Molina prices 4 million share offering at $27 per share to pay back debt

Molina prices share offering at $27 per share

LONG BEACH, Calif. — Molina Healthcare Inc. will price its 4 million share offering at $27 each.

The company announced the pricing late Tuesday, making the offering worth $108 million.

The offer is slightly below the company’s current stock price. Shares fell 34 cents in premarket trading Wednesday to $27.54, as many indexes sold off in electronic trading.

The health insurer announced its offering last week. It plans to use the proceeds to pay back debt under its $200 million senior secured credit facility, which had a balance of $105 million on July 30.

The underwriters of the sale will have the option to buy another 600,000 shares. Stock offerings increase the number of shares on the market, which can dilute the value of existing stock. The company said of the 600,000 shares, 250,000 will be offered by a stockholder, so proceeds from that sale will not go to Molina.

Bank of America Merrill Lynch and J. P. Morgan Securities Inc. are joint book-running managers for the offering. UBS Securities LLC, Mitsubishi UFJ Securities, Inc. and Stifel, Nicolaus & Company, Inc. are co-managers.