AltaGas Income Trust sweetens bid for AltaGas Utility Group shares

By The Canadian Press

CALGARY - Share of AtlaGas Utility Group (TXSX: AUI) rose nearly 16 per cent Monday after AltaGas Income Trust (TSX: ALA-UN.TO) sweetened its offer for all outstanding common shares of the Utility Group that it doesn't already own.

The new offer of $10.50 a share is 16 per cent above the income trust's original bid of $9.05 a share.

It also represents a 68 per cent premium to the $6.25 closing price of the Utility Group's common shares on the Toronto Stock Exchange on Aug. 14, the last trading day prior to the announcement of the original Offer.

AltaGas's new offer comes in response to an unspecified "superior proposal" received by the Utility Group after AltaGas's original bid, the two companies said in a joint news release Monday.

Utility Group shares rose $1.43 to $10.50 in trading Monday on the TSX. AltaGas units were up seven cents at $17.17.

AltaGas valued its earlier, Aug. 17 bid for the 80.2 per cent of the Utility Group it didn't already own at $200 million, including assumed debt of $130 million.

Expiration of the new offer remains the same, Oct. 7 at 5 p.m. Calgary time.

The amended offer remains subject to certain conditions, including the acceptance by the holders of at least two-thirds of the outstanding Utility Group common shares, excluding those held by AltaGas and its affiliates.

AltaGas Utility Group has agreed to support the amended offer and to pay AltaGas a termination fee of $3.9 million under certain circumstances. Other terms of the agreement remain substantially unchanged.

AltaGas Income Trust is an energy infrastructure company with a focus on renewable energy sources.

AltaGas Utility Group holds interests in AltaGas Utilities Inc., Heritage Gas Ltd. and Inuvik Gas Ltd. which serve a combined 71,000 customers through more than 20,000 kilometres of pipelines. The Utility Group also holds an interest in the Ikhil joint venture, which produces natural gas in Inuvik, NWT.