Utility MDU Resources drops on $200 mln equity offering

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