Shares of AGL Resources were a massive gainer in trade today. The stock for the company ended the trading session higher by close to 29 percent on the back of 14 times the average daily volumes which is being seen as a huge positive for the stock. The surge on the back of the strong volumes is a clear indicator that the momentum has clearly shifted to the buy side. And on a day when the Dow Jones Industrial Average collapsed by close to 600 points, the outperformance in the stock was seen as a huge positive by traders and investors on the street. It was reported today that Southern Co is acquiring AGL Resources for approximately $7.93 billion which would create the second largest utility company in the US by customer base.
The combined business will include 11 regulated electric and natural gas distribution companies serving close to 9 million customers in nine states. It was also reported that customers would be continued to be served by their current gas companies. Southern Co. would pay $66 in cash for AGL Resources which is a 38 percent premium to the company’s Friday closing price and is being seen as a huge positive by the analysts on the street. Southern and AGL put the deal’s enterprise value at about $12 billion. Southern said that the deal would add to its earnings per share in the first full year after the closure of the deal. It was reported that the board of directors of both companies had approved the deal which is targeted to close in the second half of 2016.
Shares of AGL hit a fresh 52 week high during the trading session today and many traders believe the stock could go higher in the near term which is a bullish sign.