Q: Hi 5i! This is regarding Altagas (ALA); please correct me if I am mistaken in setting this out:
1. The prospect of the return of cost of the receipts in the event the WGL takeover collapses: Doesn't this really mean that receipt-holders would receive $31 minus the total of all dividend equivalent payments issued in respect of each receipt held (even if they were issued to someone else before you bought your receipts)? In that case, if the deal were to collapse after 15 monthly distributions, receipt holders would be due to receive $31 - $2.625 (i.e. minus 15 x $0.175) or net $28.375 per subscription receipt? In this situation, people holding the receipts from issue in taxable accounts would still be down the tax on the distributions, even after receiving 'reimbursement' for the cost of the receipts.
2. Do you know if ALA's management or board have given any indication of their intentions about the possibility of a dividend increase in 2017 or even any time before the closing date of the WGL transaction? Previously ALA had been raising annually. I have seen people writing as though dividend increases are off the table until Sept 2018 but I don't remember seeing an announcement from the company to that effect.
3. If Altagas' share price is down because "the market does not like the WGL transaction" or because "the market does not like uncertainty," wouldn't that suggest that if the deal falls through the share price would be likely to rise, particularly given any continuation of the recent strong quarterly report? I believe it was trading in the range of $33-35 shortly before the WGL deal was announced.
Thanks!
1. The prospect of the return of cost of the receipts in the event the WGL takeover collapses: Doesn't this really mean that receipt-holders would receive $31 minus the total of all dividend equivalent payments issued in respect of each receipt held (even if they were issued to someone else before you bought your receipts)? In that case, if the deal were to collapse after 15 monthly distributions, receipt holders would be due to receive $31 - $2.625 (i.e. minus 15 x $0.175) or net $28.375 per subscription receipt? In this situation, people holding the receipts from issue in taxable accounts would still be down the tax on the distributions, even after receiving 'reimbursement' for the cost of the receipts.
2. Do you know if ALA's management or board have given any indication of their intentions about the possibility of a dividend increase in 2017 or even any time before the closing date of the WGL transaction? Previously ALA had been raising annually. I have seen people writing as though dividend increases are off the table until Sept 2018 but I don't remember seeing an announcement from the company to that effect.
3. If Altagas' share price is down because "the market does not like the WGL transaction" or because "the market does not like uncertainty," wouldn't that suggest that if the deal falls through the share price would be likely to rise, particularly given any continuation of the recent strong quarterly report? I believe it was trading in the range of $33-35 shortly before the WGL deal was announced.
Thanks!
