KKR has made a roughly $9bn offer to acquire UGI, the Pennsylvania-based natural gas and electricity distributor, in a move that could give the private equity firm exposure to rising demand for reliable power from artificial intelligence data centres, according to a report by the Wall Street Journal.
The private equity firm has proposed paying $42.50 per share for UGI, according to people familiar with the matter. The offer represents a significant premium to UGI’s recent market price: the shares closed at $35.09 on Monday, valuing the company at about $7.5bn.
There is no indication yet that UGI will accept KKR’s approach, and the company could ultimately reject the offer or pursue another outcome, the people said.
UGI operates regulated natural gas and electric utilities as well as propane distribution business AmeriGas. Its operations also include natural gas pipelines and storage infrastructure, while the company distributes liquefied petroleum products in Europe.
The approach comes as private equity investors increasingly focus on energy infrastructure that can benefit from the rapid expansion of AI and data centres.
UGI’s stock has lagged the broader market, rising less than 2% over the past year compared with a gain of around 20% for the S&P 500.
The company’s shares have also been under pressure despite the broader enthusiasm around energy infrastructure. Natural gas prices have recently declined as strong US production and elevated storage levels have increased supply.
The proposed deal remains preliminary, and there is no certainty that UGI will agree to a sale to KKR or any other buyer.
