Sale of Alaskan Gas Utilities More Positive Than Expected

Bottom Line:

ALA's sale of its Alaskan utility business for a robust 2.3x rate base and 29x P/E (US $800M) was well above our US$500M expectation and represents another deleveraging catalyst for the shares and highlights the underappreciated asset value (currently trading at 15x P/E vs. utilities at 20x and pipelines at 17.5x). We maintain our $36 target, Outperform rating, and top pick designation.