Semco prices upsized $65 million convertible preferred to yield 5%, up 27.5%

New York, March 9 - Semco Energy, Inc. priced an upsized $65 million offering of convertible preferred stock to yield 5% with a 27.5% initial conversion premium.

The deal was increased from $60 million and came with a yield at the low end of talk of 5.0% to 5.5% and a conversion premium in the middle of talk of 25% to 30%.

Credit Suisse First Boston was bookrunner of the Rule 144A/Regulation S deal, which priced after the close Wednesday.

The conversion price is $7.15 and the ratio 26.1438 shares per $200 liquidation preference.

The issue will be non-callable for five years and then at par.

Full dividend and takeover protection are provided.

There is a $5 million greenshoe available.

The Michigan-based gas utility said proceeds would be used to purchase 52,542.94 of its 6% convertible preferreds plus warrants for 905,565 shares of common stock from k1 Ventures Ltd., plus accrued dividends if the new offering closes before March 19.

Semco's 6% convertible preferreds settled Wednesday on the New York Stock Exchange off 0.03 point at 25.95 with 1,600 shares traded.

Semco shares closed Wednesday off 5 cents, or 0.83%, at $6.00 amid heavy volume with 834,800 shares traded, compared with the three-month running average of 74,454.

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