CB Richard Ellis shares jump 43% on stock sale
Shares of CB Richard Ellis Group Inc. jumped 43% on Thursday after the world’s largest real estate broker raised about $180 million in a secondary stock sale.
The company, based in Los Angeles, sold 50 million Class A shares at $3.77 each, according to a statement issued Wednesday.
CB Richard Ellis had abandoned plans to raise $300 million to $400 million through the private sale of convertible preferred stock. The shares have dropped 71% in the last 12 months as the global credit crisis has hampered real estate sales.
“The stock could be volatile for a while because of the uncertainty in their base operating business,” JPM Securities analyst Will Marks said. The shares rose Thursday probably because the prospect of new capital ensured that the company would meet debt covenants, he said.
The company’s shares rose $1.62 to $5.39.
“The added equity significantly reduces concern about our ability to remain in compliance with our debt covenants, and ensures that we will continue to operate from a position of strength,” Chief Executive Brett White said in a statement.
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