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GAMCO Investors Proposes Spin-Off of National Fuel Gas Co.’s (NFG) Utility Segment

In a newly amended filing with the U.S. Securities and Exchange Commission, GAMCO Investors, managed by Mario Gabelli, has disclosed a stockholders proposal it sent to National Fuel Gas Co. (NYSE:NFG). According to the filing, GAMCO requested the company to include the proposal in its proxy statement for the 2015 annual meeting of stockholders.

Mario Gabelli

In its proposal, GAMCO urged the stockholders to vote to request that the board of directors and management of National Fuel Gas Co. (NYSE:NFG) act expeditiously, consistent with effective tax considerations, to engage an investment banking firm to effectuate a spin-off of the company’s utility segment, which represents the operations of National Fuel Distribution Corporation, into a separate publicly traded C-corporation.

GAMCO, in a supporting statement, notes “we believe that a spin-off of NFG’s local distribution utility segment into a separately traded public company, thus creating two C-corporations, would help enhance the underlying value of the company.”

Further, GAMCO states that National Fuel Gas Co. (NYSE:NFG)’s utility business, as a stand-alone publicly traded C-corporation, can participate in the consolidation activities occurring in the utility space.

“As a stand-alone publicly traded C-corporation, NFG’s pipeline & storage/gathering/exploration & production/energy marketing operations will more easily be embraced by investors as well as provide greater flexibility should the company purse alternative capital structure,” the fund adds.

GAMCO holds 3.75 million shares of National Fuel Gas Co. (NYSE:NFG), equal to 4.46% of common stock shares outstanding. Previously, the fund reported owing 3.69 million shares of the company.

National Fuel Gas Co. (NYSE:NFG) is a holding company, which is engaged in operating utility segment, pipeline and storage segment, exploration and production segment, energy marketing segment and gathering segment. The company has a market cap of $6.2 billion.

Aside from GAMCO, Private Capital Management, led by Gregg J. Powers, holds 151,999 shares of National Fuel Gas Co. (NYSE:NFG). Another hedge fund, Citadel Investment Group, managed by Ken Griffin, owns 50,054 shares of the company.

Recently, GAMCO reported upping its stakes in Chemtura Corp (NYSE:CHMT) and The Pep Boys – Manny, Moe & Jack (NYSE:PBY). GAMCO reported holding 4.54 million Chemtura Corp (NYSE:CHMT) shares, which represent an increase from 4.33 million shares the fund held previously. The fund boosted its position in The Pep Boys – Manny, Moe & Jack (NYSE:PBY) to 6.16 million shares from 5.58 million shares reported previously. The stake is equivalent to 11.56% of common stock outstanding.

Disclosure: none

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