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8-K - FORM 8-K - NORTHERN ILLINOIS GAS CO /IL/ /NEW/ | c61709e8vk.htm |
EX-99.2 - EX-99.2 - NORTHERN ILLINOIS GAS CO /IL/ /NEW/ | c61709exv99w2.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AGL RESOURCES AND NICOR TO COMBINE IN $8.6 BILLION TRANSACTION
Nicor Shareholders to Receive Cash and Stock Valued at $53.00 per Share
Creates a New U.S. Leader in Natural Gas with 4.5 Million Distribution Customers
Neutral to AGL Resources EPS in First Full Year Following Transaction Close and Accretive
Thereafter; Enhances EPS Growth and Maintains Credit Quality
Thereafter; Enhances EPS Growth and Maintains Credit Quality
Complementary Unregulated Businesses with Enhanced Opportunities
Low Rates Expected to Continue for Customers; Continued Commitment to Safe, Reliable
Cost-Effective Service
Cost-Effective Service
Maintains
Corporate Headquarters in Atlanta and
Establishes Gas Distribution Headquarters in Naperville, Illinois
Establishes Gas Distribution Headquarters in Naperville, Illinois
ATLANTA and NAPERVILLE, Ill., December 7, 2010 AGL Resources (NYSE: AGL) and Nicor Inc.
(NYSE: GAS) today announced that the Boards of Directors of both companies have approved a
definitive merger agreement to create a leading U.S. natural gas distribution company. Pursuant to
the agreement, Nicor will merge with a subsidiary of AGL Resources in a transaction with an
enterprise value of $3.1 billion, including a total equity value of $2.4 billion. The combined
entity will have an enterprise value of $8.6 billion. Following the merger, AGL Resources, expected
to become a Fortune 500 company, will maintain its corporate headquarters in Atlanta, Georgia and
locate its newly expanded gas distribution headquarters in Naperville, Illinois, a suburb of
Chicago.
Under the terms of the agreement, Nicor shareholders will be entitled to receive for each share of
Nicor common stock, $21.20 in cash and 0.8382 shares of AGL Resources common stock, which together
represent a value of $53.00 based on the volume-weighted average price for AGL Resources common
stock for the 20 trading days ended December 1, 2010 (the last unaffected Nicor trading day).
Following the completion of the merger, it is anticipated that AGL Resources shareholders will own
approximately 67 percent and Nicor shareholders will own approximately 33 percent of the combined
company.
The transaction is anticipated to be neutral to AGL Resources earnings per share (EPS) in the
first full year following the close and accretive thereafter. The transaction is anticipated to
enhance EPS growth and maintain credit quality. The companies expect to complete the transaction in
the second half of 2011.
The consideration of $53.00 per share for Nicor shareholders represents a premium of approximately
22 percent to the unaffected closing stock price of Nicor on December 1, 2010, and an approximately
17 percent premium to the average stock price of Nicor over the last 20 days ending December 1,
2010.
The combination creates a leading U.S. natural gas distribution company with:
| Approximately $5.1 billion in annual revenues and EBITDA of $1.1 billion (combined figures as of September 30, 2010); | |
| Seven regulated natural gas distribution companies providing natural gas service to approximately 4.5 million customers in Illinois, Georgia, New Jersey, Virginia, Florida, Tennessee and Maryland, with a rate base of $3.8 billion; | |
| Over 1 million retail customers in the unregulated businesses; | |
| Physical wholesale gas business delivering approximately 4.7 billion cubic feet (Bcf) per day to gas customers; and | |
| Expertise and facilities across the natural gas storage value chain that will provide 31 Bcf of storage in 2012 with expansion potential up to 90 Bcf. |
This is an exciting transaction for both AGL Resources and Nicor. Together we will establish a
platform for growth that is superior to what either company could achieve on its own, said John W.
Somerhalder II, AGL Resources chairman, president and chief executive officer. AGL Resources has
a proven track record of successful acquisitions and integrations spanning the last decade. Our
prudent acquisitions have allowed us to improve and provide services to our customers at a much
lower cost, while taking an active role in supporting the communities we serve. Georgia has
supported our growth strategy and we are proud that we can enhance our corporate presence in
Georgia while expanding gas operations in Illinois. By combining with Nicor, we will be able to
enhance earnings growth while maintaining a strong balance sheet and improving cost-effectiveness.
As a result of this transaction, we will have increased scale and greater diversity in both our
regulated operations and unregulated businesses, Mr. Somerhalder continued. We will effectively
double the number of utility customers we serve, and by sharing best practices, and through the
benefits of greater scale, we will be able to serve those customers better and more efficiently. We
also will be establishing our gas distribution headquarters in Naperville, Illinois, a suburb of
Chicago. In addition, AGL
Resources and Nicor have complementary unregulated businesses, which will be a source of
significant incremental growth opportunities and savings.
This transaction provides our shareholders with a significant premium for their shares, the
opportunity for ownership in a combined company with upside potential for growth and a substantial
dividend uplift immediately following closing, said Russ M. Strobel, Nicors chairman, president
and chief executive officer. Equally as important, Im delighted to be able to assure Nicors 2.2
million natural gas utility customers that they can continue to rely on the same local gas company
with a well-deserved reputation for providing safe, reliable, cost-effective service, and the same
people whom theyve come to know and trust.
