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:

  • Pengrowth Corp, administrator of Pengrowth Energy Trust, announced on March 27, 2006 that ithas set up a special committee to consider whether the Class A and Class B trust unit structure continues to be in the best interests of Pengrowth Energy Trust and its unitholders;
  • Pengrowth has received certain confirmations from the Canada Revenue Agency and the Department of Finance, that it is no longer necessary to monitor or regulate the level of ownership of trust units by persons who are not Canadian residents in order to preserve Pengrowth’s status as a mutual fund trust.
  • The collapse of the dual unit structure would remove the valuation gap between the Class A Units and Class B Units and therefore the reason for creating PGB Trust would no longer exist.

    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.