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Enbridge launches $2.75 billion share sale option

EditorAhmed Abdulazez Abdulkadir
Published 2024-05-16, 07:52 a/m

CALGARY, AB - Enbridge Inc (TSX:ENB). (TSX: NYSE:ENB) (NYSE: ENB) has announced the initiation of an at-the-market equity issuance program (ATM Option) to potentially raise up to $2.75 billion. This move is intended to provide funding flexibility in relation to the company's ongoing acquisitions of three U.S. natural gas utilities from Dominion Energy (NYSE:D), Inc.

The ATM Option enables the company to issue and sell common shares from treasury at prevailing market prices through the Toronto Stock Exchange, the New York Stock Exchange, or any other marketplace in Canada or the United States where the shares may be traded. The sales may occur from time to time, and the prices may vary among purchasers during the distribution period.

Enbridge has a range of funding alternatives for the acquisitions, including the issuance of senior unsecured notes, junior subordinated (hybrid) debt, and its capital recycling program. The equity distribution agreement, dated Wednesday, May 15, 2024, has been established with a syndicate of sales agents, led by BMO (TSX:BMO) Nesbitt Burns Inc. and BMO Capital Markets Corp., among others.

The ATM Option is subject to regulatory documents, including a Canadian prospectus supplement and a U.S. prospectus supplement, which provide detailed information about Enbridge and the offering. These supplements are dated May 15, 2024, and follow the company's Canadian short form base shelf prospectus and U.S. base prospectus filed with the U.S. Securities and Exchange Commission.

InvestingPro Insights

Enbridge Inc. (NYSE: ENB) has recently unveiled its at-the-market equity issuance program, underscoring its proactive approach to capital management. In light of this development, it's valuable to consider some key financial metrics and insights that can offer investors a deeper understanding of the company's current standing and future prospects.

InvestingPro Data shows that Enbridge has a market capitalization of $78.67 billion, reflecting its significant presence in the market. The company's P/E ratio stands at 19.46, while the adjusted P/E ratio for the last twelve months as of Q1 2024 is slightly lower at 18.39. This suggests a potentially attractive valuation relative to near-term earnings growth. Moreover, Enbridge boasts a high gross profit margin of 52.75% for the same period, indicating strong profitability in its operations.

Two InvestingPro Tips that are particularly relevant to the company's strategic moves include:

1. Enbridge has demonstrated a strong commitment to its shareholders by raising its dividend for 21 consecutive years, and even more impressively, maintaining dividend payments for 52 consecutive years. This track record is a testament to its financial stability and dedication to returning value to its investors.

2. Despite a challenging environment characterized by revenue decline in the last twelve months as of Q1 2024, Enbridge remains a prominent player in the Oil, Gas & Consumable Fuels industry. The company's stock generally trades with low price volatility, which might appeal to investors seeking stable investment opportunities in the energy sector.

For those interested in exploring further insights and tips, there are additional InvestingPro Tips available on the platform. Enbridge currently has a total of 11 tips listed on InvestingPro, which can be accessed at https://www.investing.com/pro/ENB. To deepen your investment research, use coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, granting access to comprehensive analysis and data to inform your investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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