UGI rises as Jefferies turns bullish on M&A potential
UGI•UGI rises on Jefferies upgrade and takeover interest
** U.S. natural gas and electricity distributor UGI Corp UGI.N inch up 1.1% to $38.7 premarket
** Jefferies upgrades UGI to "buy" from "hold", raises price target to $43 - the highest among three brokerages covering the stock
** Brokerage says KKR's buyout interest gives UGI upside that doesn't require fixing Pennsylvania regulatory issues or its AmeriGas business turnaround
** WSJ first reported KKR's $42.5/share bid for UGI on Tuesday
Regulatory hurdles remain but deal still seen as feasible
** Pennsylvania and France regulatory approvals for the buyout are difficult but doable, with customer protections and financial safeguards required for KKR rather than blocking the deal - Jefferies
** Still sees some risks to longer-term earnings as progress on some metrics has not materialized and upcoming winter weather risks linger
** As of last close, stock up 2.2% YTD
