 10%. While the stock trails a forward P/E of over 26, the analysts on average consider the current price of the company to be high, their mean target price amounting to below $5.00 per share, versus around $5.50 at which the stock is trading at the moment.

Disclosure: none

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