SRE: Signals minor shift in strategy w/sale of EnergySouth Inc.

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Auvila_SRE_EnergySouth_Willmut_Sale_2016_04_26

Excerpt:

Market Price (4/26/2016): $101.20/share; ST-Target: $140/share; NIV: $217/share

SRE: Signals minor shift in strategy w/sale of EnergySouth Inc.

  • Sempra US Gas & Power (a unit of Sempra Energy (NYSE: SRE)) signed a definitive agreement to sell EnergySouth, Inc., parent to Mobile Gas Services Corp. (Mobile Gas) and Willmut Gas & Oil Company (Willmut Gas) to The Laclede Group, Inc. (NYSE: LG) for $390MM.
  • Upon closing, SRE would receive $323MM in cash and transfer $67MM in existing debt to the Laclede Group and is expected to book a gain, the amount of which is expected to be announced with the 1Q2016 results.
  • The transaction does not include Bay Gas Storage Company, Mississippi Hub, LLC, Liberty Gas Storage and Southern Gas Transmission.
  • Mobile Gas and Willmut Gas are gas utilities that serve 85,000 customers in southwest Alabama, and 19,000 customers in Mississippi, respectively.

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