Dominion Energy to Buy Rest of Dominion Energy Midstream Partners

(Reuters) – Dominion Energy said Wednesday it offered to buy the rest of Dominion Energy Midstream Partners in an all-stock deal, valuing the company at about $2.2 billion.

Dominion Energy, which owns a stake of 15% in the company, offered 0.2468 of its shares per Dominion Energy Midstream common unit, valuing each unit at $17.75 based on closing prices as of Sept. 18, the company said.


Pipeline companies are reorganizing their business structure after the U.S. Federal Energy Regulatory Commission in March stopped them from claiming an income tax allowance as part of the fees they charge shippers.

"Continued weakness in MLP capital markets combined with the prolonged disruption in Dominion Energy Midstream's common unit price since the March 15 Federal Energy Regulatory Commission policy revision were key factors that led to this decision," Dominion Energy Chief Executive Officer Thomas Farrell said.

The offer represented a discount of nearly 2% to Dominion Energy Midstream’s Wednesday close of $18.05 but was at a premium of 8.2% based on the 30-day volume-weighted average unit price.

Shares of Dominion Energy Midstream were down 3.3% at $17.45 in extended trading, while those of Dominion Energy were largely unchanged.

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