On behalf of Nicors Board and management team, I would like to express our deep appreciation to
our employees, whose dedication and hard work have been instrumental in making Nicor the
outstanding company it is today, continued Mr. Strobel. Weve found a strong partner in AGL
Resources with its complementary businesses, excellent reputation and shared values. AGL Resources
has committed to maintaining job levels across the Nicor Gas service territory, continuing our
strong tradition of community and philanthropic support and exceptional service to customers. We
look forward to working with AGL Resources to ensure a smooth transition and complete the
transaction as expeditiously as possible.
Strategic and Financial Benefits of Transaction
| Accelerates AGL Resources EPS growth while maintaining a strong financial profile with an investment grade credit rating. |
| The transaction is anticipated to be neutral to AGL Resources EPS in the first full year following the close and accretive thereafter. The transaction is expected to enhance EPS growth and maintain credit quality. | ||
| Solid balance sheet that supports pro-growth dividend policy. |
| Establishes strong operating cash flows to fund growth with expected spend of approximately $450 million per year on gas utility infrastructure. | |
| Enhances diversification, scale, and geographic reach of regulated gas utility operations. | |
| Provides wider market opportunities for AGL Resources and Nicors complementary unregulated retail, wholesale and storage businesses. | |
| New revenue opportunities and cost synergies expected across unregulated wholesale and retail businesses, with minimal cost to achieve, in addition to the elimination of duplicate public company costs. | |
| Customers will continue to experience the same high quality, reliable and cost-effective service. |
| Future investment will be spread across a larger customer base. | ||
| AGL Resources and Nicor will share and implement best practices across all businesses. |
| Expands investor base and broadens research and institutional coverage. | |
| Recent rate cases provide earnings transparency. |
Structure and Organization
The combined company will be known as AGL Resources. Following the merger, AGL Resources will
maintain its corporate headquarters in Atlanta, Georgia and locate its newly expanded gas
distribution headquarters in Naperville, Illinois. The combined companys customers will continue
to be served by their current gas utility companies.
Mr. Somerhalder will continue to serve as chairman, president and chief executive officer of AGL
Resources. The AGL Resources Board of Directors will include four directors from Nicor. A
transition team comprised of senior executives from both companies will lead the integration.
Financing
AGL Resources will pay for the transaction through an exchange of stock with Nicor shareholders in
addition to approximately $1 billion of cash. AGL Resources has committed financing from Goldman
Sachs Bank USA, and plans to put long-term financing in place, consisting exclusively of bonds,
prior to the closing of the transaction.
Approvals and Timing
The merger is conditioned upon, among other things, the approval of shareholders of both companies,
approval by the Illinois Commerce Commission, the expiration or termination of any applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and approval by the
Federal Communications Commission. The companies expect to complete the transaction in the second
half of 2011.
Advisors
Goldman, Sachs & Co. is acting as exclusive financial advisor and Dewey & LeBoeuf LLP is acting as
legal counsel to AGL Resources. J.P. Morgan is acting as exclusive financial advisor, Latham &
Watkins LLP is acting as legal counsel to Nicor and Sidley Austin LLP is acting as legal counsel to
Nicors Board of Directors.
Conference Call and Webcast
AGL Resources and Nicor will host a conference call and a live Internet webcast along with a slide
presentation today at 8:30 a.m. ET to discuss this combination. The dial-in number to participate
on this call is (800) 821-1449, confirmation code 30174896. International callers should dial (973)
935-2840, confirmation code 30174896.
A replay will be available for one week following the live webcast through December 14, 2010. The
live webcast of the conference call may be accessed through the investor relations section on AGL
Resources web site at www.aglresources.com and Nicors web site at www.nicor.com. Participants
should allow approximately five to ten minutes prior to the presentations start time to visit the
site and download any streaming media software needed to listen and view to the Internet webcast.
About AGL Resources
AGL Resources (NYSE:AGL), an Atlanta-based energy services company, serves approximately 2.3
million customers in six states. The company also owns Houston-based Sequent Energy Management, an
asset manager serving natural gas wholesale customers throughout North America. As an 85-percent
owner in the SouthStar partnership, AGL Resources markets natural gas to consumers in Georgia under
the Georgia Natural Gas brand. The company also owns and operates two high-deliverability natural
gas storage facilities: Jefferson Island Storage & Hub near the Henry Hub in Louisiana and Golden
Triangle Storage in Texas. For more information, visit www.aglresources.com.
About Nicor Inc.
Nicor Inc. (NYSE:GAS) is a holding company and is a member of the Standard & Poors 500 Index. Its
primary business is Nicor Gas, one of the nations largest natural gas distribution companies.
Nicor owns Tropical Shipping, a containerized shipping business serving the Caribbean region and
the Bahamas. In addition, the company owns and/or has an equity interest in several energy-related
businesses. For more information, visit the Nicor website at www.nicor.com.
