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Orchard Supply Hardware Stores preferreds begin trading after spinoff
By Angela McDaniels
Tacoma, Wash., Jan. 3 - Orchard Supply Hardware Stores Corp.'s series A preferred stock began trading on the OTCQB under the symbol "OSHSP" on Tuesday.
The preferreds opened at $0.45 and closed at $1.25.
Orchard Supply was a subsidiary of Sears Holdings Corp. until Friday, when it was spun off to Sears' shareholders. Holders received one preferred and one share of Orchard Supply class A common stock for every 22.1417777 shares of Sears common stock held as of Dec. 16.
The preferreds do not pay dividends.
Subject to some conditions, the preferreds are callable in whole at a redemption price equal to the liquidation preference.
The liquidation preference for each preferred is $20 million divided by the total number of preferreds.
According to a 424B3 filing made with the Securities and Exchange Commission on Dec. 16, there were 4,806,000 preferreds in all prior to the distribution. This number was subject to reduction based on the amount of cash paid in lieu of fractional preferreds.
Based on the 4,806,000 figure, the liquidation preference would be about $4.16 per preferred.
The company operates retail hardware supply stores and is based in San Jose, Calif.
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