Enbridge slumps on surprise $14 billion bid for gas-powered utilities
investing.com(Reuters) — U.S.-listed shares of Enbridge (NYSE:ENB) Inc tumbled nearly 7% in premarket trading on Wednesday after the Canadian pipeline operator announced a surprise $14 billion bid to buy three utilities from Dominion Energy (NYSE:D).
The move to acquire East Ohio Gas, Questar Gas, and Public Service Co of North Carolina will make Enbridge the largest gas utility by volume in North America, with the unit accounting for a bit less than a fourth of the company's overall business mix.
Morningstar analysts called the deal a «defensive move».
«Despite the size of the transaction, Enbridge is leaving its 5% annual EBITDA growth expectation over the medium term, which suggests to us that the earnings contribution is replacing weaker results on the liquids side of the business,» Morningstar analyst Stephen Ellis wrote in a note.
J.P.Morgan analysts, however, said that although the deal would enhance Enbridge's business profile over time, the market had a lot to digest in the near-term and that was likely driving share price volatility.
Read more on investing.com
