Enbridge Income Fund Holdings Inc. EBGUF

I'm warming up to this deal. Here's why.

[hawk35]

I wouldn't be surprised to see the ENB share price rise and drag us along for the ride.  There are a few reasons the share price could rise:

Asset Sales:
ENB has already achieved their 2018 target of seling $3 billion in non core assets.  In addition media sources believe they have also received initial bids for their Canadian midstream assets with a value up to $4.5 billion.  Market reaction would be very positive to this news.

If these additional noncore assets are sold ENB could potentially stop the DRIP earlier than they planned and some analysts have suggested they may then institute a monthly dividend.  Market reaction would be positive.

Line 3:
Any clarity on the L3R project could be positive for the SP.  Decision is vey soon, expected by June.

New ENB projects:
The announcement of new secured projects with returns in the 12–14% range would again be positive for the SP.  And they have en extra $500 million  every year to finance potential projects.

Price of Oil:
Some analysts think oil has room to run with problems in Mexico, Venezuala and Iran plus OPEC holding to their reduced target.  Price of oil influences all the pipes so again this could be a positive.

Market's View of ENB:
They have been in the dog house because of debt and their complicated structure that adds cost and makes it hard for analysts to evaluate the company.  Lower debt, cost reduction synergies and higher cash flow once the deal closes would again be positive for the SP.


All of the above are possible catalysts for ENB SP.  I'm warming up to this deal.  The ENB pre-deal 12 month return was 34% (TDW estimate)  I'm thinking the new / improved ENB might rerate even higher once the deal closes.  It all comes down to managements ability to execute the strategy.  So far ENB execution is off to a great start.