Piedmont Natural Gas Co Inc.NYSE
Fri, Jan. 15, 6:58 PM
- Four consumer and environmental groups agree to stop fighting Duke Energy's (NYSE:DUK) Edwardsport coal gasification plant in Indiana and join the company's settlement reached with other parties in September.
- In addition to absorbing $87.5M in operating costs of the plant since it began operations in June 2013, DUK says it will stop burning coal within seven years at its New Albany power plant, provide energy assistance for needy customers, and spend $500K for solar projects at churches, schools and other community sites.
- If the settlement is accepted by the Indiana Utility Regulatory Commission, litigation related to the plant effectively would end.
- Separately, DUK files for approval with the North Carolina Utilities Commission of its $4.9B acquisition of Piedmont Natural Gas (NYSE:PNY).
Dec. 22, 2015, 11:25 AM
- Duke Energy (DUK +0.4%) says the FTC has granted antitrust approval for its proposed $4.9B acquisition of Piedmont Natural Gas (PNY +0.3%), clearing a key condition needed for completion of the deal.
- The deal still requires approval by PNY shareholders and the North Carolina Utilities Commission; the two companies continue to target closing by the end of 2016.
Oct. 27, 2015, 6:21 PM
- Duke Energy's (NYSE:DUK) $4.9B deal to buy Piedmont Natural Gas (NYSE:PNY) includes a $250M breakup fee DUK would pay PNY if it fails to obtain approval from regulators including the North Carolina Utilities Commission - a hefty 5.1% of the deal total, and double the fee PNY would have to pay if its board gets cold feet or finds a better deal.
- The fee could be a reflection that PNY understands the regulatory risks inherent in utility deals, says the University of Chicago's Steven Kaplan, who thinks PNY is "worried" and wants a promise from DUK that the deal will be worth the likely interim disruption.
Oct. 26, 2015, 3:31 PM
- Duke Energy (DUK -2%) is paying too much for Piedmont Natural Gas (PNY +36.7%) in "almost any reasonable scenario," Citigroup’s Praful Mehta asserts.
- DUK is paying ~$4.9B, a $1.4B premium (~40%) vs. PNY's Oct. 23 closing price and close to 4x book value, and "no synergy bridge gets you to $1.4B," Mehta says, also noting the premium is relative to a 52-week high stock price for PNY.
- Mehta considers the deal "a red flag" on management's direction: "Firstly, is there a meaningful problem in the growth profile of the underlying business (LatAm)? Secondly, would management rather destroy value to hold on to a growth target that may not be achievable rather than realign growth targets?"
Oct. 26, 2015, 7:12 AM
- The all-cash deal works out to $60 per share for Piedmont (NYSE:PNY), about a 40% premium to Friday's $42.21 close. Duke (NYSE:DUK) will also assume roughly $1.8B in PNY existing net debt, bringing the total enterprise value to $6.7B.
- The two hope to close the deal by year-end 2016.
- A conference call is set for 8:30 ET.