Spectra Energy CorpNYSE
Spectra Energy: Marcellus Footprint Makes This A Compelling Dividend Growth Stock
Michael Fitzsimmons • 15 Comments
Michael Fitzsimmons • 15 Comments
Today, 6:57 PM
- Shareholders have filed five separate lawsuits in two weeks against Spectra Energy (NYSE:SE), alleging the company is selling itself too cheaply to Enbridge (NYSE:ENB).
- The most recent lawsuit criticizes SE’s board for agreeing to several “coercive deal protection devices” in the merger agreement, including a “no solicitation” clause that prevented alternate bidders from coming forward and a $1B termination fee that SE would have to pay if it decides to pursue a competing offer, stipulations the suit says would “chill any potential post-deal market check.”
- Each of the shareholder lawsuits are seeking class action status to represent other shareholders.
Wed, Oct. 19, 3:22 PM
- Enbridge (ENB +1.5%) says it is cutting 530 employees, representing ~5% of its total workforce, the latest in a wave of retrenchment in the hard-hit Canadian oil and gas sector.
- ENB downplays assertions that the cuts are related to its recent $37B merger with Spectra Energy (SE +1.7%), saying the layoffs are part of a review earlier this year aimed at allowing the company to “achieve our strategy of growth and diversification.”
- Of the cuts, 370 of which are from ENB's Canadian division and the other 160 are U.S. positions.
Wed, Oct. 19, 9:42 AM
Wed, Oct. 12, 2:48 PM
- Five oil pipelines that carry millions of barrels of crude to the U.S. from Canada have restarted after being shut down by environmental protesters yesterday, although at least one of the lines was operating at reduced rates.
- Company reps for TransCanada (NYSE:TRP) and Spectra Energy (SE, SEP) say their respective Keystone and Express pipelines both restarted yesterday afternoon, and Kinder Morgan (NYSE:KMI) says the spur of the pipeline impacted by the protesters is not operating but it has since restarted the rest of the pipeline.
- Enbridge (ENB, EEP) has not disclosed the situation at its Mainline pipeline, but Genscape says the pipeline has resumed normal flows.
Wed, Oct. 12, 12:28 PM
- Yesterday's sabotage of five cross-border pipelines that together can send 2.8M bbl/day of crude to the U.S. from Canada illustrated the vulnerability of North America's oil and gas pipeline system to low-tech attacks.
- The cost of posting armed guards at valve stations, usually found every 20 miles along underground pipelines, would be prohibitive, says Stewart Dewar, a project manager at Senstar, a company that authored a 2012 white paper on pipeline security; instead, the stations usually are protected by nothing more than an ordinary chain link fence and padlocks.
- Environmental groups say their actions against pipelines owned by Enbridge (NYSE:ENB), TransCanada (NYSE:TRP), Spectra Energy (NYSE:SE) and Kinder Morgan (NYSE:KMI) were an attempt to draw attention to climate change and support opponents of Energy Transfer Partners' (NYSE:ETP) proposed Dakota Access Pipeline.
- The acts caused no leaks yesterday, but pipeline operators and safety experts say shutting off valves was extremely dangerous and that activists underestimated the risks.
Tue, Oct. 11, 5:24 PM
- Environmentalists say they shut down five pipelines carrying crude from Canadian oil sands into the U.S., the latest move by activists to disrupt movement of oil across North America.
- Spectra Energy (NYSE:SE), one of four companies affected, says trespassers tampered with a valve on its Express Pipeline in Montana, forcing it to shut down the line as a precaution.
- The other pipelines claimed to have been shut in are Enbridge's (NYSE:ENB) Lines 4 and 67, TransCanada's (NYSE:TRP) Keystone pipeline, and Kinder Morgan's (NYSE:KMI) Trans Mountain pipeline; ENB says it shut pipelines at a valve site in Minnesota after trespassers cut chains and attempted to turn off vales.
- The Climate Direct Action group says it shut down the pipelines to stand in solidarity with the Native American tribe that has been protesting the construction of the Dakota Access pipeline.
Tue, Sep. 27, 12:58 PM
- Investors likely are underestimating the earnings potential of the Enbridge (ENB -0.1%) and Spectra Energy (SE -0.1%) combination, CIBC analyst Robert Catellier says.
- Catellier says prospective financial information in the prospectus shows 2018 cash flow projections are 18% higher than currently expected, so “it appears to us that there is a healthy discount between estimates and company projections.”
- The proxy statement for the merger also shows that SE pushed for an all-stock transaction and showed “considerable confidence” in the dividend growth of the company following the merger, Catellier says. while Enbridge initially offered a combination of stock and cash.
- CIBC rates ENB as a Sector Outperformer with a $71 12-18-month price target.
Mon, Sep. 26, 3:22 PM
- Spectra Energy (SE -1.4%) is downgraded to Hold from Buy at Argus, as its current share price is higher than Enbridge's $40.33 offer price, but the firm views the merger favorably.
- Argus likes the strong exposure of SE's natural gas transportation business to the Marcellus shale and says the company iswell positioned to benefit from increasing demand for natural gas.
- The firm thinks SE's expansion opportunities through the end of the decade will support above-average dividend growth, and adds that the recent awarding of a Mexican pipeline project signals possible resumption of capital spending in the energy sector.
