UPDATE 1-Enbridge shares surge on restructuring, dividend hike

Thu Dec 4, 2014 2:40pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Updates trading, adds record high, analyst quote)

By Julie Gordon

VANCOUVER Dec 4 (Reuters) - Shares of Enbridge Inc surged more than 12 percent to a record high on Thursday, a day after the company outlined plans to transfer ownership of its Canadian pipelines to an affiliate and boost its dividend by 33 percent.

Canada's largest pipeline operator said late Wednesday it will move C$17 billion ($15 billion) worth of assets to its subsidiary, Enbridge Income Fund.

The plan will allow Calgary-based Enbridge to accelerate dividend growth and improve funding costs for new projects, reinforcing its growth past 2018, Chief Executive Al Monaco said on a conference call on Thursday.

"The optimization should enhance our ability to compete for new organic and asset acquisition opportunities," he said.

Enbridge's decision will also trim its debt and help it maintain control of its assets.

Investors lauded the plan, sending shares up 19.6 percent Thursday to a record high of C$65.13 shortly after market opened on the Toronto Stock Exchange. The stock was up 12.6 percent at C$61.29 in afternoon trading.

"The company is trying to do what they can to unlock hidden value, and the Street is pretty pleased with that," said Colin Cieszynski, chief market strategist at CMC Markets. "It's another attempt to remove the conglomerate discount by streamlining its businesses."   Continued...