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Strategies & Market Trends : Dividend investing for retirement
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To: E_K_S who wrote (23476)11/21/2015 4:33:20 PM
From: the Zwei1 Recommendation

Recommended By
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AGL Resources Shareholders Okay Merger with Southern
zacks.com

Shareholders of energy services holding company AGL Resources Inc. ( GAS - Analyst Report) have approved its proposed merger with Southern Company ( SO - Analyst Report), which was announced on Aug 24.

The shareholders also gave their consent to the compensation that the company’s executives are expected to receive following the merger. Both parties are now awaiting approval from the federal and state regulatory bodies. The deal is expected to close in the second half of next year.

Per the original terms of the deal, the stockholders of AGL Resources will get $66 per share. The company would become the third-largest operating subsidiary of Southern Company.

Management at AGL Resources expects the deal to bring new growth opportunities for the firm. Also, the combination with Southern Company will enhance shareholder value. Post acquisition, the merged company will become the second-largest U.S. utility company, Exelon Corporation ( EXC - Analyst Report) being the largest one. Interestingly, even post acquisition, AGL Resources will continue to work with its own management team.

AGL Resources Inc. is an energy services holding company whose principal business is gas distribution. The company has a relatively low risk earnings growth profile. Positioned in a niche industry with high barriers to entry, this energy services holding company enjoys near monopoly in its area of operation. However, we expect shareholder sentiment towards AGL Resources to remain lukewarm. This is owing to factors like the company’s investment in higher-risk unregulated operations, ongoing regulatory uncertainties and the poor market environment.

AGL Resources currently carries a Zacks Rank #3 (Hold).
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