* ONEOK’s (NYSE: OKE) board unanimously authorized management to pursue a plan to separate the company’s natural gas distribution business into a standalone publicly traded company, resulting in two independent, highly focused energy companies.
Under the plan, ONEOK shareholders would retain their current shares of ONEOK stock and receive a pro-rata dividend of shares of stock in the new company in a transaction that is expected to be tax-free to ONEOK and its shareholders. The actual number of ONE Gas shares that will be distributed to ONEOK shareholders will be determined prior to closing, which is expected during the first quarter 2014.
Upon completion of the transaction, ONEOK will continue to hold its interests in ONEOK Partners, L.P. (NYSE: OKS), which include the sole general partner interest and limited partner interests that together currently represent 43.3 percent.
ONEOK Partners is not affected by the proposed transaction.
The new public company, to be called ONE Gas, Inc., will consist of Oklahoma Natural Gas Company, Kansas Gas Service and Texas Gas Service, and will be headquartered in Tulsa, Okla.
ONE Gas will be one of the largest natural gas utilities in the United States, serving more than 2 million customers in three states, and will be the only publicly traded, 100 percent regulated, pure-play natural gas distribution utility in the United States. ONE Gas is expected to be well positioned for earnings growth and will be listed on the New York Stock Exchange (NYSE: OGS).
The transaction is expected to result in more tailored growth strategies, more efficient capital allocation, improved investor understanding and better shareholder alignment of the separate businesses, and is expected to lead to higher combined valuations of both companies.
* ALCO Stores, Inc. (Nasdaq: ALCS) and Argonne Capital Group LLC (“Argonne”), a private investment firm based in Atlanta, Georgia, announced that the companies have entered into a definitive merger agreement. Under the terms of the merger agreement, Argonne will acquire all of the outstanding shares of ALCO Stores’ common stock for $14.00 per share in cash. This price represents a premium of approximately 63 percent to ALCO’s share price on July 24, 2013, the last trading day prior to ALCO’s announcement of the transaction contemplated by the merger agreement. The cash price for ALCO shares in the proposed transaction totals approximately $47 million.
The independent members of ALCO Stores’ Board of Directors have unanimously approved the merger agreement and recommended that ALCO Stores’ shareholders approve the transaction.
The merger, which is expected to close later this year, is subject to approval from ALCO’s shareholders and other customary closing conditions. Under the terms of the merger agreement, the Company may solicit alternative proposals from third parties at least through August 23, 2013. The Company does not anticipate that it will disclose any developments with regard to this solicitation process unless and until the ALCO Board of Directors makes a decision with respect to any potential superior proposal. There is no assurance that this process will result in a superior proposal.
The transaction is being made through one of Argonne’s affiliates.
William Blair & Company, L.L.C. is serving as financial advisor to the Company, and Norton Rose Fulbright and Lathrop & Gage LLP are serving as legal advisors to the Company. Sagent Advisors, LLC is serving as financial advisor to Argonne, and King & Spalding LLP is serving as legal advisor to Argonne.
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