UGI Corporation (NYSE: UGI) announced today its intention to
offer, subject to market and other conditions, 2,000,000 equity
units (the “units”) in a public offering registered under the
Securities Act of 1933, as amended. UGI also expects to grant the
underwriters of the units a 30-day option to purchase up to an
additional 200,000 units solely to cover over-allotments. UGI
intends to use the net proceeds from the offering to pay a portion
of the purchase price of its previously announced pending
acquisition of Mountaineer Gas Company, and related fees and
expenses, and for general corporate purposes.
Each unit will have a stated amount of $100 and will initially
consist of a stock purchase contract and a 1/10th, or 10%,
undivided interest in one share of a new series of preferred stock
of UGI titled its series A cumulative perpetual convertible
preferred stock (the “convertible preferred stock”), without par
value and having a liquidation preference of $1,000 per share. Each
purchase contract will obligate the holder to pay $100 to UGI to
purchase a variable number of shares of UGI’s common stock on the
purchase contract settlement date, which is scheduled to occur on
June 1, 2024. However, holders of the purchase contracts may elect
to settle their purchase contracts early in certain circumstances.
The number of shares of UGI common stock to be issued upon
settlement of the purchase contracts will be determined over a span
of 20 consecutive trading days preceding the settlement date,
subject to a maximum settlement rate.
UGI expects to pay quarterly contract adjustment payments on the
stated amount of the units and cumulative dividends, when, as and
if declared by UGI’s board of directors, on the liquidation
preference of the convertible preferred stock. UGI may elect to pay
contract adjustment payments and dividends in cash, shares of its
common stock or a combination of cash and shares of common stock,
at UGI’s election, subject to certain limitations. UGI will also
have the right to defer contract adjustment payments on the
units.
The convertible preferred stock has no stated maturity or
required redemption date, but UGI will have the right to redeem all
or any portion of the convertible preferred stock at any time, and
from time to time, on or after September 3, 2024 (or such later
date as may be established in connection with a successful
remarketing of the convertible preferred stock, as described below)
for cash at a redemption price equal to the liquidation preference
of the convertible preferred stock being redeemed plus any
accumulated and unpaid dividends. Each share of convertible
preferred stock may be converted at the option of the holders only
after it is separated from the units and, prior to June 1, 2024,
only if certain fundamental change events occur before a successful
remarketing of the convertible preferred stock. UGI will settle
conversions by paying or delivering (i) one share of UGI’s series B
preferred stock (or, for conversions in connection with a
redemption of the convertible preferred stock, up to $1,000 in
cash) per share of convertible preferred stock being converted; and
(ii) to the extent the conversion value exceeds the liquidation
preference of the convertible preferred stock, shares of UGI’s
common stock. The series B preferred stock will have terms that are
substantially identical to the convertible preferred stock,
including having the same dividend rate and redemption provisions,
except that series B preferred stock will not be convertible.
The convertible preferred stock is expected to be remarketed
during either an optional remarketing period beginning on, and
including, March 1, 2024 and ending on, and including, May 13, 2024
or a final remarketing period beginning on, and including, May 23,
2024 and ending on, and including, May 30, 2024. Upon a successful
remarketing, the conversion rate and dividend rate of the
convertible preferred stock may be increased, and the earliest
redemption date for the convertible preferred stock may be changed
to a later date that is on or before August 29, 2025.
The maximum settlement rate and contract adjustment rate of the
purchase contracts, the initial conversion rate of the convertible
preferred stock and the initial dividend rate of the convertible
preferred stock and the series B preferred stock will be determined
at the pricing of the offering.
Wells Fargo Securities, BofA Securities, Credit Suisse, Goldman
Sachs & Co. LLC and J.P. Morgan are acting as active
bookrunners for the offering.
The offering is being made pursuant to an effective shelf
registration statement on file with the Securities and Exchange
Commission (the “SEC”). The offering will be made only by means of
a prospectus supplement and an accompanying prospectus. An
electronic copy of the preliminary prospectus supplement, together
with the accompanying prospectus, is available on the SEC’s website
at www.sec.gov. Alternatively, copies of the preliminary prospectus
supplement, together with the accompanying prospectus, can be
obtained by contacting: Wells Fargo Securities, Attention: Equity
Syndicate Department, 500 West 33rd Street, New York, New York,
10001, at (800) 326-5897 or email a request to
cmclientsupport@wellsfargo.com; BofA Securities, by mail at
NC1-004-03-43, 200 North College Street, 3rd Floor, Charlotte,
North Carolina 28255-0001, Attention: Prospectus Department, or by
email at dg.prospectus_requests@bofa.com; Credit Suisse Securities,
by mail, Attention: Credit Suisse Prospectus Department, One
Madison Avenue, New York, New York, 10010, by telephone at (800)
221-1037, or by email at newyork.prospectus@credit-suisse.com;
Goldman Sachs & Co. LLC, by mail at Goldman Sachs & Co.
LLC, 200 West Street, New York, New York 10282, Attention:
Prospectus Department, by telephone at (866) 471-2526 or (212)
902-1171, by facsimile at (212) 902-9316 or by email at
prospectus-ny@ny.email.gs.com; or J.P. Morgan, by mail, Attention:
c/o Broadridge Financial Solutions, 1155 Long Island Avenue,
Edgewood, New York 11717, or by telephone at (866) 803-9204.
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities referred to in this
press release, nor will there be any sale of any such securities,
in any state or other jurisdiction in which such offer, sale or
solicitation would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction.
About UGI Corporation
UGI Corporation is a distributor and marketer of energy products
and services. Through subsidiaries, UGI operates natural gas and
electric utilities in Pennsylvania, distributes LPG both
domestically (through AmeriGas) and internationally (through UGI
International), manages midstream energy assets in Pennsylvania,
Ohio, and West Virginia and electric generation assets in
Pennsylvania, and engages in energy marketing, including renewable
natural gas, in 12 states and the District of Columbia and
internationally in France, Belgium, the Netherlands and the United
Kingdom.
Forward-Looking Statements
This press release includes forward-looking statements,
including statements regarding the anticipated terms of the units
being offered, the completion, timing and size of the proposed
offering, the intended use of the proceeds and the completion of
the pending acquisition of Mountaineer Gas Company. Forward-looking
statements represent UGI’s current expectations regarding future
events and are subject to known and unknown risks and uncertainties
that could cause actual results to differ materially from those
implied by the forward-looking statements. Among those risks and
uncertainties are market conditions, including market interest
rates, the trading price and volatility of UGI’s common stock and
risks relating to UGI’s business, including those described in
periodic reports that UGI files from time to time with the SEC. UGI
may not consummate the proposed offering described in this press
release and, if the proposed offering is consummated, cannot
provide any assurances regarding the final terms of the offering or
the units or its ability to effectively apply the net proceeds or
complete its pending acquisition of Mountaineer Gas Company as
described above. The forward-looking statements included in this
press release speak only as of the date of this press release, and
UGI does not undertake to update the statements included in this
press release for subsequent developments, except as may be
required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20210517005481/en/
Investor Relations Tameka Morris, 610-456-6297 Arnab
Mukherjee, 610-768-7498 Shelly Oates, 610-992-3202
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