$42.50-a-share bid tops Monday’s close by 21%
Private-equity firm KKR has approached UGI Corp. with a takeover offer of roughly $9 billion, or $42.50 a share, according to people familiar with the matter. The proposed price represents a 21% premium over UGI’s $35.09 closing price Monday, which gave the company a market value of approximately $7.5 billion. The sources cautioned that there are no guarantees a sale to KKR or any other buyer will materialize, and it could not be learned whether UGI will be receptive to the approach.
Based in King of Prussia, Pennsylvania, UGI operates natural-gas and electric utilities, the propane retailer AmeriGas, and a network of natural-gas pipelines and storage facilities. The company also distributes liquefied-petroleum products in Europe.
The bid arrives as surging demand for steady, reliable sources of electricity from artificial-intelligence data centers has made natural-gas power producers attractive acquisition targets after years of investor neglect. The shift was underscored earlier this year when private-equity firm Energy Capital Partners sold Calpine to Constellation Energy — a transaction on track to become the most profitable private-equity deal of all time.
Natural-gas prices have fallen recently, owing to strong U.S. production and high storage surpluses, a market backdrop that has done little to dampen private-equity interest in the fuel’s infrastructure. UGI shares have lagged broader equity benchmarks over the past year, rising less than 2% compared with a 20% gain for the S&P 500.
Lauren Thomas of The Wall Street Journal reported the offer.