UtiliCorp to Buy Back All AQP Shares at a 23% Premium
After taking Aquila Gas Pipeline off the auction block in
August, UtiliCorp United announced plans last week to buy back 5.4
million common shares of the company, representing the 18% of
outstanding AQP common shares it does not already own, for $8 per
share. The price represents a 23% premium to the closing AQP share
price of $6.50 on Nov. 11.
"It simply allows us -- since we were unsuccessful in finding a
strategic alternative earlier this year -- [to gain] 100% control,"
UtiliCorp CEO Richard C. Green said in an interview with NGI. "We
could do many different things with it. It could be selling it. It
could be merging it. It could be continuing to buy property. I mean
we'll continue to buy and grow it because we can't let this
"We like midstream assets. What we don't like is the sensitivity
to liquids prices that we have in the current assets that we have,"
he said. "We don't have any plans at this point in time that we can
talk about other than what we did today."
UtiliCorp sold the 18% stake in 1992 in an initial public
offering of AQP. Previously, the company was a wholly owned
subsidiary. The repurchase proposal has been submitted in a letter
to the chairman of the board of Aquila Gas Pipeline and an
independent committee of the board of directors. Any agreement with
regard to the proposed buyback of shares, including the form of
consideration to be paid, is subject to negotiations and agreement
with the independent committee.
Based in San Antonio, AQP gathers, processes and markets natural
gas and natural gas liquids through its natural gas gathering
systems and gas processing plants in Texas and Oklahoma. AQP share
prices rose sharply yesterday, following the announcement. Prices
jumped 33%, or $2.19, during the day to close at $8.69/share.
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