Gabelli’s GAMCO Pushes Spinoff Of National Fuel Gas’ Utility Unit

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Gabelli’s GAMCO Pushes Spinoff Of National Fuel Gas’ Utility Unit
Photo of Mario Gabelli via Insider Monkey (CC BY-ND 2.0)

GAMCO Investors, Inc., an investment management firm headed by Mario Gabelli is pushing for the spinoff of the utility segment of National Fuel Gas Co. (NYSE:NFG).

GAMCO urges inclusion of its proposal in NFG’s proxy statement

In an amended 13D filing with the Securities and Exchange Commission (SEC), GAMCO urged National Fuel Gas Co. (NYSE:NFG) to include its proposal its proxy statement for the 2015 annual meeting of shareholders.

GAMCO emphasized that it proposing a resolution urging its fellow shareholders to vote to request that the board of directors and management of National Fuel Gas Co. (NYSE:NFG) to “act expeditiously, consistent with tax considerations, to engage an investment banking firm to a effectuate a spinoff” of its utility segment into a separate publicly traded C-corporation.

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Spinoff could help boost NFG’s underlying value

In a statement, GAMCO believed that a spinoff of the local distribution utility segment of National Fuel Gas Co. (NYSE:NFG) into a separate publicly traded company would help boost its underlying value.

In addition, the investment management firm said the business can participate in the consolidation activities that are happening in the utility space as a stand-alone publicly traded C-corporation.

Furthermore, GAMCO pointed out that the pipeline & storage, gathering, exploration & production as well as the energy marketing operations of National Fuel Gas Co. (NYSE:NFG) as standalone publicly traded company will be embraced by investors more easily. The investment management firm also believed that it will “provide greater flexibility should the company pursue alternative capital structure.”

Gabelli previously stated that although the three main businesses of National Fuel Gas Co. (NYSE:NFG) are deeply rooted in the natural gas industry, each has unique characteristics that are attractive to different types of investors.

During a conference call in May, Ronald Tanki, CEO of National Fuel Gas Co. (NYSE:NFG) emphasized, “One of the main drivers of those efficiencies is our integrated model. I firmly believe our integrated model has added value for both shareholders and ratepayers.”

GAMCO is one of the largest investors of National Fuel Gas Co. (NYSE:NFG). It owns 3.75 million shares of 4.46% stake of the outstanding common stock of the company.

The shares of National Fuel Gas Co. (NYSE:NFG) closed at $73.55 per share, down by 0.05% on Monday. Year-to-date, the stock gained more than 4%.

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