Canada's AltaGas to Buy D.C. Utility WGL

By Maria Armental 

Canada's AltaGas Ltd. reached a $6.4 billion deal to buy WGL Holdings Inc., Washington, D.C.'s natural-gas utility, more than tripling its customer base.

The price -- based on $88.25 a share, a 12% premium over Wednesday's closing -- is above the range The Wall Street Journal had reported this month, citing people familiar with the matter.

The deal, subject regulatory and WGL shareholders' approval, is expected to close by the end of the second quarter of 2018.

WGL, which will continue to operate as a stand-alone utility based in the U.S., runs Washington Gas, the former Washington Gas Light. Co., founded by a congressional charter in 1848 and that currently serves more than 1 million customers in the D.C. metropolitan area.

Calgary-based AltaGas secured a $4.95 billion bridge loan from J.P. Morgan Chase Bank, Toronto-Dominion Bank, and Royal Bank of Canada. It will ultimately pay for the deal through a private placement of subscription receipts to Ontario Municipal Employees Retirement System, one of Canada's largest pension funds, and a so-called public bought issue of subscription receipts, along with additional debt, preferred shares and hybrid securities.

Company officials, who didn't take questions during a conference call on Wednesday, said the deal would boost per-share profit and dividend payouts by about 8% to 10% through 2021.

WGL's stock, up 26% over the past 12 months, rose 3.4% to $81.49 in after-hours trading.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

January 25, 2017 21:50 ET (02:50 GMT)

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