Market Overview

Guggenheim: Dominion's Scana Acquisition A 'Big Win'

Share:
Guggenheim: Dominion's Scana Acquisition A 'Big Win'
Related D
Jim Cramer Gives His Opinion On Barrick Gold, Exxon, Nike And More
Another Day, Another Bank Misses On Earnings: Market Could Be On Defensive
Why I Purchased Shares Of Dominion Energy (Seeking Alpha)
Related SCG
8 Biggest Price Target Changes For Monday
Benzinga's Top Upgrades, Downgrades For December 17, 2018

South Carolina regulators approved a merger that has Virginia-based Dominion Energy Inc (NYSE: D) buying South Carolina's Scana Corporation (NYSE: SCG).

What Happened

State regulators approved Dominion Energy's proposed acquisition of Scana, as the deal is expected to benefit state residents via competitive retail and industrial rates, according to South Carolina's The State Media Company. 

Dominion offered consumers a rate cut of up to $22 a month for customers of Scana's subsidiary, SCE&G.

Yet the same 730,000 customers will pay an extra $2.3 billion — average of $1,600 per household — over 20 years for SCE&G's failed nuclear construction project.

Why It's Important

Regulatory approval of the merger is a "big win" for Dominion Energy, as it comes with lighter conditions compared to other proposals, Guggenheim Partners' Shahriar Pourreza said in a note. Prior estimates for the deal to be accretive to Dominion Energy by 2.5-3.5 percent are unchanged and support the company's 6-8 percent growth story "well into the next decade," the analyst said.

Guggenheim downgraded Scana from Buy to Neutral and raised the price target from $49 to $51. 

Dominion Energy's stock is trading near $78 per share. Based on the acquisition exchange ratio of 0.669, Scana's stock is valued at $51.45, which represents a premium to Monday morning's trading price of $50.50.

What's Next

Final written orders from South Carolina's lawmakers are expected to be filed by December 21.

Dominion shares were trading down nearly 2 percent at $75.35 at the time of publication Monday, while Scana shares were down 2.29 percent at $49.86. 

Related Links: 

8 Biggest Price Target Changes For Monday 

Mizuho: Scana Corp. Has Strong Legal Case Against South Carolina Rate Cut

Photo by Edbrown05/Wikimedia. 

Latest Ratings for D

DateFirmActionFromTo
Jan 2019JP MorganDowngradesOverweightNeutral
Jan 2019Bank of AmericaDowngradesNeutralUnderperform
Dec 2018Wells FargoMaintainsMarket PerformMarket Perform

View More Analyst Ratings for D
View the Latest Analyst Ratings

Posted-In: Guggenheim Partners Shahriar PourrezaAnalyst Color News Downgrades Price Target M&A Analyst Ratings Best of Benzinga

 

Related Articles (D + SCG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
CABOKeyBancUpgrades1,025.0
PANWBMO CapitalUpgrades240.0
UAAGoldman SachsUpgrades28.0
FDCBarclaysDowngrades23.0
GPSGoldman SachsDowngrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Mid-Day Market Update: Crude Oil Down Over 1%; Diffusion Pharmaceuticals Shares Spike Higher

Will Oracle Earnings Put Analyst Cloud Concerns to Rest?