Lawrence Asset Management Inc., the manager of PGB Trust is withdrawing the proposed initial public offering of PGB Trust. PGB Trust filed a preliminary prospectus dated Feb. 28, 2006 to provide investors with exposure to a portfolio of Class B units of Pengrowth, an oil and gas royalty trust.
PGB Trust was designed to provide investors with the potential for capital appreciation by allowing non-resident investors, who may attribute a higher value to units of PGB Trust than resident investors, as reflected by the price spread between the Class A units and Class B units, to purchase units.
Lawrence decided to withdraw the offering for the following reasons:
Lawrence believes that the decision to form a special committee to examine the impact of the structure upon Pengrowth’s ability to execute its business plan, alternatives for unwinding the structure and the potential impact of any course of action on both Class A and Class B Unitholders is the correct one.
In addition, Lawrence believes that a collapse of the dual class structure is the most desirable outcome as, in the absence of a legal requirement to regulate foreign ownership, this is clearly in the best interest of all Pengrowth unitholders. Lawrence believes that collapsing the dual unit structure will provide Pengrowth with greater appeal to capital markets and a lower cost-of-capital.
Lawrence reserves the right to return to market with the PGB Trust offering should the special committee decide not to collapse the dual unit structure and will not hesitate to do so in this eventuality.