• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Southern Union Will Pay Cash As Dividend: The 40-Cent Payment Will Be Greater Than the Usual Southern Union Co. Stock Dividend.

Posted on: Wednesday, 28 December 2005, 12:00 CST

By Jerry Lynott, Wilkes-Barre, Pa., Times Leader, Wilkes-Barre, Pa., Times Leader

Dec. 28--SCRANTON -- Southern Union Co. will replace its 12-year-old stock dividend program with a cash payout beginning next year, its president said Tuesday.

The 40-cent annual dividend to be paid shareholders at the end of the first quarter in 2006 is 8 cents higher than the payment George Lindemann, president and chief executive officer of the natural gas distribution and storage utility, planned to recommend last month to the board of directors.

"The move to a cash dividend is evidence of the board's confidence in the growth and sustainability of the company's future earnings and cash flows," Lindemann said in a prepared statement Tuesday.

The natural gas distribution, storage and transportation company has traditionally paid shareholders an annual 5 percent stock dividend.

The cash dividend amounts to 1.7 percent of Southern Union's closing share price Tuesday of $23.33.

The company's stock traded at a 52-week high of $26.29 on Oct. 3. Conversely, it reached its 52-week low of $20.77 on Jan. 13. With 111,422,000 shares outstanding, the dividend would pay out $44.56 million.

The change to cash is the latest in a series of recent announcements Lindemann has made, starting with the resignation of president and chief operating officer Thomas Karam on Nov. 8.

Nearly two weeks ago, Lindemann held a conference call on the company's $1.6 billion purchase of Sid Richardson Energy Services Co. of Fort Worth, Texas.

The acquisition would connect Richardson's natural gas gathering and processing operations with Southern Union's Transwestern pipeline in eastern New Mexico and western Texas.

During the Dec. 16 conference call, Julie Edwards, Southern Union's chief financial officer, said the deal would be a "tremendous generator of free cash" next year.

The addition of Richardson's assets will expand Southern Union's pipeline to more than 22,000 miles. The network extends from the Gulf of Mexico through the Midwest and into Canada.

Southern Union also operates PG Energy and other local distribution companies Missouri Gas Energy and New England Gas Co.

Coinciding with the dividend announcement, Southern Union named Allan D. Scherer to its board of directors. He is a private investor in real estate, oil and gas, according to the company.

Jerry Lynott, a Times Leader staff writer, may be reached at 829-7237.

-----

Copyright (c) 2005, Wilkes-Barre, Pa., Times Leader

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

NYSE:SUG, Unknown:THL, Unknown:NEG,

Source: The Times Leader (Wilkes-Barre, Pa.)

More News in this Category