Market Overview

Credit Suisse: Don't Buy Columbia Pipleline Stock On TransCanada Deal

Related CPGX
Goldman Bullish On TransCanada, Neutral On Others In The Complex
Jim Cramer Advises Viewers On Silver, Columbia Pipeline, Office Depot, Staples And General Dynamics
Related CPPL
Benzinga's Top Downgrades
TransCanada Makes Shrewd Move To Bid For Columbia Pipeline

Credit Suisse’s John Edwards maintained an Underperform rating for Columbia Pipeline Group Inc (NYSE: CPGX), while raising the price target from $25 to $25.50. The rating for Columbia Pipeline Partners LP (NYSE: CPPL) has been upgraded to Outperform, with the price target being raised from $22 to $23.

Deal Has Been Struck

On Thursday, TransCanada Corporation (USA) (NYSE: TRP) announced its plan to acquire Columbia Pipeline Group for $25.50 per unit, putting the implied acquisition value at $13 billion including the latter’s outstanding debt.

See Also: Columbia Pipeline $13 Billion Deal With TransCanada Confirmed

Columbia Pipeline Partners would continue trading and TransCanada would assume the GP interests in the MLP from Columbia Pipeline Group. “We believe that CPGX's acquisition will result in greater funding optionality with respect to the $7B of Columbia Group commercially secured growth projects,” analyst John Edwards wrote.

Edwards added that the Underperform rating is justified since the implied 8 percent premium of the deal to Columbia Pipeline Group’s current price is “below the median total return of our coverage universe.”

Latest Ratings for CPGX

Apr 2016BMO CapitalInitiates Coverage onMarket Perform
Mar 2016CitigroupMaintainsNeutral
Mar 2016BarclaysMaintainsEqual-Weight

View More Analyst Ratings for CPGX
View the Latest Analyst Ratings

Posted-In: Credit SuisseAnalyst Color Short Ideas Upgrades Price Target Reiteration Analyst Ratings Trading Ideas


Related Articles (CPPL + CPGX)

View Comments and Join the Discussion!