Utility MDU Resources drops on $200 mln equity offering

Mdu Resources

04/12/2025 13:01

** Electric utility and natgas provider MDU Resources' MDU.N shares down 3.3% at $19.57 premarket after $200 mln follow-on priced with forward sale component

** Bismarck, North Dakota-based MDU early Thurs announced ~10.2 mln shares at $19.70, a 2.7% discount to last close

** Co entered into 2-year forward sale agreements with bookrunners Wells Fargo, BofA and JP Morgan

** Upon settlement of such agreements, it expects to use net proceeds for general purposes, including debt repayment and acquisitions, among other purposes

** MDU has ~204.4 mln shares outstanding as of Nov 25, per the offering prospectus, for ~$4.1 bln market cap

** A forward sale structure allows MDU to lock in current stock price and delays new share issuance and garnering proceeds until the utility needs the funds, thus avoiding immediate dilution

** Through Weds close, MDU shares up 25% over the past three months, putting them up 12% in 2025

** 3 analysts rate shares "strong buy" and 2 rate "hold"; their median PT is $21, per LSEG data

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))