UPDATE: Consolidated To Buy Rest Of CNX, Sell $4.5 Billion Of Debt, Stock
22 Marzo 2010 - 5:09PM
Dow Jones News
Consol Energy Inc. (CNX) announced plans to buy the remaining
17% of CNX Gas Corp. (CXG) it doesn't already own for about $965
million. The coal company said it intends to sell at least $4.5
billion worth of stock and debt to help fund that purchase as well
as the pending $3.48 billion acquisition of Dominion Resources
Inc.'s (D) natural-gas business.
The fourth-largest U.S. coal producer said Sunday night that T.
Rowe Price Group Inc. (TROW) has agreed to tender its 9.5 million
shares of CNX Gas--or about 37% of what Consol doesn't already
own--to a tender offer Consol expects to launch at a price of
$38.25 a share. That's a 24% premium to Friday's closing price. The
outstanding stake in Consol is about $965 million.
To finance that planned purchase and the deal announced a week
ago for Dominion's natural-gas assets--which are similar to those
held by CNX--Consol said Monday that it would sell at least $1.75
billion worth of shares and $2.75 billion of seven- and 10-year
notes. Consol's market value is about $8.5 billion.
Consol had said March 15, when it announced the Dominion deal,
that it was considering acquiring the shares of CNX Gas it didn't
already own. This sent CNX Gas shares up 16% that day.
That company's stock recently rose 23% at $37.89. The stock is
up 45% since March 12, the trading day before Consol said it
probably would make the purchase. Meanwhile, Consol's shares
slipped 2.1% to $44.60.
Simmons & Co. International analyst Pearce Hammond said the
deal for CNX Gas wasn't a surprise, but the big premium may have
been. The company did dial back the amount of equity it plans to
raise, increasing the amount of debt instead. He said this was
probably a smart move, although a lot of dilution still will
remain.
The biggest problem Consol will face from making a bid to enter
the gas market is that investors might say they can diversify their
own portfolios and don't want the company to do it for them, he
said. Pure-play investors in gas or coal may not want to own the
company, leaving it stuck in a no-man's land, he said.
Meanwhile, the Dominion deal is seen as helping Consol diversify
away from coal and mitigate the impact of potential carbon
regulation. The deal would add to its existing gas operations and
make Consol one of the largest participants in the Marcellus shale
formation, a huge gas field below West Virginia, Ohio, Pennsylvania
and New York.
Tudor Pickering & Co. Securities analyst Brandon Blossman
said it was largely a foregone conclusion that Consol would buy the
rest of CNX Gas, since it would be hard to figure out how they'd
integrate the Dominion purchase without owning all of it.
Simmons's Hammond agreed, saying it would be much more
complicated to integrate that transaction if the public part of CNX
Gas remains outstanding.
-By Kerry Grace Benn and Nathan Becker, Dow Jones Newswires;
212-416-2353; kerry.benn@dowjones.com
Grafico Azioni Cnx Gas (NYSE:CXG)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Cnx Gas (NYSE:CXG)
Storico
Da Set 2023 a Set 2024