Forward Looking Statements
To the extent any statements made in this document contain information that is not historical,
these statements are forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended
(collectively, forward-looking statements).
These forward-looking statements relate to, among other things, the expected benefits of the
proposed merger such as efficiencies, cost savings, tax benefits, enhanced revenues and cash flow,
growth potential, market profile and financial strength; the competitive ability and position of
the combined company; and the expected timing of the completion of the transaction. Forward-looking
statements can generally be identified by the use of words such as believe, anticipate,
expect, estimate, intend, continue, plan, project, will, may, should, could,
would, target, potential and other similar expressions. In addition, any statements that
refer to expectations, projections or other characterizations of future events or circumstances are
forward-looking statements. Although certain of these statements set out herein are indicated
above, all of the statements in this release that contain forward-looking statements are qualified
by these cautionary statements. Although AGL Resources and Nicor believe that the expectations
reflected in such forward-looking statements are reasonable, such statements involve risks and
uncertainties, and undue reliance should not be placed on such statements. Certain material factors
or assumptions are applied in making forward-looking statements, including, but not limited to,
factors and assumptions regarding the items outlined above. Actual results may differ materially
from those expressed or implied in such statements. Important factors that could cause actual
results to differ materially from these expectations include, among other things, the following:
the failure to receive, on a timely basis or otherwise, the required approvals by AGL Resources and
Nicor stockholders and government or regulatory agencies (including the terms of such approvals);
the risk that a condition to closing of the merger may not be satisfied; the possibility that the
anticipated benefits and synergies from the proposed merger cannot be fully realized or may take
longer to realize than expected; the possibility that costs or difficulties related to the
integration of AGL Resources and Nicor operations will be greater than expected; the ability of the
combined company to retain and hire key personnel and maintain relationships with customers,
suppliers or other business partners; the impact of legislative, regulatory, competitive and
technological changes; the risk that the credit ratings of the combined company may be different
from what the companies expect; and other risk factors relating to the energy industry, as detailed
from time to time in each of AGL Resources and Nicors reports filed with the Securities and
Exchange Commission (SEC). There can be no assurance that the proposed merger will in fact be
consummated.
Additional information about these factors and about the material factors or assumptions underlying
such forward-looking statements may be found in the body of this release, as well as under Item
1.A. in each of AGL Resources and Nicors Annual Report on Form 10-K for the fiscal year December
31, 2009, and Item 1.A in each of AGL Resources and Nicors most recent Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2010. AGL Resources and Nicor caution that the
foregoing list of important factors that may affect future results is not exhaustive. When relying
on forward-looking statements to make decisions with respect to AGL Resources and Nicor, investors
and others should carefully consider the foregoing factors and other uncertainties and potential
events. All subsequent written and oral forward-looking statements concerning the proposed
transaction or other matters attributable to AGL Resources and Nicor or any other person acting on
their behalf are expressly qualified in their entirety by the cautionary statements referenced
above. The forward-looking statements contained herein speak only as of the date of this
presentation. Neither AGL Resources nor Nicor undertakes any obligation to update or revise any
forward-looking statement, except as may be required by law.
Additional Information
In connection with the proposed merger, AGL Resources plans to file with the SEC a Registration
Statement on Form S-4 that will include a joint proxy statement of AGL Resources and Nicor that
also constitutes a prospectus of AGL Resources. AGL Resources and Nicor will mail the joint proxy
statement/prospectus to their respective stockholders. INVESTORS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. You
will be able to obtain the joint proxy statement/prospectus, as well as other filings containing
information about AGL Resources and Nicor, free of charge, at the website maintained by the SEC at
www.sec.gov. You may also obtain these documents, free of charge, from AGL Resources website
(www.aglresources.com) under the tab Investor Relations/SEC Filings or by directing a request to
AGL Resources, P.O. Box 4569, Atlanta, GA, 30302-4569. You may also obtain these documents, free of
charge, from Nicors website (www.nicor.com) under the tab Investor Information/SEC Filings or by
directing a request to Nicor, P.O. Box 3014, Naperville, IL 60566-7014.
The respective directors and executive officers of AGL Resources and Nicor, and other persons, may
be deemed to be participants in the solicitation of proxies in respect of the proposed transaction.
Information regarding AGL Resources directors and executive officers is available in its
definitive proxy statement filed with the SEC by AGL Resources on March 15, 2010, and information
regarding Nicor directors and executive officers is available in its definitive proxy statement
filed with the SEC by Nicor on March 10, 2010. These documents can be obtained free of charge from
the sources indicated above. Other information regarding the interests of the participants in the
proxy solicitation will be included in the joint proxy statement/prospectus and other relevant
materials to be filed with the SEC when they become available. This communication shall not
constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer
to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting the requirements of Section 10 of
the Securities Act of 1933, as amended.
AGL Resources Contacts:
|
Nicor Contacts: | |
Investor:
|
Investor: | |
Sarah Stashak
|
Kary Brunner | |
404-584-4577
|
630-388-2529 | |
Media:
|
Media: | |
Tami Gerke
|
Annette Martinez | |
404-584-3873
|
630-388-2781 |