Tallgrass Energy’s stock soars on very heavy volume after buyout deal for 23% premium

Shares of Tallgrass Energy L.P. soared 21% in very active premarket trading Tuesday, after the energy infrastructure company announced a deal to be acquired by affiliates of Blackstone Infrastructure Parners and of Enagas, GIC, NPS and USS. The acquirers will pay $22.45 for each Class A Tallgrass share outstanding. With 179.2 million Class A shares outstanding as of Oct. 30, that would value the deal at about $4.02 billion. The buyout price represents a 22.7% premium to Monday’s stock closing price of $18.29. Trading volume jumped to over 33 million shares, enough to make the stock the most actively traded on major U.S. exchanges, and compared with the full-day average of 1.7 million shares. The deal is expected to close in the second quarter of 2020. The acquirers expect to fund the deal with about $3 billion in equity and debt. Tallgrass’s shares have lost 9% year to date, while the SPDR Energy Select Sector ETF has gained 7% and the S&P 500 has climbed 28%.

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