Southern Co (NYSE:SO) and AGL Resources Inc. (NYSE:GAS) have joined hands to form one of the leading U.S. electric and gas utility companies. According to an announcement released this morning, Southern Co will acquire AGL Resources for an enterprise value of $12 billion, including an equity value of nearly $8 billion. The shares of AGL Resources Inc. (NYSE:GAS) are up by 26.87% after the announcement, whereas Southern Co (NYSE:SO) is down by 2.88% in the morning session. The existing shareholders of AGL Resources will receive $66 for every common share of the company, a premium of 38% on the August 21 closing price of AGL Resources. The combined company will have approximately nine million utility customers across nine different states. The transaction is likely to close in the second half of 2016. AGL Resources will operate as a subsidiary of Southern Co (NYSE:SO) while maintaining its own corporate headquarters and management team.
Thomas A. Fanning, CEO, Chairman, and President of Southern Co (NYSE:SO), said, “As America’s leader in developing the full portfolio of energy resources, we believe the addition of AGL Resources to our business will better position Southern Company to play offense in supporting America’s energy future through additional natural gas infrastructure.”
The shares of AGL Resources Inc. (NYSE:GAS) are now up by 9.52% year-to-date and are trading at $61.01 as of the reporting period. The smart money tracked by Insider Monkey maintained a slightly bullish outlook of the company, with 28 hedge funds holding positions worth $205.07 million in the company at end of the second quarter. The number of hedge funds maintaining stakes in the company increased by four in comparison with the previous quarter. A drop of 5.45% in the aggregate holdings during the second quarter can be attributed to the drop of 6.22% in the share price of AGL Resources during that time. The smart money held a similar sentiment for the shares of Southern Co (NYSE:SO), having 19 hedge funds maintaining stakes worth $240.46 million in the company. These figures were better than last quarter net positions of $228.90 million from 21 hedgies, especially after considering the a drop of 5.37% in the share prices of Southern Co during the second quarter.
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Adage Capital Management, led by Phill Gross and Robert Atchinson, was the largest shareholder of AGL Resources Inc (NYSE:GAS) in our database at the end of the second quarter, having ownership of 1.03 million shares valued at $48.09 million. Israel Englander’s Millennium Management held 525,558 shares of the company in its portfolio. Joel Greenblatt’s Gotham Asset Management was at the top of those hedge funds that initiated a new position in the gas distribution company, reporting a new position of 278,120 shares valued at $12.95 million. Glenn Russell Dubin’s Highbridge Capital Management raised its stake in AGL Resources Inc (NYSE:GAS) by 599%. Its stake in the company was valued at $18.68 million from ownership of 401,138 shares as of the end of the second quarter. Among the hedge funds trimming their stakes in the gas distributor, Springbok Capital, led by Gavin Saitowitz and Cisco J. Del Valle, was at the top. The investment firm reduced its stake by 93%, closing the quarter with 725 shares valued at $34,000.
John W. Rogers’ Ariel Investments held the largest stake in Southern Co (NYSE:SO) at the end of the second quarter, of 1.36 million shares valued at $56.94 million. Cliff Asness of AQR Capital Management reported ownership of 1.01 million shares of the company worth $42.51 million. Moore Global Investments, led by Louis Bacon, was at the top of the hedge funds in our database initiating new positions in Southern Co during the quarter. The investment firm added 119,161 shares valued at $4.99 million to its equity portfolio.
Disclosure: None
