Atmos Energy Agrees to Buy United Cities for $340 Million
April 03, 2011
DALLAS -- Atmos Energy Corp. said Monday it agreed to acquire United Cities Gas Co. in a one-for-one share swap valued at about $340 million. United Cities, of Brentwood, Tenn., is primarily a distributor of natural gas, but also has a small propane delivery business. Atmos, a Dallas-based natural gas concern, said no adjustment will be made to the exchange ratio to reflect changes in its stock price. United Cities shares soared $3, or 18%, to $20 in early-afternoon trading on the Nasdaq Stock Market. Atmos stock tumbled $3.375 to $22.125 in composite trading on the New York Stock Exchange. Atmos agreed to increase the annual dividend to at least $1.02 a share at the first board meeting after the transaction is completed. The current annual dividend is 96 cents a share. The transaction is expected to be tax-free to United Cities shareholders. The combined operations will have annual revenue of about $792 million, and service about 1 million customers in 13 states.
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