(Bloomberg) — Enbridge Inc., the Canadian pipeline giant, agreed to acquire a smaller U.S. rival to add export capacity on the Gulf Coast.
The company is buying Moda Midstream Operating LLC for $3 billion in cash from EnCap Flatrock Midstream, Enbridge said Tuesday in a statement. Enbridge’s stock price rose as much as 50 cents to C$50.62 in Toronto, the highest since March 2020, before erasing gains.
The deal marks a shift in focus toward the U.S. market for Enbridge as it wraps up construction of the Line 3 oil sands export line after years of regulatory and legal battles to build the project. The company, which already handles about a quarter of all crude produced in North America, is betting on a strong outlook for exports of oil pumped from the Permian and Eagle Ford shale basins in Texas.
The fracking revolution has not only revived U.S. oil production over the past decade, it has turned the country into one of the largest shippers of the commodity. The deal includes Ingleside Energy Center, near Corpus Christi, Texas. Built in 2018, it’s North America’s largest crude export terminal, which loaded 25% of all U.S. Gulf Coast crude exports last year.
“Our strategy is driven by the important role that low cost, sustainable North America energy supply will play in meeting growing global demand,” Enbridge Chief Executive Officer Al Monaco said in the statement.
Enbridge will also acquire a 20% stake the Cactus II Pipeline, which connects the Permian with the Gulf Coast, plus the Viola pipeline and the Taft Terminal.
Enbridge seeks to increase its dividend and cash flow, and the Moda Midstream acquisition is a quick way to advance that strategy at a low price, Matthew Taylor, an analyst at Tudor Pickering & Holt, said by phone. Still, some investors would have wanted the company to pay down debt or invest in core assets instead, he said.
“I think the spreadsheet math makes a lot of sense but it’s not what investors were looking for at this time,” he said. Shareholders “want to see growth and returns but in a way that reduces emissions intensity and attracts new investors.”
Enbridge said the acquisition will be initially funded with current liquidity, and that the deal — which is expected to close in the fourth quarter — will immediately add to earnings.
Barclays Plc is Enbridge’s financial adviser on the deal. Sidley Austin LLP is the company’s legal counsel in its purchase agreement with Encap Flatrock Midstream to acquire Moda Midstream.
(Adds analyst comment in sixth, seventh paragraphs)
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TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.
The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3 per cent.
On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.
The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.
Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.
Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.
On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.
The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
TORONTO – Thomson Reuters reported its third-quarter profit fell compared with a year ago as its revenue rose eight per cent.
The company, which keeps its books in U.S. dollars, says it earned US$301 million or 67 cents US per diluted share for the quarter ended Sept. 30. The result compared with a profit of US$367 million or 80 cents US per diluted share in the same quarter a year earlier.
Revenue for the quarter totalled US$1.72 billion, up from US$1.59 billion a year earlier.
In its outlook, Thomson Reuters says it now expects organic revenue growth of 7.0 per cent for its full year, up from earlier expectations for growth of 6.5 per cent.
On an adjusted basis, Thomson Reuters says it earned 80 cents US per share in its latest quarter, down from an adjusted profit of 82 cents US per share in the same quarter last year.
The average analyst estimate had been for a profit of 76 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
