TULSA, Okla. (AP) -- Oneok will spin off of its natural gas distribution business into a separate, publicly traded company. The energy company also announced the retirement of CEO John Gibson.
Company shares hit an all-time high Thursday.
The new company being formed will be called One Gas Inc. and it will be comprised of Kansas Gas Service, Oklahoma Natural Gas Co. and Texas Gas Service. It will be headquartered in Tulsa, Okla., where it will serve more than 2 million customers in three states.
Stockholders will keep their current shares of Oneok and will receive one share of One Gas stock for every four shares of Oneok that they own. Fractional shares won't be issued but shareholders entitled to receive a fractional share of One Gas will receive the cash value of that fractional share instead.
The One Gas shares will be distributed on Jan. 31, signaling a close to the split. At that time, Terry Spencer, the company president, will take on the CEO title at Oneok and Oneok Partners LP. He will remain on the board at Oneok Partners board and will become a member of Oneok's board.
Spencer succeeds Gibson, who is retiring as CEO of Oneok and Oneok Partners. Gibson will become non-executive chairman of Oneok, Oneok Partners and One Gas.
Pierce H. Norton II will become president and CEO of One Gas and serve as one of its directors.
The transaction is not expected to have a material impact on Oneok Partners.
After the spinoff Oneok will lower its long-term debt with proceeds from an approximately $1.13 billion one-time cash payment from One Gas. Oneok anticipates having about 1.1 billion in total long-term debt once it finishes the debt reduction efforts.
One Gas will fund the payment to Oneok by issuing its own long-term debt in the middle of this month. It is expected to have about $1.2 billion in total long-term debt outstanding.
One Gas' board will have seven directors, including Gibson and Norton.
One Gas common shares are expected to start trading on the New York Stock Exchange on Feb. 3 under the "OGS" ticker symbol. Oneok will continue trading in the NYSE under the "OKE" ticker symbol.
Shares of Oneok Inc. gained 35 cents to $63.41 in afternoon trading. The stock hit an all-time high of $64.50 earlier in the session.