The Successful Investor Hotline – Thursday, April 1, 2016

Article Excerpt

TRANSCANADA CORP., $49.59, Toronto symbol TRP, recently agreed to buy Texas-based Columbia Pipeline Group (New York symbol GPCX) for $13 billion U.S. That’s equal to 48% of its market cap of $35.1 billion (Canadian). Columbia operates natural gas pipelines in the U.S. Northeast, Midwest, Mid-Atlantic and Gulf Coast regions, as well as underground gas storage terminals. To help pay for this acquisition, TransCanada has sold 96.6 million subscription receipts at $45.75 a share for total proceeds of $4.4 billion. Each receipt will convert to one common share when TransCanada completes the Columbia acquisition, probably by the end of 2016. If it fails to complete the acquisition, the funds will be returned to the subscribers. In the meantime, the holders of these receipts will receive the same dividends as holders of the company’s common shares. To pay for Columbia, TransCanada also plans to sell some of its electrical power plants in the U.S. northeast. These include the Ironwood natural gas power plant in Pennsylvania,…