Gas Natural Inc. has rejected a trio of unsolicited takeover offers from Algonquin Power & Utilities since January, the Mentor, OH-based utility holding company said Monday.
Algonquin has proposed to acquire all Gas Natural shares for $10 each, a roughly 20% premium at the time the offers were made: Jan. 14, March 5 and May 7. Gas Natural is not for sale, the company said.
"The board of directors was unanimous in its belief that the offers made by Algonquin undervalued the potential of the company and were not in the best interests of all of our shareholders," said Gas Natural Chairman W. Gene Argo. "The board also believes that under the management of both our newly appointed CEO and CFO, we have the leadership the company needs to advance our strategy and drive quality, sustainable earnings power and growth."
Gas Natural shares closed up more than 5% Monday at $11.71 after heavy trading. The company has a market capitalization of $122.8 million. Algonquin shares closed down slightly at $8.08; its market capitalization is $1.67 billion.
Last week Gas Natural issued a press release in which it called erroneous a July 11 news report that said the company was up for sale.
Gregory J. Osborne became CEO of the company in May after his father, Richard M. Osborne, was ousted following what the company described as a verbal altercation between the elder Osborne and company board members and Gas Natural's legal counsel, according to a report by Crain's Cleveland Business.
The elder Osborne, who was also chairman of the company's board, filed a lawsuit against Gas Natural in late June seeking "payment of an earnout associated with Gas Natural's purchases of assets from John D. Marketing," the company disclosed in a regulatory filing. The elder Osborne also alleges, among other things, that the board breached its fiduciary duties by removing him from the chairman and CEO posts.
According to the company, in rejecting the Algonquin offers the board considered its long-term business strategy, which includes expanding distribution systems and growing customer base; acquiring utilities that are either adjacent to current operations or are in under-served markets; and improving efficiencies.
"We continue to make solid progress with building our accounting staff, enhancing processes and controls that address regulators' preferences, strengthening our relations and communications with the regulatory bodies of each jurisdiction in which we operate, and creating a culture of transparency and safety," said Gas Natural CEO Gregory J. Osborne. "Strategically, we are evaluating our assets to ensure we can generate strong earnings growth, which also includes the consideration of what may be less strategic assets."
Gas Natural utilities serve about 73,000 customers in Montana, Wyoming, Ohio, Pennsylvania, Maine, North Carolina and Kentucky. It also has interstate pipeline, natural gas production and natural gas marketing operations.