Anyone here with an opinion to offer on utility PPL? Huge dilution coming (100M). I am guessing stock should be falling to or below the offering price which was announced yesterday at $24. It's up today though, on exceptionally high volume.
Trying to fathom what's happening here, I see that the acquisition changes the balance of PPL to a much more regulated business, by which PPL's earnings should be more stable and perhaps more predictable. With this, PPL has said:
"*PPL expects to maintain its existing dividend
*Strengthens credit position while maintaining investment-grade ratings
*Modestly dilutive in first full year, moving to earnings accretion by 2013"
I'm substantially punching up my position, although I am not comfortable with the company, the price it's paying for its acquisitions, or its ability to integrate the companies. I am looking for a reversion to mean: in every year in the past ten, the average p/stated bv has been over 2.2x. Current bv, before the issuance of stock, is about $15.6/sh. (per Yahoo) So I'm looking for the stock, now about $24.9, to trade maybe $31-34 within the next 12-18 months. Meanwhile there's a $1.40/sh dividend (yield on $24.90 = 5.6%).
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