uly 2 (Bloomberg) -- Babcock & Brown Infrastructure Fund North America, owner of ports and lines to deliver gas and power, agreed to buy Dominion Resources Inc.'s natural-gas utilities in Pennsylvania and West Virginia for $910 million.
The deal, subject to regulatory approvals, includes Peoples Natural Gas Co. and Hope Gas Inc., the San Francisco-based fund, an affiliate of Babcock & Brown Ltd., Australia's second-largest investment firm, and Richmond, Virginia-based Dominion said today in statements.
Babcock is adding natural-gas delivery to 359,000 homes and businesses in the Pittsburgh area and to 115,000 in West Virginia to U.S. holdings that include a power cable under San Francisco Bay, port operations in Florida, Louisiana and Alabama, and a stake in the 9,800-mile (15,768-kilometer) Natural Gas Pipeline of America.
It's paying $60 million less for the gas utilities than Dominion was to have gotten from Equitable Resources Inc. under a March 2007 agreement. Dominion and Equitable scuttled the deal in January after the U.S. Federal Trade Commission moved to block it, saying it would create a natural-gas monopoly in the in the Pittsburgh area.
``The deal made more sense for Equitable than somebody else,'' said Jim Halloran, who helps manage about $35 billion at National City Private Client Group in Cleveland, including 2.2 million Dominion shares. ``Once you take out the best bidder, you get lower value.''
Dominion Forecast Unchanged
The Standard & Poor's 17-member Supercomposite Gas Utilities Index has risen 38 percent since the planned sale to Equitable was announced, and 9.7 percent since it broke up.
Dominion left its profit forecasts for 2008 and 2009 unchanged because they excluded results from the two utilities.
Dominion fell 19 cents to $47.49 in New York Stock Exchange composite trading. Babcock & Brown fell 19 cents to A$7.03 on the Australian Stock Exchange. Babcock & Brown Infrastructure Group rose 4.5 cents to 75 cents.
Macquarie Group Ltd. is Australia's biggest investment bank.
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