Duke Plans 1-for-3 Reverse Stock Split, Raises Dividend 2%
06/26/2012| 12:51pm US/Eastern
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By Ben Fox Rubin
Duke Energy Corp. (>> Duke Energy Corporation) said it plans to execute a 1-for-3 reverse stock split after its purchase of Progress Energy Inc. (PGN) closes.
The all-stock deal, announced in January 2011 and valued around $26 billion, will create the nation's largest utility.
Duke also raised its quarterly dividend by 2% to 25.5 cents from 25 cents. After the reverse stock split, the dividend should be 76.5 cents. The increase should cost the company an additional $6.7 million each quarter, and the dividend yield is about 1.1%.
The company reiterated its plans to close the acquisition this coming Sunday. On Monday, Duke and Progress said they have accepted federal regulators' conditions for completing their merger. The Federal Energy Regulatory Commission ruled earlier this month that the utility companies could combine their operations but only if they meet conditions designed to ensure that the merged company wouldn't exercise undue influence over the power markets in the Carolinas.
Duke and Progress also are working to secure approval from regulators in North Carolina and South Carolina by this weekend.
Duke serves 4 million customers in the Carolinas, Indiana, Ohio and Kentucky and has international operations in Brazil and elsewhere. Progress serves more than 3 million customers in the Carolinas and Florida. Both are based in North Carolina.
Last month, Duke posted lower first-quarter earnings as it took a $420 million charge at its Indiana coal gasification plant.
Duke's shares were flat at $22.93 Tuesday. The stock is up 4.3% so far this year.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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