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Piedmont Natural Gas Company (NYSE:PNY) soared on Monday after Duke Energy (NYSE:DUK) made a premium priced cash offer to buy the company.
Pitched at US$60 per Piedmont share, the offer is valued at US$4.9bn and it represents a premium of around 40% to the stock’s closing price on Friday.
The combination of Duke, one of America’s largest electricity groups, and natural gas distributor Piedmont will deliver compelling value to our shareholders, according to Tom Skains, Piedmont chief executive.
Lynn Good, Duke chief executive, meanwhile, said: "This combination provides us with a growing natural gas platform, benefitting our customers, communities and investors."
As well as the cash acquisition, Duke will take on some US$1.8bn of Piedmont debt. The total enterprise value of the deal is therefore US$6.7bn.
The transaction is supported by Barclays, which is providing a fully underwritten bride loan.
Closing of the transaction is targeted for the end of 2016.
In New York, Piedmont shares gained US$16, 38%, per share to trade at US$58.26 while Duke was down US$1.92, 2.6%, at US$71.79.