Tue, Sep. 13, 1:37 PM
- Enbridge (ENB -4.2%) has indicated that the MLPs it amasses from its $28B takeover of Spectra Energy (SE -4.4%) will continue to be operated separately, but analysts say they are headed for some sort of consolidation in the long run.
- While ENB and SE rallied following their merger news, results have been mixed for Spectra Energy Partners (SEP -1.6%), Enbridge Energy Partners (EEP -3.2%), Midcoast Energy Partners (MEP -1.3%) and DCP Midstream Partners (DPM -5.4%) - the MLP jointly owned by SE and Phillips 66 - highlighting investor concerns about the post-merger fate of the units.
- ENB may take 2-3 years to decide the structure of its MLPs after closing on SE, says Hennessey Gas Utility Fund's Skip Aylesworth, adding that when it finally happens, “you might end up with two of the four” units.
Mon, Sep. 12, 10:58 AM
- Spectra Energy (SE -0.2%) is downgraded to Neutral from Buy with a $44 price target, raised from $39, at UBS, to reflect the current share value implied by the exchange ratio for the planned merger with Enbridge.
- UBS expects the deal will close in Q1 2017 as planned given that there are minimal overlaps in the companies' business and limited regulatory risk.
- The firm sees dividend growth rate for the combined company to accelerate to 15% in 2017 and 10%-12% 2018-24 vs. the previous stand-alone growth rate of high single-digits, and raises its EBITDA estimates for the next three years to reflect an improved outlook for SE's equity investment in DCP Midstream.
Thu, Sep. 8, 10:26 AM
- Enbridge (ENB +3.5%) is upgraded to Buy from Neutral with a $48 price target, raised from $43, while proposed merger partner Spectra Energy (SE +4.3%) is downgraded to Neutral from Buy with a $42 price target at Goldman Sachs.
- Goldman thinks ENB’s medium-term growth outlook is robust, although there could be a decline in large-scale organic project associated with the oil sands, which could be a risk to long-term growth.
- The firm believes the proposed ENB-SE deal highlights the value of existing pipeline assets and natural gas infrastructure, adding that "deceleration in midstream capex could encourage companies to pursue acquisition opportunities to sustain growth."
Tue, Sep. 6, 7:45 PM
- Spectra Energy (NYSE:SE) surged +13.4% in today's trade for its biggest gain in more than three years, even staying above the original $40.33/share value of Enbridge's (NYSE:ENB) $28B all-stock offer, as traders clearly believe that antitrust and financing concerns are minimal and that the premium paid for SE was modest considering potential synergies.
- The deal has no serious antitrust problems, as the companies' networks have "limited overlap," according to Jones Day antitrust expert Bruce McDonald.
- Bloomberg's Liam Denning says combining the two companies "should entrench their advantage when it comes to raising money. Reassuring the capital markets is the no. 1 skill any pipeline executive requires in the aftermath of the crash."
- While ENB closed +5% and the Enbridge Energy Partners (NYSE:EEP) MLP ended +2.5%, Spectra Energy Partners (NYSE:SEP) was -1.3% as investors believed that the MLPs would be merged, even though the parent companies said it was not part of their current plans.
- SEP, which operates natural gas pipelines, has the lowest cost of capital in the group and would be diluted if it combines with EEP, which is more in crude pipelines, says Rob Thummel of Tortoise Capital, adding that he does not believe the MLPs will be combined.
Tue, Sep. 6, 2:02 PM
Tue, Sep. 6, 9:14 AM
Tue, Sep. 6, 7:17 AM
- Enbridge (NYSE:ENB) agrees to acquire Spectra Energy (NYSE:SE) in an all-stock deal valued at ~C$37B ($28B) that will create North America's largest energy infrastructure company.
- SE shareholders will receive 0.984 shares of the combined company for each SE share they own, the equivalent of $40.33/share, representing a ~11.5% premium to SE's closing price on Friday.
- After the deal, ENB shareholders will own ~57% of the combined company, while SE shareholders will own ~43%.
- The combined company will be called Enbridge Inc. and upon closing will be the largest energy infrastructure company in North America with a US$127B enterprise value.
- The companies’ MLP,s Spectra Energy Partners (NYSE:SEP) and Enbridge Energy Partners (NYSE:EEP), will continue to be separate publicly traded companies; SE also owns a 50% stake in DCP Midstream Partners (NYSE:DPM).
- SE +5.8% premarket.
Wed, Aug. 24, 8:45 AM
- Spectra Energy's (SE, SEP) Access Northeast pipeline expansion project faces a setback after major customers National Grid (NYSE:NGG) and Eversource Energy (NYSE:ES) say they will not buy capacity on the pipeline in Massachusetts.
- The electric utilities had filed petitions with the Massachusetts Department of Public Utilities for 20-year agreements to take gas.
- The withdrawals come after the Supreme Judicial Court of Massachusetts last week blocked a plan that would have allowed the companies to pass along the costs of signing up to the pipeline to consumers.
- SE says the project is still moving forward, and that NGG and ES still are co-developers; SE could find other customers for the capacity, in Massachusetts or in other states.