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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): May 8, 2000
AGL RESOURCES INC.
(Exact Name of Registrant as Specified in Charter)
Georgia 1-14174 58-2210952
(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
817 West Peachtree Street, NW, 10th Floor, Atlanta, Georgia 30308
(Address of Principal Executive Offices) (Zip Code)
(404) 584-9470
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events
See the press release attached hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits.
Exhibit
Number Description
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99.1 Press Release, dated May 8, 2000
2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AGL RESOURCES INC.
(Registrant)
/s/ Donald P. Weinstein
--------------------------------
Donald P. Weinstein
Senior Vice President and
Chief Financial Officer
Date: May 8, 2000
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release, dated May 8, 2000
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EXHIBIT 99.1
[AGL Logo]
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contacts:
AGL RESOURCES
Financial Community Media
Melanie M. Platt Nick Gold
Vice President Investor Relations Manager, Media Relations
and Corporate Secretary (404) 584-3457
(404) 584-3420 1-800-291-9649 (pager)
Joseph P. Heffron
Manager, Investor Relations
(404) 584-3427
DOMINION RESOURCES
Financial Community Media
Suzette Mata Hunter Applewhite
(804) 819-2154 (804) 819-2043
AGL RESOURCES TO ACQUIRE VIRGINIA NATURAL GAS
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ATLANTA, GEORGIA, May 8, 2000 -- AGL Resources Inc. (NYSE:ATG) today
announced that it has signed a definitive agreement to acquire Virginia Natural
Gas (VNG), a wholly owned subsidiary of Dominion Resources (NYSE:D), for $500
million in cash. The purchase price includes $22 million in working capital.
The pending acquisition would boost AGL's base of customers to nearly 1.8
million, making it the second largest natural gas-only distributor in the U.S.
and establishing its presence in one of the fastest growing gas markets in the
U.S.
Under the agreement, AGL Resources would acquire all of the outstanding
stock of VNG. At the option of the seller, the parties may elect to treat the
transaction as a sale of assets for tax purposes, commonly referred to as a
Section 338(h)(10) election, in which case the purchase price shall be increased
to $550 million to reflect the increased value of the transaction to AGL
Resources.
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Upon completion of the transaction, expected by December 31 of this year,
VNG will become a wholly owned subsidiary of AGL Resources. The transaction
will be accounted for as a purchase and will be accretive to AGL Resources'
earnings no later than 12 months after the close.
Walter M. Higgins, chairman and chief executive officer of AGL Resources,
said the transaction is timely in light of AGL's success in improving operations
and earnings in the midst of a rapidly deregulating natural gas market.
"This acquisition is all about growth and competition. Our focus this past
year on achieving excellence in our operations is paying off for customers and
shareholders," said Higgins. "Our year-to-date results have exceeded analyst
expectations and we have gained valuable experience in operating efficiently and
profitably in a deregulated environment. These strengths, when combined with
the best practices of VNG, will allow us to grow profitably in both our utility
and gas marketing businesses and create new value for shareholders as our
industry continues to reshape itself for competition."
Virginia Natural Gas, headquartered in Norfolk, Virginia, serves
approximately 230,000 natural gas customers in the Hampton Roads region of
southeastern Virginia. Customer growth at VNG has averaged 4% in recent years
- -- three times the national average and ranking VNG growth among the top 10% of
fastest growing local distribution companies, according to a survey by the
American Gas Association.
The Virginia State Corporation Commission (VSCC) and the Federal Trade
Commission earlier this year had required Dominion Resources to divest its
ownership of VNG as part of Dominion's planned merger with Consolidated Natural
Gas Company. Virginia is transitioning to competition in gas and electric
services, including some pilot programs for deregulated natural gas services,
and Higgins said AGL Resources would actively support the VSCC's efforts.
The transaction is conditioned, among other things, upon approvals of
various regulatory agencies, including the VSCC. In addition, AGL Resources
intends to register as a holding company with the Securities and Exchange
Commission under the Public Utility Holding Company Act (PUHCA) of 1935.
AGL Resources intends initially to finance the acquisition through a
combination of existing credit facilities and additional bank commitments. A
long-term financing plan will be decided closer to closing, based upon an
assessment of market conditions, to balance the earnings-per-share accretion and
maintain the company's outstanding credit quality. The transaction will not
affect AGL Resources' previously announced share repurchase program. AGL
Resources has repurchased three million of a total of 3.6 million shares
currently authorized for repurchase. As of March 31, 2000, AGL Resources had
approximately 54 million shares outstanding.
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Morgan Stanley Dean Witter acted as financial advisor to AGL Resources.
Long Aldridge & Norman LLP and LeBoeuf, Lamb, Greene & MacRae, L.L.P. acted as
legal counsel to AGL Resources.
AGL Resources Inc. is a regional energy holding company with operations in
the Southeast. Atlanta Gas Light Company, the largest natural gas distributor in
the Southeast and the company's primary subsidiary, provides delivery service to
more than 1.5 million customers in Georgia and full natural gas service in the
Chattanooga area of Tennessee. Although natural gas distribution is AGL
Resources' core business, it also is engaged in other energy-related businesses,
including retail energy marketing, customer care services for energy marketers,
and wholesale and retail propane sales. For more information, visit our website
at www.aglresources.com.
Dominion Resources, Inc., is a diversified utility holding company that
owns and operates businesses involved in utility services, natural gas
production, pipeline and distribution services, energy marketing and power
project development.
This press release contains forward-looking statements. AGL Resources
wishes to caution readers that the assumptions, which form the basis for the
forward-looking statements, include many factors that are beyond AGL Resources'
ability to control or estimate precisely. Those factors include, but are not
limited to, the following: changes in estimated transaction and transition
costs; changes in the price and demand for natural gas; the impact of changes in
state and federal legislation and regulation on the company and the natural gas
industry; the effects of competition, particularly in markets where prices and
providers historically have been regulated; financial market conditions; and
other risks described in our documents on file with the Securities and Exchange
Commission.
