Re: CVX - Still have all my shares from TX which was acquired in 2002.
Other small Buys:
KR (was lower after WMT earnings); ZBH (part of my Medical Device buys) & UGI
UGI has earnings after the close. I have built an over size position based on the Graham No. Valuation at/near $43/share. But more interesting is UGI hired Goldman Sachs to look at asset sales (maybe their AmeriGas Division) to help stabilize earnings and not be so impacted by the NG/Propane commoddity prices.
UGI Corporation (NYSE: UGI) acquired Amerigas Partners, L.P. (NYSE: APU) in a cash-and-stock deal valued at $2.44 billion in April 2019. The total merger consideration was $31.745 per Amerigas Partners share. This consisted of $7.63 in cash and $24.115 in UGI Corp shares per Amerigas Partners share.
The deal involved UGI acquiring the approximately 69.2 million public common units of AmeriGas it did not already own, representing a 21.9% premium to AmeriGas' 30-day volume-weighted average price and a 13.5% premium to the April 1, 2019 closing price of $31.13. Amerigas unitholders also continued to receive a $0.95 per unit distribution for each quarter completed prior to the closing of the merger.
As a result of the acquisition, AmeriGas became a wholly owned subsidiary of UGI and is no longer a Master Limited Partnership (MLP). This change in structure is expected to provide UGI with greater flexibility and access to capital, as well as simplify its corporate governance structure.
and then this
As of today, November 15, 2023, there has been no official update on the Goldman Sachs review of UGI Corp or the potential sale of its Amerigas unit. The company announced its intention to conduct a strategic review in September 2023, with the goal of exploring options to reduce earnings volatility and strengthen its balance sheet. The review is expected to encompass a wide range of potential actions, including the sale of assets, strategic partnerships, or even a full-fledged acquisition of the company.
While there has been no official confirmation of the Amerigas sale, some analysts have speculated that it could be a viable option for UGI. Amerigas is a significant contributor to UGI's earnings, but it has also been a source of volatility in recent years due to fluctuations in propane prices. Selling Amerigas could help UGI to reduce its exposure to commodity markets and make its earnings more predictable.
However, any decision to sell Amerigas would likely face scrutiny from investors, as it would represent a significant departure from UGI's core business of natural gas distribution. Additionally, finding a buyer for Amerigas at a satisfactory price could be challenging given the current economic environment.
Ai Bard came up w/ possible buyer:
- DCP Midstream LLC: With a market capitalization of over $10 billion, DCP Midstream has the financial resources to make a significant acquisition like Amerigas.
- Phillips 66 Partners LP: Phillips 66 Partners has a market capitalization of over $16 billion, making it a financially capable acquirer of Amerigas.
DCP Midstream was acquired by Phillips 66 (PSX) in January 2023 for $3.8 billion. The deal was completed in June 2023, and PSX now owns 86.8% of DCP Midstream's outstanding common units. This makes PSX the majority shareholder of DCP Midstream.
The acquisition was part of PSX's strategy to expand its midstream business and gain exposure to the growing propane market. DCP Midstream is a leading propane distributor in the United States, and the acquisition will help PSX increase its propane production and distribution capabilities.
AmeriGas might sell for $3 Billion if it is sold |
