MGE Energy announces $250 million public stock offering

MGE Energy Inc. (NASDAQ: MGEE) announced an underwritten public offering of $250 million in common stock shares, according to a company statement.

The Wisconsin-based utility holding company plans to issue approximately $75 million of shares directly to underwriters, while forward sellers will sell approximately $175 million worth of borrowed shares in connection with forward sale agreements. The company has granted underwriters a 30-day option to purchase up to $37.5 million in additional shares.

Morgan Stanley, Guggenheim Securities, BofA Securities and J.P. Morgan serve as joint book-running managers for the offering. MGE Energy will enter into separate forward sale agreements with Morgan Stanley, BofA Securities and J.P. Morgan or their affiliates as forward purchasers.

Under the forward sale agreements, the forward purchasers will purchase shares from MGE Energy at an initial forward sale price equal to the underwriters' purchase price from forward sellers, subject to certain adjustments. Settlement is expected within approximately 20 months of the prospectus supplement date.

The company stated it intends to use net proceeds for general corporate purposes, including short-term debt repayment, securities repurchases and refinancing, capital expenditures funding, and subsidiary investments. MGE Energy will not initially receive proceeds from forward seller sales to underwriters.

MGE Energy's principal subsidiary, Madison Gas and Electric, generates and distributes electricity to 170,000 customers in Dane County, Wisconsin, and distributes natural gas to 180,000 customers across seven south-central and western Wisconsin counties.

A shelf registration statement on Form S-3 has been filed with the Securities and Exchange Commission and became effective upon filing. The offering will proceed through a preliminary prospectus supplement and accompanying prospectus filed with the SEC.

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