Morgan Stanley Still Expects SRE Dividend Hike In 1Q11

Sempra Energy SRE announced that it will acquire AEI's stake in Luz del Sur and Chilquinta for $875 mn, increasing its ownership to 76% of Luz del Sur in Peru and 100% of Chilquinta in Chile from 38% and 50%, respectively, Morgan Stanley reports. “Sempra forecasts $0.15/0.22 accretion to 2011/12 EPS resulting from the transaction,” Morgan Stanley writes. “Their updated earnings guidance range is $4.00-4.30 for 2011. Sempra should be able to finance the transaction with offshore cash balances and proceeds from its commodities JV and Elk Hills plant sales, along with some debt at the acquisition level. “We are raising our 2011/12e to $4.25/4.30 from $4.15/4.15. We still expect a dividend hike in 1Q11.” Sempra Energy closed Wednesday at $51.94.