The stock of UIL Holdings Corp. - parent company of United Illuminating - has rebounded about half its losses after the prices dropped more than 10 percent following the announcement of the company's purchase agreement of three area natural gas companies.
On May 25, UIL announced a purchase agreement with Iberdola USA to purchase the Southern Connecticut Gas Company, the Connecticut Natural Gas Corporation and the Berkshire Gas Company in Massachusetts for $1.3 billion. When complete by April 2011, the move will more than double the customer base to 694,000.
UIL's price on the New York Stock Exchange dropped from $26.70 per share to $24 per share when the deal was announced. Part of the reason for the drop was doubt on the exchange that UIL could effectively finance the deal in a balanced manner. Market analyst Standard & Poor's revised the outlook of UIL Holdings from stable to negative.
In the week since the purchase agreement was announced, the UIL stock price has recovered more than 50 percent of those losses. This afternoon, the price was trading around $25.50.